SDG&E Faces No Competition for San Diego Franchise

5 May 2021

San Diego Gas & Electric remains the sole bidder in the City of San Diego’s solicitation for exclusive electric and gas services.

“We do not feel it is appropriate to characterize where we are in the negotiation process,” Jeffery Martin, CEO of parent company Sempra Energy, told financial analysts May 5. The city, the eighth largest in the U.S. with a population of 1.4 million, is the utility’s biggest customers by far.

Like its earlier bid, SDG&E is offering to continue electricity services to the city for 10 years for $70 million. It also proposes continuing its gas services for a decade for $10 million. Another 10-year agreement is optional.

San Diego set minimum bids at $70 million for electric services and $10 million for gas.

If successful, SDG&E is supposed to help the city meets its 100% renewable target set for 2035 and include environmental equity. It also is to make way for additional supply options and a possible municipal utility.

The utility said it backs the city’s clean energy targets. The company believes it and San Diego have “strongly aligned interests,” Martin said.

The utility has faced backlash for its high rates and inadequate accountability.

SDG&E has provided the city power under two 50-year back-to-back franchise agreements. The latest one expired in January but was extended to June 1.

The utility also bid into an earlier city solicitation. It also was the sole bidder. That solicitation was cancelled by Mayor Todd Gloria for being “unresponsive” to the material terms of the deal.

Berkshire Energy and Indian Energy initially expressed interest in the deal but did not submit bids that were due by Sept. 23.

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