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Mayor Gloria Comments on Opening of Gas and Electric Franchise Bids

MAYOR: BIDS MUST ADVANCE CLIMATE ACTION, ENVIRONMENTAL EQUITY, ACCOUNTABILITY

SAN DIEGO – Mayor Todd Gloria issued the following statement today after the City opened the bids submitted expressing interest in the exclusive right to provide gas and electricity services to residents and businesses in the city of San Diego:

“With today’s opening of the bids for our energy franchises, we are one step closer to achieving our goals: securing agreements that meet the needs of residents, make financial sense for the City, advance our climate goals and provide equitable access to environmental benefits for all our communities.

“Over the next few days, I intend to analyze the bids to see if they meet the City’s needs and standards for climate action, equity, and accountability. If necessary, I stand ready to enter into negotiations with the bidders with the ultimate goal of presenting final bids to the City Council in the coming weeks.”

The City received one bid for the gas franchise ($10 million) and one for the electric franchise ($70 million), each from San Diego Gas & Electric. The Mayor will have no further comment until he has thoroughly reviewed the bids.

BACKGROUND

San Diego Gas & Electric (SDG&E) has held exclusive franchises with the City to provide gas and electric service since 1920. The agreements allow the franchisee to use the public right-of-way to install and maintain the infrastructure, such as pipes, poles and wires, necessary to provide energy to San Diego’s residents and businesses.

The current franchise agreements, signed in 1970, were set to expire on Jan. 17, 2021. Under a process created by the previous administration, SDG&E was the lone bidder for new franchises.

However, Mayor Gloria, in consultation with City Attorney Mara Elliott, determined that the bid was unresponsive to the minimum requirements set forth in the Invitations to Bid (ITB). Mayor Gloria cancelled the ITB process and reached an agreement with SDG&E to extend the current agreements through June 1, 2021.

In January, Mayor Gloria initiated a robust public-outreach effort to educate city residents about the franchise agreements and solicit opinions about San Diego’s energy future. The process included partnering with all nine members of the City Council to hold 13 virtual community forums, which we attended by hundreds of people, and an online survey that drew nearly 1,400 responses. The Council’s Environment Committee held several hearings on the franchises, providing additional opportunities for San Diegans to make their voices heard. The results of this effort showed that City of San Diego residents value environmental protection, including reducing pollution and combatting climate change.

In March, Mayor Gloria released new ITBs that included significantly improved terms and conditions to benefit the San Diego community.

Tentatively, the new franchises will be awarded in May.

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