San Diego Mayor Kevin L. Faulconer Thursday announced his office has sent the terms of a proposed gas and energy franchise agreement to the city council’s environment committee.
Council input will be added to the public, stakeholder and bidder commentary to define the terms of the once-in-a-generation agreement. The existing franchise agreement for gas and energy from 1970 between the city and San Diego Gas & Electric is set to expire in January 2021.
“San Diego is making it clear — this is not your grandfather’s franchise agreement. A lot has changed over the last 50 years and this process ensures residents get a franchise agreement that aligns with their needs for today and shapes a vision for tomorrow,” Faulconer said. “The input from this committee, and ultimately the full council, will undoubtedly make this a more open, fair process so all San Diegans can have their voices heard.”
The environment committee is set to review and offer input on a host of proposed franchise terms developed by consultants, including term length, franchise fee rates, transparency and ratepayer relief at a special meeting on Thursday, July 16.
Two of the proposals from the consultant report — if included in the final franchise agreement together — would decrease the cost of utility service in San Diego. The consultant report estimated this could save San Diego ratepayers as much as $85 million over the recommended 20-year term.
“The city of San Diego is the largest California city to franchise its gas and electric services, which make them extremely valuable,” said Erik Caldwell, the city’s deputy chief operating officer. “Our consultant has crafted a series of proposed recommendations that, together, offer a holistic package that addresses current city needs, aligns with our policy goals, reduces the burden on our ratepayers, and still offers a compelling opportunity for any prospective bidders.”
In January, the city issued a request for expressions of interest, seeking public comment on priorities that should be included in the franchise as well as identify potential bidders. According to a city release, the city received numerous responses from the public that helped shape the recommendations put forward by the consultants. Additional input was gathered through three public workshops, several presentations to local boards and an online survey.
After input from committee and council, the mayor will advertise the gas and electric franchises as an invitation to bid and the franchises will be awarded to the highest responsive and responsible bidder.
–City News Service
