San Diego Mayor Kevin Faulconer’s office has come up with four key recommendations for negotiating a new agreement that allows one utility the exclusive right to use the city’s public right-of-ways for transmission and distribution as well as installing wires, poles, power lines, and underground gas and electric lines.
San Diego Gas & Electric currently holds what is called the franchise agreement, which has been in place since 1970. But the deal expires in January and city officials are counting on fielding competitive bids from a number of different companies — not just SDG&E — before deciding who should win the new agreement.
With that in mind, Faulconer’s staff, working with an energy consulting firm, proposes:
- a new franchise agreement that lasts 20 years
- a provision calling for third-party reviews to make sure the company that wins the bid is keeping its promises and doing a good job
- making adjustments to the franchise fees that would lead to a projected net benefit to San Diego ratepayers of $85 million over the course of the recommended 20-year contract, and
- an upfront payment by the winning bidder of $62 million.
“San Diego is making it clear — this is not your grandfather’s franchise agreement,” Faulconer said in a statement. “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.”