All right.

Good morning.

I will now call the city council meeting of Monday, June twenty-second, twenty twenty-six to order.

Deputy Clerk, please call the roll.

Councilmember Campbell.

Here.

Councilmember Whitburn?

Here.

Council Member Foster.

Councilmember Von Wilbert.

Council Member uh Council President Pro Tem Lee.

Here.

Councilmember Campio?

Here.

Council Member Moreno?

Present.

Councilmember Ilo Rivera.

And Council President Lacava?

Present.

Also attending the meeting are City Attorney Heather Ferber, independent budget analyst Gillian Andalina.

Council Affairs Advisor in the Mayor's Office, Code Desizer, and myself, your Deputy City Clerk, Kevin Smith.

All right, thank you, Deputy Clerk.

A quorum is now present.

We will begin this morning with invocation by Deputy Clerk Smith, followed with a land acknowledgement and the Pledge of Allegiance led by Councilmember Campbell.

Grant those who hold office in the city the spirit of wisdom, charity, and justice that with steadfast purpose, they may faithfully serve in their offices to promote the well-being of all people.

Please face the flag.

Place your hand over your heart, and let's begin.

Of the United States of America.

And to the Republic or Sustainance.

Under God, individual with every human justice.

All right.

With that, Deputy Clerk, please go over how the public can offer their testimony.

Thank you, Council President.

I'll now now highlight the slide on the screen that reviews how the public can offer their public testimony during today's meeting.

If you are in person, please complete a speaker slip located at the entrance of chambers and bring it to the front of the room.

No further in-person testimony will be taken once the council begins virtual testimony.

For better meeting management purposes, each speaker will have one minute per item per person.

If you would like to speak on three or more items, you will have a maximum of three minutes.

All right.

Thank you, Deputy Clerk.

And as a reminder, non-agenda public comment, which will be taken at the end of the session is the opportunity to speak freely on items within the city's jurisdiction.

Items on the ducket, we encourage the public to offer their testimony to inform the council members of their consideration or deliberations on that docket item.

So with that, Deputy Clerk, please read the closed session items into the record.

Conference of legal counsel existing litigation pursuant to California Government Code Section 54956.9 D1.

CS1, Sandra Silva versus City of San Diego et al.

CS2, Ryan Pete versus City of San Diego.

CS3, Maria Delrocio Nunez Munoz versus City of San Diego.

CS4, Jesse Torres versus Civil Service Commission of the City of San Diego.

CS5, Denise Wadsworth et al.

versus City of San Diego et al.

All right.

With that, please proceed with public comment.

Thank you.

We will begin with in-person public comment.

Jacob Lewis Edwards, please come forward.

You have requested to speak on CS1, CS2, and CS3.

You'll have three minutes to speak.

Thank you, members of uh city council, and allow me to speak in front of you.

Um I've spoken in front of you about many things, and uh these items include lawsuits to the city of um reading slips and falls and such.

I'm gonna speak upon myself now.

I usually speak upon for what is going on in a general sense.

I've spoke to you about how our cyber networks were hijacked going around eight years ago.

My Uncle Danny's position of the DHS over our country's cybersecurity networks.

I'm sorry to interrupt.

Can you speak to the closed session items that you identified?

As opposed to a general meeting.

Yes, I am getting to that, sir.

I'm getting to that.

And a handful of federal field agents assisted the mob and hijacking our federal government agencies.

Well, I've been terrorized all along the way by them.

Pester, tormented, harassed, terrorized.

Any trace of anything I've gone through, wiped out, and uh it continues to this day.

Now it's prevented that I'm getting I get into a shelter.

If I am able to get into a shelter, and that is here in the city, it's set up that I'm pestered tormented, harassed, terrorized, people given assignments within the shelter to hurt me, and it all goes from federal activity.

Currently, I'm prevented from getting into a shelter.

I sleep at the front door here at the Civic Center to stay safe under camera.

Would I go through even here?

No, I wouldn't sue the city of San Diego.

I love the city, but I would like to bring it to your attention.

Uh I mean I could file a lawsuit, but I'm not, but I'm going to bring it to your attention.

Just two nights ago, sleeping right here at the front door, three guys, nice designer jeans, nice shoes, and it was overnight standing right over me, wildly conversating, being rude.

It was very unruly over somebody trying to sleep.

I mentioned that to them.

I said please have some consideration, and I mentioned how federal field agents who terrorize me will set people up to do this.

I'm not saying that's the case, but it sure seems so.

They got very angry at me.

One of them pulls his belt off.

Stands over me and says threatened to beat me in a very abrasive threatening manner.

I said, Now you're gonna threaten to beat a homeless guy that you were standing over.

I said, really?

He got more abrasive, cop back that he so I walked off and called 911.

911 dispatchers will not take a report from any of the activity that I've gone through in the past.

They obstruct me from reporting anything.

The dispatcher wanted me to confirm my telephone number before he would dispatch anybody in an emergency call.

That's not normal protocol in any city.

Usually it's they dispatch immediately.

Thank you for your comment.

That does conclude, but for the record, you did not speak to any of the closed session items.

So thank you.

I'm a human being.

That does conclude in-person public comment.

I've started the five-minute timer in council chambers.

We will now turn to the virtual queue in which there are currently three participants wishing to speak.

Could you please uh indicate which closed session item or items you wish to speak to?

Yeah, I'm gonna um touch on all of them.

Okay, you will have three minutes, please proceed.

Okay.

So with these continued trip and fall incidents, I mean, it's quite ridiculous how much money we wind up spending to um in settlements uh when you know, just these uh problems could be fixed, and you know, knowing that someone has tripped and fall fell in these areas or um had an incident there, um, you know, have you gone and mitigated that?

Is that something that you know was instantly put on the list of things to do to make sure that there won't be other incidents that arise, and I find it interesting as well that some of them you say this case arises from a slip and fall, this case arises from a slip and fall, and then it's like this matter arises from an alleged trip and fall on the sidewalk.

So I mean, what leads you to, you know, treat the case in that manner, and then for um, you know, the um CS5 in the Wadsworth case, you know, this one also it says this case arises out of an alleged scooter incident, but this is an actual death.

Somebody died, um, and due to dangerous conditions.

So I feel like when you guys want to, you know, go under the Brown Act and say that you're like providing just enough information for a summary, I mean you're leaving out some pretty significant information, um, you know, for the people to know.

And, you know, to for someone to have died um due to this incident, you know, and you to to consider it alleged, and the other ones, you know, are obviously true, or whatever.

Um, you know, it just kind of discredits the person dying, um, it feels like, and then with this Jesse Torres um case and the civil service commission, you know, this officer was uh engaged in misconduct off duty, and so you know, officers should be held to a you know standard, uh, much like the people, and I find that the people are held to a higher standard than law enforcement and/or any kind of public official, and you know, when the people engage in crimes, you know, you want to hold them accountable, but then we have, you know, officers, whether it's on duty or off-duty, um, and they're engaged in uh misconduct, abuse, um, you know, abuse of power, different things like that.

I mean, Andrea Ebbing, you know, with um Anthony Warner, I mean, he brutally assaulted her, and she's sitting in jail right now, and they made her do a competency evaluation, and they have deemed her incompetent, which is absolutely ridiculous, which means this stalls the proceedings and all of this, and so it's like you guys uh wind up criminalizing the people when they've been abused by law enforcement.

So I mean, this man needs to be, you know, held to a standard, much like the people and even higher, I would say.

Thank you for your comment.

Uh the caller did speak to all the closed session items, so thank you very much.

Our next virtual commenter is with the caller with the last four digits eight seven zero zero.

Uh, please tell us which items you wish to speak to and begin your comments.

Uh excuse me.

Uh thank you, uh Deputy Clerk, um Joy Sanyata, and I will speak on all of them.

Okay, please proceed.

On number one, which is a trip and fall accident.

Again, I want to speak to the public.

Uh, dear public.

I really encourage you to uh claim your own self-safety and be your own advocate when you're out walking, as I try to do, uh, because it's dangerous out there on the sidewalks and and we need to watch out for ourselves.

So uh please consider that.

Uh on number two, which is uh a uh slip and fall incident, um, what I'll say on that is incident versus accident, doesn't seem as solid a case for the plaintiff yet.

I am not sure on that.

So on number three, alleged trip and fall on sidewalk.

So with alleged, uh, I'm not clear again yet uh what I'm not clear as what happened, and it doesn't seem like uh you are either in what's being presented, and that the evidence will need to be presented so that you really can move forward on it.

But best of luck on that.

So on number four, which is the uh civil service commission item, uh a writ of uh mandamus, which in Latin it means we command, and also this really struck me when I looked it up.

It is an extraordinary remedy.

So I'm not clear what that means, but uh I did uh Google a civil service commission, and they have a very positive reputation, so that was really wonderful to read now on the settlements and judgments, which we looked at recently, mostly regarding SDPD.

Of the number of cases that occur.

So um I and they talked about speeding up the process because the costs are escalating.

So uh please, uh I d I don't know in this termination, and uh the original added some information which I didn't know about, so it sounds like a pretty serious thing.

Uh and then the termination is involved, so uh I'll just send you blessings on that and and best of luck for all parties and the scooter uh incident, which was alleged, excuse me, saying incident, alleged, oh yes, there is an incident, alleged e-scooter incident.

Uh I learned a lot during our e-scooter uh time and when they were present in San Diego.

Mostly I learned that we have many levels, many layers of codes and regulations that can tie our hands in litigation.

Uh I think we learned a lot from our e-scooter period.

And uh it's i it's just a learning lesson for us, and I certainly learned a lot.

So we move forward and uh I thank you very much for listening and love to all have a beautiful day and a beautiful week.

Thank you to the caller for staying on topic.

Thank you for those comments.

Uh please note that the five-minute timer did conclude with no additional speakers left in the queue.

That does conclude closed session public comment.

All right, thank you, Deputy Clerk.

With that, we will now recess into closed session and reconvene council today at 2 p.m.

or shortly thereafter.

Good afternoon.

I will now reconvene the city council meeting of Monday, June 22nd, 2026.

Deputy Clerk, please call the roll.

Councilmember Campbell.

Councilmember Whitburn.

Councilmember Foster.

Councilmember Von Wilberg.

Council President Pro Tem Lee.

Councilmember Campillo.

Councilmember Moreno.

Councilmember Elo Rivera.

And Council President Lacava.

Present.

Also attending the meeting are assistant city attorney Michelle Garland.

Jordan Moore, fiscal and policy analyst with the Office of the Independent Budget Analyst.

And myself, your Deputy City Clerk, Kevin Smith.

All right, a quorum is now present.

So first we'll start off whether there's any comments from the mayor's office, council members, city attorney, independent budget analyst, or city clerk, and not seeing any.

We'll go on.

Deputy Clerk, please go over how the public can offer their testimony.

No further in-person testimony will be taken once the council begins virtual testimony.

All right, and as a friendly reminder, um, non-agenda public comment, which will be taken at the end of the day as an opportunity to speak on anything that's within the broader city of San Diego purview.

Uh docketed items, we request that you speak to the item itself, inform the council how about whether you support an item or uh reject an item and your reasons why.

So focusing on the docket item will be appreciated.

So with that, uh Deputy Clerk, please introduce item 200.

All right, thank you, sir.

And a reminder to everyone, this is an information item.

No motion will be taken.

Please introduce yourselves for the record and let us know how much time you'll need.

Try again.

There we go.

I'm like, it's on.

Heather Warner, Deputy Director for Energy and the Department of General Services.

We need about 15 minutes.

All right.

Begin when you're ready.

All right, thank you very much.

Thank you, Council President, members of council.

Um, as many of you are aware in uh as a corollary to the award of the SDG and E franchise, the city started studying alternatives to a franchise agreement for the delivery of electricity within the city boundary, known as public power feasibility.

That study was split into two parts.

The phase one report was brought to council in the summer of 2023.

It did find basic economic and technical feasibility.

So we moved into phase two, which was a much deeper dive into the economic and technical feasibility as well as incorporating changes in the regulatory space that have happened between those periods.

We brought on new gen strategies to act as our subject matter expert and technical consultant in executing that study, and so I'm going to pass it over to Scott to go over the findings.

Great.

Thank you, Heather.

Good afternoon, Council President, Council members, staff.

As Heather mentioned, my name is Scott Burnham.

I'm a partner and project manager with New Gen Strategies Solutions.

I'm joined here today with Dr.

Nelson Bacalau with Siemens Engineering and Drew Atwater with BBA.

Next slide.

The bottom line, in terms of the phase two study, is that we found that the analysis for developing and creating an MEU, a municipal electric utility, from the San Diego Gas and Electric SDGE assets was both economically and technically feasible.

The results depend on the value of the assets that the city pays to acquire them.

We conducted an analysis using two approaches, two cost approaches to value.

We'll talk more about that.

The OCLD, original cost less depreciation at the low end, and replacement cost new less depreciation on the high end.

This analysis focuses on the delivery assets only.

There is no generation assets to be acquired from SDGE.

The generation power supply portion of the MEU was assumed to be supplied by SDCP, the CCA that currently serves the majority of the city load.

Results suggest a range of savings between six and six percent to 16%, depending on the assets paid to be acquired, between $7 billion and $19 billion at the 30-year conclusion of the 30-year study.

More importantly, the analysis that we conducted was what we call an overnight analysis.

That's not feasible.

We know that we realize it would take at least 10 to 15 years to establish a municipal utility.

But the approach uses an overnight analysis as a prudent uh approach to understand the cost and to determine the feasibility.

We came before you approximately three years ago with the results of the phase one study.

There's been significant changes since then.

Relative to the study, we had additional information and detailed data provided by SDGE, and that informed a lot of the results of the study.

We also recognize there's been significant changes in policy in the regulatory environment that also impact the study and the phase two report.

Phase two report in terms of the changes in the utility environment, certainly a change in the landscape relative to the assets themselves.

Again, the information we got from SDG and E.

That information helped improve the uh cost analysis relative to the physical separation of the two systems.

If the MEU is to be formed, it would be electrically isolated from SDGE or have the ability to do so, and that would require investment on behalf of the city.

In terms of the regulatory environment, the process continues to evolve relative to how the CPUC would develop or would determine the cost for the MEU to acquire these assets.

As you're aware, the city of San Francisco is going through a similar exercise.

They're a little further ahead.

They've been to the CBUC.

They have some preliminary results relative to how the CPUC would then look at the acquisition costs.

But there are other policy and risks to be considered in terms of climate change, commodity cost, wildfire mitigation, as you know, that's a big ticket item relative to costs and cost recovery.

The phase two approach focuses on a 30-year cash needs.

It develops what we call a revenue requirement for the MEU.

That's the total dollars to operate the MEU in comparison to the total dollars paid to SDGE based on existing rates and assumptions about future rates for SDGE.

As I mentioned, it's only acquiring assets within the city, primarily distribution assets, but some limited transmission assets.

Sorry, the CCA, who continue to provide power supply to everyone.

And it's this buildup of the revenue requirement that is the crux of the analysis.

So we were looking at the system as MEU compared those cost on an all-in basis compared to the system as SDGE continued and the status quo.

The analysis suggests that there is indeed savings.

It shows the benefit of public power.

Again, this is done on what we call an overnight analysis, recognizing that there would still be a significant time component to this.

Approximately 800 miles of secondary conductor, conductor line, wires, transformers, meters, and other equipment.

The city would be responsible for serving approximately 660,000 customers.

The city would also acquire 42 electrical substations within the municipal boundary and the subtransmission conductor between those substations.

The city would not acquire the high voltage system, the bulk transmission system, or any generation assets from SGE.

As I mentioned, we conducted what we call a cost-based purchase price analysis.

This cost-based analysis begins on a low end and with the OCLD, original costless depreciation, and the high-end replacement cost new less appreciation.

In reality, the cost would likely come in between those two values.

But we developed these bookend values at $2.4 billion for original costless depreciation and $7.6 billion for replacement cost new less depreciation.

In a transaction, a prudent seller would likely would likely not accept original costless depreciation, that's book value essentially, and a prudent buyer is unlikely to accept replacement costs new less appreciation, which is why would in all likelihood that cost would come in between those two values somewhere.

The difference of that 5.2 billion dollars is significant, and it does in the age of the assets, certainly has an impact on that valuation.

We also assumed that there would be additional costs up front, approximately 912 million dollars of upfront cost to fund that separation analysis again, creating two electrically ability to have two electrically isolated systems.

Startup costs as well as well as $470 million in working capital.

Startup costs include the development of the utility, the create and operating utility, financial reserves, liquidity measurements, and the like.

This next slide shows a summary of the key assumptions.

So mentioned the purchase price is probably the most dramatic key in terms of the analysis that range between $2.4 billion and $7.6 billion.

But also the assumptions around long-term rate growth for SDG and E.

We assumed 4% per year going forward.

That was based on information available at the time from the general rate case.

It's probably a little bit lower than historic, but we would we believed it was a conservative assumption.

Other elements include the payment in lieu of franchise fees, public benefits.

As I mentioned, the separation costs, startup costs, upfront working, and of course, staffing.

One of the critical elements relative to difference between the phase one and the phase two analysis was the detailed analysis around staffing.

The intent would be to address the concerns of IBEW and others and acquire the workforce from SDG and E.

In summary of the results, we've got two graphics here on the left.

You can see there's selected years between the OCLD again on the low end, the RC and LD on the high end.

So you can see we're showing year 10, year 20, and year 30.

For the OCLD, it's a significant savings of 19 billion dollars at the end of cumulative savings in year 30.

The replacement cost, new less appreciation is slightly lower at $7 billion.

There is a crossover in the OCLD case, it's year one in which the MEU would show cash positive for the replacement cost, new less depreciation, the RC and LD, the higher asset, that crossover occurs in estimated in year 12.

So the city would not recognize savings up front if indeed they purchase the price at RCNLD.

The next slide shows on an annual basis, looking out over the 30-year forecast, the period of the study on the left, we show the OC and LD numbers you can see showing cash positive there in year one and continuing to grow over time.

On the right, we show RCNLD.

You can see that the blue bars there are the City of San Diego costs, the MEU costs that would be higher than SDG and E cost for the first 12, 11, 12 years of the study.

We did conduct a sensitivity on the relative to the assumptions about the growth rate of the SDG and E retail rates.

As I mentioned, we used a 4% approach, annual approach for SDGE retail rates.

We believe that that was reasonable raised on recent rate case information.

Historically, that number is probably closer to about 6%.

As you can see in this analysis here, or what we're trying to show in this analysis, I should say, is that at 3% at the lower end of the range of growth of SDG rates, the savings is significantly less.

At 6%, that range goes up to uh significant significant savings, a difference of about $60 billion between those.

Now, this is based on the OCLD acquisition cost case, but you can see the sensitivity to the results relative to the assumption made for the SDG and E rates.

There's certainly several key assumptions moving forward that would impact future feasibility.

Certainly policy direction around climate change, consumer preference, electrification, and the like relative to projected load growth, will impact this analysis.

Certainly direction at the state level, looking at affordability, looking at reliability in terms of investment requirements for systems such as STGEs, and the sensitivity to retail rates is an important consideration as well.

Looking out over at what's happening at the state at the CPUC relative to San Francisco.

Felt that precedence there in terms of that court decision, the preliminary court decision.

Looking at legislation, Senate Bill 875, looking at municipalization efforts across the state, as well as at the CPUC regarding wildfire investments in the past and the future is a major unknown.

Conclusion, the phase two analysis conducted has significantly refined the financial projections.

We have a lot more detailed data relative to the assets are materially older than originally assumed creating a different a difference disparity between the OCLD and and replacement cost new less depreciation values the phase two does find financial and technical feasibility and the opportunity to save dollars for the rate over time for ratepayers.

But the biggest driver, as I mentioned, is the assumption around SDGE long term growth rates, and of course the potential savings and financial benefits are an estimate at this point there's no guarantees that these that these savings would would uh would come to fruition the legislative and regulatory environment is indeed evolving and fluid there are certainly costs or issues around cost of recovery cost reimbursement valuation approaches as well as the potential process all of which could impact the financial feasibility however overall the results are more refined and more different more defined than significant unknowns and variables remain that's the conclusion of our presentation be happy to answer any questions all right thank you for the presentation uh the fire marshal has asked for those that are standing the back they're actually empty seats out there so if you could take a seat it would make the fire marshal happy which makes me feel more comfortable so thank you so uh thank again for uh the presentation uh with that uh let's go to public comment thank you count thank you council president this item received 15 comments in favor and two comments in opposition via our e-comment form which has been distributed to the council we will begin with in-person uh public comment anthony stackhouse please come forward and each speaker will receive one minute after Anthony Kevin Carroll Matthew Fish and Christina Marquez please come sit in the front row please begin my name is Anthony Stackhouse I serve on the executive board for IBW 465 I spent 14 years in the army with combat deployments overseas and if you knew the hell I went through to get to where I'm at today you would not be so steadfast to put my job and my family's quality of life at risk the people in this city don't trust you don't give them more reasons be honest with yourselves you do not have the resources or knowledge to do this don't gamble with my job or the job of my union brothers and sisters because I promise you one thing will not go down without a fight I urge this cancel this council to end this now municipalization is union busting.

Thank you for those comments Kevin Carroll good afternoon council members my name is Kevin Carroll I'm executive director of tech San Diego representing technology companies across our region.

Our members care about reliable service competitive rates and the infrastructure needed to support innovation manufacturing and economic growth based on this presentation we have some concerns the question is not whether municipalization is possible the question is whether the risk cost are sufficiently understood before making a multi billion dollar decision that could impact businesses and residents for decades before moving forward the city should have a high degree of confidence that all major costs liabilities regulatory requirements and operational challenges are fully understood and reflected in in the analysis if municipalization ultimately proves to be the best path the business case should withstand rigorous scrutiny if significant uncertainties remain as I think we saw in the presentation those questions should be resolved before ratepayers and businesses assume the risk for San Diego's innovation economy the goal is a reliable resilient and affordable energy energy system that supports jobs and thank you for your comments that does conclude your time.

Matthew Fish good afternoon council members my name is Matthew Fish and I'm the system business manager at IBW Local 465.

I represent the workers at STGE I'm speaking against the phase two study because it offers no job protections for my 700 gas construction work members.

Workers will lose their jobs, and the retiree medical and pensions will be affected.

So please end this once and for all.

Please invest in $9 million billion dollars elsewhere, such as infrastructure, backlog, or housing for the homeless.

Please do not gamble with our union jobs and this the city has bigger priorities.

Thank you.

Thank you.

And Christina Marquez, and uh while Christina's speaking, could Mark Fuentes, Christy Gomez, Monica Valdez, and Cecilia Marquez, please approach the front row.

Hi, good afternoon.

Christina Marquez speaking on behalf of IBEW, Local 569, San Diego and Imperial County.

We're the inside wiremen.

Um we're here in solidarity with our union sisters and brothers of 465.

The IBW stands against any effort to municipalize the power company.

The new gen study says nothing about worker protections or job guarantee, leaving our IBEW 56569 members in limbo.

IBEW members could lose jobs and benefits, and the city is already billions behind in infrastructure spending.

Infrastructure spending that puts our building trades members to work.

Please do not wage or gamble with our jobs and our livelihood.

Please end these efforts once for all.

Thank you.

Thank you, Mark Fuentes.

Good afternoon, Council members.

My name is Mark Fuentes.

I'm a gas working foreman for SDGE, a shop steward with IBW Local 465, a proud U.S.

Army veteran, and a San Diego native.

I serve this country because I believe in protecting American families, American workers, and communities.

But when I look at this proposal, I don't see any protection for me, my co-workers, or our families.

I don't see a future for my skilled gas workers who have dedicated their entire careers to serving this community.

I also don't see protection for our communities, especially when the cost of living is at an all-time high.

This proposal will create additional expenses for citizens and taxpayers who are already struggling to make ends meet.

Please don't gamble with good union jobs without clear worker protections.

I urge you not to move forward with this effort.

Thank you.

Good afternoon, Council members.

My name is Christo Gomez.

I am a shop steward of IBW 465 and equipment operator, SCG and E.

I'm also a veteran of the United States Marine Corps.

I operate equipment for gas and electric emergencies.

And this feasibility study, you only want to take over electric.

What about the uh the gas jobs?

What about equipment operators uh like myself and their families?

Uh will we lose our jobs?

Um what about our retirements?

There are over 700 gas workers in our union.

What about them?

Where's our just transition?

And what about job mobility?

Uh because in this proposal, I don't see a future for uh us and our jobs.

Don't gamble with good union jobs at SCGE with a city takeover.

I urge the city council not to proceed any further with this effort.

Forcing the city to take on billions in debt is wrong.

We have bigger priorities.

Thank you.

Thank you.

Monica Valdez.

Hello, my name is Monica Validez.

I'm a third generation IBEW member and emergency dispatcher for SDG.

I'm a proud resident of District 4.

I am a very active, I'm very active in my union and my community as part of La Causa Service Clubs.

I'm here to express my absolute opposition to the phase two study.

The proposal is costly.

We'll gamble what puts our union contracts in the crosshairs.

There are zero protections and zero guarantees for my gas members.

Our gas people.

They are left behind in this proposal.

Where is the just the just transition?

Please vote against this risky measure.

Please don't gamble with our livelihoods.

Please stop this once and for all.

Thank you.

Uh Cecilia Marquez.

Well, Cecilia comes to the microphone.

Could Laurie Lipsman?

Noelia Callan, Jason Paguio, and Chris Kate and Amy Fawcett.

Please come to the front row.

Please begin.

Thank you.

My name is Cecilia Marquez.

I'm born and raised in San Diego.

I'm a single mother, a homeowner, and a 24-year employee at San Diego Gas and Electric.

I'm also a proud union officer and organizer at IBW Local 465.

The city has been studying this for decades, and it's time to stop.

San Diego is a beautiful city, but when I look around, I see bigger priorities that we should be focusing on.

The homelessness, affordable housing, fixing our storm drains, infrastructure, public transit.

And in the study, there's no guarantee that our jobs will carry over to a city ran utility.

And even if they do, wages, salaries, benefits could change considerably.

So I urge the city council to not proceed any further with this effort.

Let's stop wasting our tax dollars.

This is wrong, and the city has much bigger priorities.

Municipalization, it is union busting.

Thank you.

Thank you.

Lori Lipsman.

Hello, Council Members.

I'm Lori Lipsman, a constituent of District 3.

SDGE continues to put profits before people.

For decades, we've been we've built an energy system that transports power long distances, losing power along the way while increasing costs and vulnerability.

The sunrise power link destroyed habitats, impacted cultural, significant significant lands, and disrupt its disrupted communities.

Today, those transmission corridors are part of a system that routinely shuts down power to reduce wildfire risk.

This is not smart energy.

SDG and E customers pay among the highest rates in California while utility executives and shareholders continue to profit.

Many residents are being forced to choose between necessities and keeping the lights on.

Energy is an essential public service.

It should be accountable to the people, not corporate profits.

I urge you to move forward.

Thank you.

Next speaker, Noelia Collin.

Good afternoon.

My name is Noelia Collin and I'm a welder SDG-E.

I'm a proud member of IBW 465.

I'm proud to be the first woman welder in our union's history of over a hundred years.

This career has changed my life, gave me opportunities, financial independence, and a future I never imagined for myself.

I understand that people are frustrated with utility cost.

Those concerns are valid and do deserve to be heard and discussed.

We pay those too, and we live here as well.

But when I read the study, I didn't see enough discussion about the workers who operate, maintain, and respond to emergencies on the system every day.

I didn't see myself, I didn't see my union brothers and sisters.

I didn't see the young women who may one day follow the path that I did, path that I did.

I ask that you consider not only the infrastructure, but the people behind it, the workforce, the training, the experience, the careers, the culture, all the house serves community for generations.

I was born and raised here in San Diego.

I love the city, and that's exactly why I'm asking you to think carefully about the people who serve and sacrifice for it every day.

Thank you.

Jason Pagua.

Jason Paguillo.

Okay, moving on.

Chris Kate.

Good afternoon, Council President, members of the council.

Chris Kate, on behalf of the San Diego Regional Chamber of Commerce.

The phase two study claims municipal utility would save San Diego's 130 billion dollars.

Let's be direct.

When something sounds too good to be true, it usually is.

Giving false hope to San Diego's at a time when affordability is top of mind.

The reality is that municipalization is a dangerous, costly gamble.

Startup costs alone could reach $9 billion or more.

Money the city simply does not have, nor residents can afford to take on as debt.

This doesn't even account for massive annulating operating costs, wildfire insurance, cost overruns, or litigation that residents and businesses will be forced to bankroll.

Pursuing a takeover of our energy infrastructure is a costly distraction that undermines our economic stability and risk our electric reliability.

Past city councils have rightly rejected this path time and again because the risk continue to far outweigh any speculative benefits.

We urge you to reject this proposal once and for all.

Thank you.

Amy Fawcett.

Good afternoon, Amy Fawcett with the Building Industry Association of San Diego.

I'm here today to talk more about from my personal and professional experience working here at the city.

I was had the honor of working here over for over 20 years in almost every branch of government.

The city is not structured organizationally, nor does it have the expertise or the financial resources to take on such an endeavor.

I too am concerned about energy rates, but the city of San Diego is not the solution to that problem.

So I ask you to please move on from this endeavor and focus on the priorities and issues that you already have on your plate.

Thank you.

Thank you.

Our next speaker is Marcy Weaver.

While Marcy approaches the microphone, could Mark Kirsey, Jay Wilder, Al Sanchez, and Matt Kastrinski, please come sit in the front row.

Good afternoon, Council members and city staff.

My name is Marcy Weaver, CEO of the Chula Vista Chamber of Commerce.

I'm here today on behalf of the businesses we represent through the throughout South County.

Our business community depends on reliable, affordable, and predictable energy to operate, grow, and create jobs in our region.

While we appreciate the effort that has gone into this visibility study, we are concerned that there is still not enough information available to fully understand financial operational and long-term impacts of the municipal police.

I can't see we also want to acknowledge the significant wildfire mitigation work, an ongoing investment that SDGD has made across the region.

Chula Vista has had close calls with file fires, and this is critically important issue for our community.

We have seen firsthand the work that SDGNG has done to straighten grid wheel grid reliability and great reduce fire risk.

Thank you for your comments.

That does conclude your time.

Next speaker is Mark Kercy.

Good afternoon, Council President, members of the council.

Mark Kirsty, representing San Diego taxpayers.

Having sat on your side of the dais for eight years, I'm gonna ask you a question.

Is this really a headache that you guys want to take on?

You guys already have a lot of headaches, and several of them concern utilities.

You get thousands of complaints about water rate increases.

You get browbeat over the cost of pure water.

You get criticized for failed stormwater channels, and you take errors over trash fees, particularly when third-party estimates don't match reality.

Exactly like what could happen with this issue.

Make no mistake, running the power grid will only make these other headaches seem minor by comparison.

The minute this ill-fated eminent domain takeover closes, people will expect you to immediately lower their electric rates.

But you won't be able to because you'll have spent billions to buy the system and might actually need those rates to increase to pay off the massive bond debt and associated integration costs.

You all have a tough job.

You have enough headaches, save yourself this one.

Thank you.

Thank you for your comments.

Next speaker is Jay Wilder.

If you're holding a sign, remember there are people behind you that might want to see our smiling faces up here.

So use the back row if you want to hold the signs up so we can read them because you'd use big fonts.

But have a courtesy to the people behind you.

Thank you.

Hello, thank you for your time.

My name is Jay Wilder.

I'm president of IBW Local 465 and alignment at German lineman at SDGE.

I'm also a Marine Corps veteran, husband, father, two two kids, and I'm and I've defended the nation and our freedom.

Today I'm speaking to defend my union members and protect their jobs.

Don't do this.

The government for 20 plus years under IBEW's best to learn this complex and ever-changing system, and I'm learning more every day.

This is not something you can just learn overnight.

It will take you decades.

And all the while, my BEW brothers and sisters and I will fight you every step of the way to protect union jobs.

Let's not go to war.

Let's find a way to work together to address real priorities in San Diego, like homelessness, especially veteran homelessness, mental health, and addiction.

This is where we should be spending valuable city resources.

Thank you for your time.

Thank you.

Our next speaker is Al Sanchez.

Thank you, Council members.

My name's Al Sanchez, and I'm here on behalf of local Nine and my business manager Bell Armacello.

We're here today to communicate our opposition to the efforts of bringing the work union contractors currently do in-house.

We do not benefit, we do not benefit the city's taxpayers or our employees.

The studies have shown, the studies have not proven you with real opportunities costs for what is needed to sexually manage this reliable utility and keep it keep the lights on 24 hours.

Nor does it address the costs needed for workers' safety, working highly highly skilled working work skilled workforce and competitive wages and benefits and construction expertise in building and maintaining the grid and pipelines in San Diego.

We don't believe this business is served in the city's good interest of doing this.

We ask the city council to redirect their time or resources in delivering the city services.

Thank you.

Matt Kostrinsky, while Matt approaches the microphone.

Could Marco Veronis, Brittany Cis, Rihanna Berawell, Bill Powers, and allegedly Audra, please come to the front row.

Please begin.

Good afternoon, Council members.

My name is Mac Strinski.

I'm speaking behalf today of Aspie Local 127, the dedicated city workers who keep San Diego running.

As you know, local 127 represents the hardworking employees of our maintenance, labor, skilled trades, and equipment operators, and so forth.

Our members are on the front lines serving the city every single day, and their stability is our top priority.

It is our concern that that's the stability and the fiscal health of our city that local 127 must express its continued objection regarding public power.

We have met with the proponents and expressed the same concerns to them.

While we understand the desire to explore alternative models, we believe this current proposal presents too many unresolved risks.

One, lack of consensus.

This initiative has come before the council multiple times in a struggle to find viable path forward, demonstrating the community and leadership remained deeply divided on this issue.

Two, workforce uncertainty.

The phase two report does not provide the concrete assurances.

Thank you.

That does conclude your time.

Marco Baronis.

Good afternoon, Council.

My name is Marco Briones, political director of the San Diego and Imperial Counties Labor Council.

We're proud to represent over 100 unions and 200,000 working families, including our brothers and sisters in IBW 465.

Uh, and we're here standing with them in efforts to oppose the municipalization of this power company.

We know the struggles of our members to make it in San Diego right now, and we know that consumers are paying the same thing, but we also know that right now our city resources are stretched very, very thin.

And now's not the time to risk those limited resources on a utility takeover.

Workers could lose their pensions and retirements and hard-fought benefits.

We stand with the hundreds of workers that could lose these benefits.

Please don't gamble with their jobs.

We have bigger priorities, and we thank you for your support.

Thank you.

Thank you, Brittany says.

Hi, good afternoon, council members.

Thank you so much for uh the time to comment on this today.

Um, like many others here, we have serious concerns with the study.

Um, in particular, it doesn't answer the critical question of how much will it actually cost to purchase the assets of the utility.

First off, the report gives you a range of between two and two and a half and seven and a half billion dollars, a huge range.

The cost to just purchase the assets is $9.3 billion dollars.

The study also omits some key costs, including the cost to make our remaining customers whole.

If the city were to leave, the surrounding cities and unincorporated county would see an increase in their rates.

There is a precedent that says that the city would need to make sure that that does not happen.

So there would be an exit fee of billions of dollars.

Finally, the city, this study also isn't including the significant wildfire risk that is part of San Diego.

It doesn't include the insurance costs or mitigation.

Thank you very much.

Thank you.

Next speaker is Brianna Berrowell.

Good afternoon, Council members.

My name is Brianna Birdwell.

I'm a local business owner and also run a local nonprofit.

So public power may be a good idea, and it may also be a costly idea.

Both things can be true.

My concern's not about protecting one institution over the other.

My concern is about workability, accountability, and integrity.

If the city is going to pursue a public power model, the process must be transparent.

The numbers must be complete.

And the public must understand exactly what they're being asked to carry.

As a ratepayer, I want relief.

As a taxpayer, I want responsibility.

As a contractor, I want fair opportunity.

As a community-centered business owner, I want solutions that do not leave the people with the least margin carrying the most risk.

At this time, without a clear and definitive understanding of the full cost, the risk and the impact on San Diego communities, I cannot support moving forward with the municipalization, and I ask that you do not either.

Thank you.

Thank you.

Bill Powers, while Bill approaches the microphone.

Could I have Mike Miller?

Gail Viamonte, Neil Winner, John Mattis, and Barbara Pinto approach the front row.

Please begin.

Bill Powers, board member Public Power San Diego.

I'll start with labor.

The veteran utility workers will be key to the new utility's credibility.

Labor does need to have a seat on the utilities governing board.

Labor also needs to be a part of the blue ribbon paddle that selects the critical initial governing board where the die gets cast.

New gen's first public power study for the city was in 2020.

That study only looked at distribution, distribution-only utility, low voltage.

It did not look at transmission and distribution.

Phase one and phase two looked only at TND.

But TND utility would be completely continued within the city's boundaries.

Crossing jurisdictional boundaries would trigger LAFCO review.

That would add six years to the implementation schedule.

That would be a momentum killer for public power in San Diego.

We obtained a phase two financial model through a public records act request.

New gen has set the model up so you can click a button and look at a distribution-only structure.

There is no more work to do to assess distribution.

That is the way to go.

Thank you.

Thank you.

Next speaker is allegedly Audra.

So, I mean, SDG and E ROMs Peter to pay Paul, but so do you guys.

And so that's what's concerning about this going into your hands, especially when you talk about savings and that not really being feasible.

Of course not, because SDGE is aggressively opposed to you guys doing this.

So this will end up in litigation.

So it will cost the people more than the billions of dollars that you are, you know, talking about here, and I mean with the storm infrastructure needing five billion dollars.

It's like how many billions of dollars do you guys need in order to provide the things?

But again, you can't be trusted with this type of thing when you are not good stewards of our money, and when this is going to be something that is uh San Diego community powers engaged with when they're talking about keeping data centers on and having the public and the community not have power during that time.

That is extremely egregious, and people need to pay attention to that because there's meetings that are talking about it.

Thank you.

Next speaker is Mike Miller.

Good afternoon, council.

Um, the more I learn about SG GE, the more of appalled I am at the amount of corporate greed that goes on at that organization.

Um their average profit over the last four years is over eight hundred million dollars, and their parent company also spends nearly $300 million annually in campaign donations and lobbying, including $100,000 to Donald Trump's inauguration last year.

Um obviously, there are a lot of questions and things that need to be figured out before this goes into place, and it's obviously an informational item, and I'm grateful that you're taking the time to consider it, and I hope that you consider to look at it more because I mean personally, I just can't imagine what I would do with an excess amount of $800 million every year, and I'm sure there's a better way that we can find to use that money to help the people of San Diego.

Thank you.

Thank you, Gail Via Monte.

Well, Gail comes to the microphone.

You do have time ceded to you by Neil Winner.

Neil, can you raise your hand?

Okay, thank you.

You will have two minutes.

Thank you.

My name is Gail Viamonte.

I'm a proud resident of District 9, and I'm also the chair of the Board of Directors of Public Power San Diego.

And I'd like to make an important distinction here.

There's a difference between a nonprofit public utility versus a for-profit investor owned utility and the definition of a municipalization.

A nonprofit public utility does not have to be, quote, run by the city.

So you can all kind of, oh, thank God.

But there are cities, this has been something that has been done for 100 years, all right?

And it's been done in over 40 cities in California, including Sacramento, by the way.

They do it, and on the average they have half the rates we do and better reliability.

So I think that's one key point I just like to leave you with.

The other point is our union brothers and sisters.

They deserve to have certainly their benefits, their compensation, their seniority, all of that protected.

I don't think that was really part of the study.

I mean, I don't think it was meant to be part of the study, but that's certainly part of any conversation I have personally been involved with that talked about the possible future of a nonprofit utility.

In fact, public utilities have an 80 to 90 percent unionization rate, whereas private utilities have, guess what, a 30% unionization rate.

All right.

So there's a really big difference.

So the unions would benefit, and I know that you know you have a contract with SDG and E, and that precludes certain conversations.

But you would benefit union members would benefit both in terms of their families and their immediate costs and in terms of their status.

No one is looking to change any of that.

Thank you very much.

Thank you.

Uh John Mattis is next.

While John approaches the microphone, I would ask that.

Patricia Mendoza, Nate Farrian, Audrien Fusek, and Kevin Machado, please approach the front row.

Please begin.

John Mattis here.

I'm here on the reality of the crisis facing the city of San Diego.

Proudly, you took the first step in a path forward.

The crisis is one quarter of the people here in this city can't afford their bills month to month, they can't pay SDGE.

You ask your question, why can't they?

Is it because they have the highest rates in the state?

Is it because they want another 8% rate increase?

That's the reality.

We have a path forward.

We have a plan.

We have a plan that saves your constituents tens of thousands of dollars.

Help us get out of this crisis of unaffordability of the key component of our life here in San Diego, and that is our outrageous SDGE rate.

Thank you.

Thank you.

Barbara Pinto.

Barbara, you do have time ceded to you by Isadora Lopez McGauley.

Can you raise your hand, please?

Thank you.

And Anna Kay.

Anna, thank you.

You have three minutes.

Thank you.

Good afternoon.

My name is Barbara Pinto, and I'm a resident of San Diego, the 8th District.

I live in Logan Heights, and I'm a member of Ace.

I have been a resident since the 40s in San Diego.

And San Diego Gas and Electric has been our only utility company.

So it is a monopoly on utilities provided since then and before.

As San Diegans, we are paying the highest prices for homes, rent, gas, food, and utilities, more almost than anyone in the nation.

Our utility provider dictates costs, increases services, and sets no limit on their profits.

Last year they made a whopping $563 million in profits.

And that figure was roughly one-third lower than it was the previous year.

I'm a senior citizen living on a fixed income of Social Security and a modest retirement.

I went back to work around 2018 to keep up with the cost of living and inflation.

I lost my job due to COVID in 2021.

I prioritized my rent and I got behind in my water and my utility.

My current utility bill is over $3,500.

I enlisted in a debt forgiveness program that says that they would work with me to forgive part of my debt.

I agreed to pay $111 a month for 12 consecutive months.

But that cost changes according to my everyday usage.

I wasn't told that.

Why is there no limit on what these companies can make in profits?

Even with my return to work, I am struggling.

We need services offered at more affordable rates.

We need more competitive companies, putting people before profits.

Thank you.

Thank you.

Next speaker is Patricia Mendoza.

Hi, my name is Patricia Mendoza.

I'm a member of ACE.

Energy is a basic necessity that every family depends on.

We needed to cook meal, to cook meals, keep the lights on after dark, wash clothes so our children can have clean clean clothes to wear.

Yet these high utility rates make it everyday activities a source of stress, often forcing families to make difficult choices about the bills to pay and which bills to put off.

It's especially troubling now that summer's here.

It's gonna be more hot.

People can't afford air conditioner.

It's gonna get cold and wetter outside.

People can't afford adequate heating.

But right now, I also want to acknowledge all our brothers and sisters here, you know, our union brothers and sisters here.

I heard it and I had another speech written, but I want to hear you guys too.

I want to put their voice out there too because we need public power.

We really do.

But it concerns, but um, on your concerns about job security, we do need public power, and we need it not at the expense of other working class people, other working class jobs.

Thank you.

That does conclude your time.

We can work together.

I'm walking.

We can work together.

We can work together.

You're still talking though, so Nate Fairman.

We can work together to make this transition good.

Okay, possible for all of us.

Thank you.

All right, she's set to town.

We're not gonna do that again, okay?

We're gonna keep this civil.

You guys have been fantastic.

So I'm gonna build a passion on the both sides.

I've been clear and unambiguous, but let's have a good civil dialogue.

Nate, you have uh three people seeding you time.

When I call your name, please raise your hand to confirm you're here.

Uh, Lozano.

Thank you.

Carrie Clark.

Uh Carrie Clark.

Corey.

Oh, Corey.

Sorry, thank you.

Oscar Gomez Jr.

Thank you.

Uh, you have four minutes, please begin.

Good afternoon, council members and city staff.

My name is Nate Fairman, Business Manager of the International Brotherhood of Electrical Workers, Local Union 465.

I represent 2,900 union utility workers here in San Diego and Imperial Counties.

And look, I know why we're really here.

People are not happy with SDGE.

They're not happy with their rates or their skyrocketing profits.

People are mad at the never ending corporate profits that are pulled from our pockets and funneled to separate shareholders.

And to be 100% honest, my members are mad too.

Our members have more in common with you in this room than utility CEOs or executives.

Working class people are struggling.

They're struggling to get by, and something needs to be done to provide support.

But I promise you, brothers and sisters, this ain't it.

Our union and our members share a mutual interest in the city's success and the success of our communities, success of our mayor, our council, and the utility who's delivering these essential services to San Diegans.

Municipalization is bad for everyone.

It will not solve for affordability.

It will destroy our union contracts and force layoffs of union workers.

Each phase of the new gen study continues to diminish or ignore addressing worker protections and safety.

The fire risk and liability the city would assume under municipalization and the occurred debt the city would force to be taken on with this effort.

High voltage infrastructure demands significant investment, and the operating continue the operating costs continue to be significantly underestimated.

There's no guarantee that the infrastructure the city purchases will be maintained sufficiently to keep my members safe.

I was in these chambers just weeks ago when you were debating closing public bathrooms in order to close a 175 million dollar budget deficit.

What happens when you have a budget deficit, but now you run the power company?

You can't just shut down a substation.

You can't just turn the lights off to save money or limit the hours that you provide electric service, like the grid is a public library.

You can't balance the budget by robbing resources from grid maintenance or pole replacement.

If you do that, you might have mass outages, blackouts, and wildfires.

So where's the real cost associated with the fire risk and liability?

Where's the real numbers on the billions dollars of debt the city and our taxpayers will carry for decades?

Each phase of the new gen study has not provided you or our taxpayers with an accurate picture of that risk, of the cost, of the liability and the risk the city will be undertaking to municipalize.

It's a lot.

It's $9 billion.

$9 billion at a time where the city is laying off workers, when the city is closing bathrooms, the city is defunding the bomb squad and relying on donations to keep your arts programs alive.

You just cut seven million dollars from your own climate action fund.

You don't have the money.

You don't have the resources and you don't have the expertise.

So we're asking you to please not do this.

But I will end with this.

If SDGE doesn't offer immediate rate relief to our communities most at need, we will be back here having the same presentation with the same advocacy and the same level of frustration.

The utility affordability crisis isn't going away.

Until we sit down with honesty and empathy for our communities that are struggling, I fear this cycle will continue.

And the IBW stands ready and willing to have that conversation.

Thank you very much.

Thank you.

Our next speaker is Arian Fusek.

If you could approach the microphone, you have several speakers speeding seating time to you.

Matthew Pendergraft.

Thank you.

Randolin Driver.

Thank you.

Asmund Coleman.

No?

Okay.

You'll have a total of three minutes then.

Okay.

Thank you.

Thank you so much for having me.

I'm Dr.

Adrian Fusick.

I live in District 3.

I served in the U.S.

Peace Corps, and I'm a member of CFA, which is a California faculty association.

I teach environmental science and sustainability at SDSU.

My students are bright, they're motivated, they're innovative, but as they get out there and gain work experience, unfortunately, they're learning about the injustices that are deeply embedded in our systems and structures.

The sad reality that our utility company is a monopoly extracting wealth from the community to transfer it to its already wealthy CEOs and shareholders is an example of environmental and social injustices that we've been forced to live with.

This system, under the investor-owned utility, makes life harder for the average San Diegan, and it stifles innovation and progress.

But there's a better way.

The study focused on different variations on one specific scenario for acquiring the grid.

It demonstrated that public power will work in San Diego, and it also demonstrated that public power will be good for San Diegans.

Not only financially, but public power would turn decision making over to us, the people who live here and are impacted by local energy decisions, not shareholders who probably couldn't care less about the struggles of everyday San Diegans.

Public power has been successful in other cities, so it makes sense that it would be successful here, where we pay the highest electricity rates in the continental United States.

It's important to remember that the phase two study is a baseline, and it shows that it's possible.

We don't need to have every single technical detail worked out right now, but what we do need to do is commit to making action to making it happen.

As local owners of the grid, we can determine what works best for us.

We can ensure that labor remains whole and has agreements to ensure that people operating the system are involved in the decisions that impact them.

We can tailor the scale of the infrastructure, and we can explore different governance models.

We can trade the status quo for low energy costs and local control.

Imagine what that would do for our city.

Lower energy costs are key to economic growth, cutting emissions, reducing inequalities, and spurring innovation.

So once we're out from under the Thomas Empra, we could be a model of community resilience.

We could have virtual power plants, bidirectional charging, microgrids, agile and proactive technology to mitigate growing climate risks.

We could decide if and where data centers enter our city.

Ultimately, we have the power now to commit to transitioning to public power.

And when we do, every aspect of that transition would be our under our local control.

And like my students, we have the imagination, the creativity to create something really wonderful that can serve us all.

Thank you for your comments.

That does conclude your time.

Next speaker is Kevin Machado.

While Kevin approaches the microphone, I would ask uh Will Smith, Kevin Zavala.

Rachel Kiss.

Lane.

Wayne Shaffron.

Sorry if I said that wrong.

And Park Troutman to please come to the front row.

Kevin, please begin.

Hello, my name is Kevin.

I'm a worker here in San Diego.

Working families of San Diego are tired of the cost of living going up.

SCG has consistently raised the rates.

In the past decade, SGE has raised their rates on average 7% per year.

They're taking a billion dollars from us every year and doing nothing for our communities.

That money could go to San Diego Schools, San Diego Libraries, San Diego workers, and San Diego infrastructure.

SDG wants more of our money for their owners and Wall Street.

SCDE SUNY's profits this quarter is 290 million dollars, and they'll likely break a million in profit this year.

And regardless of that, they still are proposing another 280 million dollars more every year.

If we don't act now, another decade will pass, and San Diego will still be struggling with the cost of living.

We have the opportunity to change that now.

Public power will lower the cost of electricity for generations.

The visibility study will save San Diego's money.

It will work here, it's work everywhere else.

They've tried it.

The minimum the minimalization in Sacramento has been a complete success.

They pay half of what we're paying.

I encourage the council to be brave and act in the message of San Diego.

Thank you.

Will Smith.

You do have Andrew, seeding your time.

Andrew, could you raise your hand, please?

Thank you.

You'll have two minutes.

Good afternoon, Council.

My name is Will, and I live in District 5.

Over the last few years, I've moved around San Diego several times.

Every neighborhood has been different.

But in each one of them, life keeps getting more expensive.

Like many people in my generation, I already worry about the cost of rent, groceries, gas, and health care.

But one bill seems to go up no matter what I do, electricity.

Recently I was fortunate enough to move somewhere with solar panels.

I thought I would finally get some relief.

Instead, I watched SDGE continue to make decisions that made it harder for ordinary people to lower their bills.

It feels like no matter what we do, the system is designed so that shareholders win and working families pay the price.

We don't want to keep having to choose between keeping our lights on and putting food on the table.

Beyond affordability, I've also seen the consequences of SDGE's failure to properly maintain its infrastructure.

Wildfires fueled by neglected infrastructure threaten our communities, our environment, and the places that make San Diego special.

I want future generations to be able to enjoy our parks, open spaces, and beaches without being under the constant threat of very preventable disasters.

That is why I'm here today in support of SD public power.

I want a utility that answers to the people of San Diego, not investors.

I want money we spend on electricity to stay in our community and be invested in reliability, clean energy, and affordability.

Most of all, I want future generations of San Diegans to be able to afford to live in the city they call home.

Council, these issues affect real people, real families, and real voters.

Today you have a choice.

Stand with San Diegans struggling to afford an essential service or stand with a monopoly that continues to raise rates while posting record profits off the backs of working class families.

The voters of the city will remember that choice.

I urge you to move forward with SD public power.

Thank you.

Thank you.

Kevin Zavala.

You have time ceded to you by Robert Friedman.

Could you raise your hand, please?

Thank you.

You will have two minutes.

Good afternoon.

My name is Kevin Zavala.

I'm a Marine Corps veteran and a district four constituent.

Over the last decade, SDGE has driven electricity rates up by more than 80%, far outpacing inflation and leaving San Diego residents with the same with some of the highest utility bills in the nation.

We're told these increases are unavoidable.

But what do the facts say?

After the devastating 2007 San Diego wildfires, the U.S.

Supreme Court ruled that SDGE could not pass 379 million dollars in fire-related litigation costs to ratepayers because the damage was caused by the utilities' poor maintained equipment.

Shareholders, not customers, were required to bear those costs.

However, SCGE later exploited a legal loophole.

While barred from charging customers for past damages, the company successfully shifted 100% of its ongoing wildfire mitigation and infrastructure hardening costs onto ratepayers.

As a result, customers are paying billions to repair and upgrade infrastructure that the utility neglected for years.

This is the consequence of a private monopoly accountable to investors rather than public the public it serves.

In response, Public Power San Diego is working to establish a publicly owned utility that will prioritize affordability, transparency, and local control.

Public records show SCG has spent millions on lobbying and political influence efforts to block public power proposals and protect its monopoly.

The choice is clear.

Continue accepting endless rate hikes, or support a public power future that puts the people first.

Thank you.

Rachel Kiss.

You have time ceded to you by Dale Homburg.

Thank you.

Good afternoon.

My name is Rachel Kith.

I'm a San Diego resident, a mother of three young children, a homeowner, and a small business owner.

Like many families, we've made sacrifices over the last few years as the cost of living continues to rise.

We budget carefully, we compare prices, we make difficult decisions about where our money goes.

What's frustrating is that while families are expected to tighten their belts, SGGE continues to come back asking for more.

How much is enough?

Electricity is not a luxury.

It's a necessity.

Families need to keep food cold, home safe, and children comfortable.

Small businesses need to survive, yet we're paying some of the highest energy rates in the country.

What's especially concerning is that more and more of these costs are being shifted into fixed charges.

Whether someone lives in a small apartment, an ADU, or a large home, whether they conserve energy or not, they're being asked to pay more.

Families are being told to use less energy while simultaneously being charged feeds that they cannot control.

That undermines both affordability and conservation.

Today isn't just about a feasibility study, it's about accountability.

It's about exploring whether there's a better path forward that puts residents before profits.

I'm not here because I have all the answers.

I'm here because I believe the people of San Diego deserve leaders who are willing to ask hard questions and seriously explore alternatives.

When SDGE asked for another increase, it's a line item on a spreadsheet.

For families, it's groceries, kids' activities, savings, a peace of mind.

Those costs are real, and we're feeling them.

Please seriously evaluate every option available to bring affordability, transparency, and accountability back to our energy system.

And please remember that behind every rate increase is a family trying to make their budget work.

Thank you for your time.

Thank you.

Lane Sharman.

Lane, you have uh time seated to you by Catherine Harrison.

Can Katherine raise their hand?

Thank you.

You'll have two minutes.

Good afternoon, Council.

My name is Lane Sharman.

I'm a fifth generation Californian.

And I'm also the proud founder and initiator of community choice aggregation in San Diego, along with Bill Powers.

We have public power in San Diego, don't we?

We've had it since the Salon Energy Alliance was founded by Lisa Heepner, your colleague.

She did that because it was good for the city of Solana Beach, that tiny little city up north.

And why was it good for it?

Because San Diego Gas and Electric, then as now was taking advantage of every single ratepayer, then and now.

Your legacy, your future, your ability to lead and do what's good for this city, is before you.

Fear is the only thing that we have to fear right now.

This is going to be great for unions.

It's going to be great for the people of San Diego.

It's going to be good for our future.

So I just beg you to do what Lisa Hiebner did in 2016.

She wrote why it was good and she published it.

Each one of you could do that.

And it would be an amazing way of clearly stating why this is good for San Diego because you will work through all of the issues, including the fears.

And I just want to thank each and every one of you who takes that action and dedicates themselves to the future of San Diego.

Thank you.

Thank you.

Next speaker is Park Troutman.

While you approach the microphone, I would ask that James Ferguson, Diego Sandoval, Tyler Andre, Isaiah Glassoff, and Alison Miller, please approach the front row.

Park, you have five people seating time to you.

Angelo Haynes.

Thank you.

Doris Wynne.

Thank you.

Michael Brackney.

Thank you.

Janet O'Day.

Thank you.

Five minutes, please.

Please begin.

Thank you.

Good afternoon, council members and council president.

My name is Park Trumpman.

I'm with San Diego 350.

What I want to talk about is San Diego Gas Electric's general rate case that was filed last week.

The general rate case is a huge filing in which investor-owned utility tries to convince the California Public Utilities Commission that they should be allowed to raise their rates over a four-year block.

For 2028, the first year of the four years of the rate in increased request, SDGE asked permission to raise the residential electricity rates by about $14 per month, which is a little bit more than 7%, and the residential gas rates by a little bit less than $850 per month, which is about a 13% increase.

The California Public Advocacy's office tracks SDGE's rates versus inflation.

They've done this since 2014.

The cumulative impact of their increasing their rates more than inflation is that they have increased about triple inflation.

This request for the general rate increase, the general rate case, which is really the window into how they're thinking about the future, is actually a little bit more than their average request for the uh since 2014.

And they make a similar request in 2029, and in 2030 and 2031, they only request an increase of 5.5%.

And keep in mind that these rate increases that are in the general rate case are merely the baseline of what they're asking for.

Increasingly, investor-owned utilities are asking for rate increases outside of the general rate case, so we can expect that they will keep continuing to ask for more, and these are through their balancing and memorandum accounts where they spend money and then say, oh, we already spent this money.

We get reimbursed by paying or charging ratepayers more.

So just let the audacity and compulsiveness of this sink in.

Public anger at investor-owned utilities has begun to affect the outcomes of elections nationwide.

And SDGE, which in a JD power study, excuse me, a brand appeal of utilities in the Western US that they did last year.

SDGE was 28th out of 30th, near the absolute bottom because of the high rates.

They are so out of touch, they are going to continue, they are continuing to ask for more.

SDGE apparently does not feel the same.

This means that when we look at the impacts of the cumulative benefits, I believe that was slide 11.

We should be concentrating on the highest bar, showing the highest possible savings, because that is the most likely.

We know this because SDGE is telling us so.

They are going to continue to ask.

So what does this mean going forward?

We are not going to if we know they're going to continue to ask for more rate increases.

We're not going to be having the same conversation.

We're not all coming back having the exact same conversation.

It's going to be worse.

People are going to be more frustrated.

Rates are going to be higher.

We cannot sit on our hands, we cannot say, wait to see what happens in San Francisco.

And though these are not options.

Thank you.

Thank you.

Our next speaker is James Ferguson.

James, you have Deborah Winthrop.

Is the time to you?

Deborah, can you raise your hand?

Thank you.

Two minutes.

Thank you.

My name is James, and I live in North Park.

And I have been an advocate for climate issues and our energy systems for my entire adult life, which is actually pretty long.

I went to college in 1975, and that's where I took environmental science.

I'm a retired naval officer and anesthesia provider.

And this has been a passion of mine for that long.

I'm now Senate liaison for Citizens Climate Lobby.

And I must tell you that we're working on transmission issues this year with the federal government.

And I tell you that the dependency model of early monopoly electronic electrical systems no longer serves us well as electrical demand will double or triple in the next 20 years because of data centers, electrification, reshoring of business, et cetera.

Favoring big distant production and long wires with the CPUC guaranteeing double-digit profits over whatever costs are incurred.

SDGE doesn't even have to try to economize.

So they are incentivized to spend as much as possible because it's a percent above the cost that they incur.

While lack of profit incentives for uh upgrades and maintenance of the not very lucrative capacities of the local distribution grid is a failure to accommodate local generation and storage, which we could do.

We have a lot of available storage opportunities and solar opportunities, but an SDG technician came to my house to explain to me why my 200 amp panel is frying, and it's because he just said, Well, there's a lot of solar systems around here, these old circuits just can't handle it.

So we pay the highest rates in America, uh in the continental states.

It's two times California average, but three times the national average.

Thank you.

Thank you.

Next speaker is DeAndo Diego Sandoval.

Uh you have time ceded to you by Ben Ungs.

Ben, could you raise your hand?

Thank you.

And Pamela Isaacs.

Thank you.

You have three minutes, please begin.

Thank you.

Good afternoon, City Council.

My name is Diego Sandoval.

I live in District 8, and I'm here today to ask you to choose public power over the greed and power hungry SDGE.

SDGE wants you to think that they're serious about what's doing best for our environment and people.

When in reality, they're just doing what's best for their pockets.

So much so that they changed the G in their logo to green.

Now it's green.

How nice is that?

In truth, SDGE supports fighting climate change insofar as they can profit from it.

And households across San Diego are feeling that every month.

For a company committed to net zero, they are still incredibly enthusiastic about fossil fuels.

SDGE is owned by Sembra, which has invested heavily in the transportation of what they euphemistically call natural gas.

Natural gas is the most highly potent greenhouse gas, methane.

To quote the chairman and CEO of SEMPRA from last month, they are very bullish on the liquefied natural gas trade long term.

This is not what you say when you're serious about net zero or what's doing best for the people or the climate that they depend on for livable future.

This corporation's mentality of grasping what every buck they can be seen is uh can be seen in their filing for their general rate case.

They claim that they need to raise their rates for wild farm mitigation in the case of ongoing climate changes, yet on the very same page, they also say they want to raise rates to support the construction of new gas facilities.

Does that make sense?

They want us to pay more so that they can continue contributing to climate change, then use climate change as justification for us paying more.

SDGE does not care about people or the environment.

They only care about profit, not progress.

San Diego can do better.

This is why I ask for you to choose public power today, but also to work with our union brothers and sisters to ensure that they are considered during this transition.

To echo the opinions of a previous speaker, we can do this together.

Thank you.

Thank you.

Next speaker is Tyler Andre.

Uh Tyler, you have several um individuals seeding you time.

Uh Kerry Quatlander, thank you.

Aki Smith, thank you.

Fred Lefure.

Thank you.

Rhea Coleman.

Thank you.

You will have five minutes.

Please begin.

Uh good afternoon, Council.

My name is Dre.

I am a resident of District One, a Navy veteran, and a small business owner, as well as a proud volunteer with San Diego 350 and Public Power San Diego.

Now, why are so many people motivated to be here on a Monday afternoon?

And why does SDGE solicit curses from every San Diegan who hears that name?

It's because every single one of us has had that moment.

The one where you open the billing app or the bill lands on the counter and you just stare at it.

Maybe you reread the number like it'll change.

It won't, in case you're wondering.

In fact, don't look at it too many times, because they're going to charge you extra for that.

And what's maddening is that we live in one of the sunniest cities in the country.

Solar is now the cheapest electricity on Earth, and we are still paying some of the highest electric rates in the continental United States.

This is a broken arrangement created by an investor-owned corporation.

In fact, here are the numbers straight from the CPUC.

Since 2014, SDGE's residential rates have gone up about 117%.

Inflation over that same period 39%.

SDGE's rates have grown three times faster than the cost of everything.

Three times.

Right now, nearly one in five SDGE households are behind on their bill, owning an aver owing an average of over 500.

Those are our neighbors that's multiple people in this room right now.

And this doesn't stop at our electric bill.

Local businesses pay these same rates and that cost gets built into the price of your coffee, your haircut, your kids' daycare high electric rates are a hidden cost on every transaction in this city are water rates.

MTS also facing a deficit has to pay them too.

So that's why we're here because we're tired of subsidizing a system that costs us three times more than it should in the one city in America with the least excuse for it.

But here's what I'd like to think about.

This is the business model working exactly as designed SDGE is a government granted monopoly you can't shop around for your power.

And under California's regulatory system it doesn't make money by giving you cheaper or better power.

It makes money by spending more on infrastructure because the state guarantees its shareholders a return of nearly 10% on every dollar that it spends not on outcomes but on spending SDG boasts up to one billion dollars in annual profits and that money comes from somewhere it came from us.

Yet they'll shut your power off it is also why SDGE doesn't celebrate it when your neighbor puts solar panels on their roof.

Solar that we the ratepayers pay for personally under this business model your rooftop solar is a loss of revenue to them not a win for the grid.

And SDG's parent company, Sempra, is one of the largest builders of fossil fuel export infrastructure in the country.

So while we may be doing our best to go green, the company taking our power bill is in other corners of its empire building out more fossil fuel infrastructure.

And they protect this arrangement the same way every entrenched monopoly does with money in politics Sempera spends over a million dollars a year lobbying Sacramento and the very commission that sets its profit margin take a look at where Semper and SDG donate their money our money this isn't just about a high bill it's about a monopoly that profits by spending more fights the clean energy on our roofs and spends our money lobbying the people meant to hold them accountable.

This is unacceptable this is nonpartisan and this is wrong.

I want to end with a question to the room and I think you all actually might know the answer.

How do you spell corporate greed S D G and E.

Thank you counsel thank you for your comment our next speaker is Isaiah Glassoff.

Isaiah you have several people seating you time so I'll just need to confirm they're here Robern Gilbert thank you.

Mary Feyfield thank you Andrew Lundstein thank you.

Jose Lopez Eugenio, thank you.

And Mike Mimi.

Alright thank you you'll have six minutes please begin.

Good afternoon council members.

My name is Isaiah Glasso and I'm the program director for Public Power San Diego.

I just want to take a moment to thank all the volunteers who came out to support the Phase two public power study and public power in general I really do appreciate it from the bottom of my heart.

This new gen study shows even in the most conservative of modeling that public power is good for San Diego and it's good for San Diegans.

The key number that determines this amount of savings is the revenue growth rate.

New gen assumed 4% and admits that 6% is more realistic.

And it's a total slap in the face that just a couple days ago SDG filed for an 8% increase in 2028.

The second you take this model, rev it's the second you take this model and use a revenue growth rate that's anywhere near reality, the savings are absolutely mind-blowing.

And it seems to me that we're actually pretty close to consensus on that.

Which makes common sense because when you cut Wall Street profit out of our electricity bills, you will see savings.

Many of us here today knew this back in 2020 during the franchise agreement fight, and again in 2024 during the Power San Diego campaign.

Public power was the right choice in 2020.

It was the right choice in 2024, it's the right choice in 2026, and it'll be the right choice in 2023.

The question is not if public power saves money.

The question is: when will we have a council that is brave enough to take on the corporate oligarchs at SDGE?

All of us here today are being ripped off by SDGE, including the city of San Diego.

The city pays an SDGE bill.

The water department pays an SDGE bill.

The sewer department pays an SDG bill.

Electric rates are a cost inflator on the entire city budget.

Public power would help the city's structural deficit, not harm it.

We really truly are the council and the people of San Diego on the same side against SDGE.

And moving forward, we absolutely must protect IBW, guarantee their fought hard hard-fought labor contracts and hard-earned pension funds, and that is absolutely doable with public power.

Now I've got a message for the bosses at SDGE.

The public power movement is only growing.

Your days are numbered of pillaging our community.

Your for-profit monopoly will end.

Thank you.

Thank you.

Alison Miller, while Alison comes to the microphone, I will ask Blair Beekman, Jessica Anderson, Nicole Lilly, Laura Sadania, and Dory Rogeman to please come to the front row.

Alison, please begin.

Hello, council.

I am a resident of District 3, and I am here today because a quarter of your voters and my neighbors are in debt to corporate greed, SDGE, at any given time.

They're on track to make a billion dollars in profits yet this year, yet they continue to ask for more.

During the same time period, they've been participating in union busting.

They've been turning to private contractors that hurt our union neighbors.

We the supporters of the public power movement are committed to working with our union neighbors as we implement public power and ask you to commit to the same.

Opponents today have argued that there isn't enough information to take the next step, but you have before you data that is founded on good information.

Today is the time to take the next step.

There will never be enough information for some people.

Today San Diego pays and SCG profits.

But San Diegans deserve to own the goods and services that we pay for, so today I'm asking you to reject corporate greed and act in support of San Diegans by supporting public power.

That does conclude your time.

Blair Beekman.

Alright, I'm already here.

Shoot.

That's my time.

Thank you.

I'm not very knowledgeable about these things, but I come from the Bay Area.

They have a great tradition of community energy and uh working with unions.

I feel I have to refresh myself on such subjects.

I hope you guys are learning that too, that the municipal things weren't offered here for union things.

Uh, I hope there can be dialogue between everyone.

It sounds like people want to have the dialogue, and we definitely want to believe in the future of what community energy can offer.

Um, where you mean a municipal system may not work, we do have little small programs, you know, like the funding of neighborhood uh infrastructure that can be called a municipal program possibly and and work in those kind of avenues.

But working towards the overall goal of community energy, I hope we're all on board on that subject matter and uh want to be building uh such good things for all of us in our future.

Thank you.

Thank you.

Uh Jessica Anderson.

Um, hello, council.

Uh, month after month over the past year, my utility bill has continued to climb, reaching nearly over $300 every single month in my first apartment out of college.

This is unaffordable.

It is ridiculous that SDGE profits nearly a billion dollars a year, yet one in five San Diegans cannot afford their utility bills.

It is ridiculous that SDGE claims that this is not feasible when they are asking for an 8.6% increase at the CPUC.

It is absolutely ridiculous.

When San Diegans are forced to choose between food on their table, paying their rent and paying their utility bills, it is clear the system is broken.

Public power is a real opportunity to address this crisis.

Public power presents us with the opportunity for clean, affordable energy.

Public power presents us with the opportunity for clean air, public health, the opportunity to protect strong unions, and to protect people in San Diego who cannot afford to live here any longer.

Public power is a real viable opportunity to build a more affordable and thriving San Diego.

Thank you.

Thank you.

That does conclude your time.

Nicole Lilly.

Nicole Lilly.

Okay.

Oh, here she comes, all right.

Sorry.

Hello, my name is Nicole Lilly.

I'm a 23-year-old Renturn Goldenhill and the executive director of Our Time to Act, a youth-led 501c3 nonprofit organizing powerful youth for an inclusive, equitable, and sustainable future.

As youth organizers, we have become all too familiar tackling complicated and nuanced issues and creating new and innovative solutions because it is what is necessary.

I support the implementation of public power without denying the necessity of labor considerations.

We need not be divided.

Dismantling monopolies like SDGE is an effort that we must join together to pursue.

Utilities like housing and health care are basic needs, and allowing it to be maintained as a tool for profit because it is complicated, is unacceptable.

Everyday San Diegans, young organizers like myself, demand a commitment from this council to do what is complicated because it is necessary.

My roommate and I figure out how to make do with less and less every month to survive in San Diego.

I urge the city to do more to make San Diego work for all the people in this room, not the corporations that bleed us dry.

Thank you.

Lori Sildania.

Good afternoon.

And I want to just acknowledge and thank all the people who have spoken today because the perspectives are important, and I think they've all raised some really excellent points on both sides, for and against this.

There are a few certainties in life.

We know a couple of them, death, taxes.

I'll add a third, SDGE asking to raise their rates.

300,000 people at least cannot afford to pay their higher rates here in San Diego.

We pay the highest rates in the country.

So with certainty, when I heard the report on my way in today and listened to the report saying an estimated 3% rate increase would even out over time, I think you're way underestimating what SDG intends to do.

So in the interest of time, I will just point out one more thing working against us.

Ms.

Von Wilpert, you have received $5,000 as of March 31st from IBEW for your run for Congress.

I would ask that you please recuse yourself from voting on this.

I think you have a conflict of interest and time.

Okay, take it easy.

This is an information item.

There is no voting.

Dory Brugman.

You do have time ceded to you by Barbara Hafe Rosetta.

Okay, you will have two minutes.

Please begin.

Good afternoon, Council.

I'm Dory.

I'm an executive board member of Public Power San Diego.

And some of the points I had written down here today have already been said, so I'll skip those.

But I wanted to read a couple of quotes from the feasibility study, phase two.

The first quote that I have here is the financial risks, while real, are manageable through careful planning and execution.

The municipal electric utility remains viable, even under adverse scenarios.

The bottom line is that this report shows that this is feasible.

This quote also tells us that when we build a public utility, we are building a domain where success lies in our hands.

And I want to say there's been a lot of fear mongering here today.

Um I also just want to shout out thank you, Brittany Ciz for the fear mongering directly from SDGE.

She did not identify herself, but she does work for SDGE.

Um I want to talk about the risk of not making the choice to switch to public power and instead making the choice to stay the course where we are.

Hoping that legislative reform or CPUC reform will somehow fix this problem.

I had a great example of the way that they exploit loopholes, any block or any roadblock we put in their way, they will exploit.

We are not winning as much as we need to be to fix the problem at the state level.

But the point is that public power is not uniquely risky.

And also we're lucky that we have this option that we are a city and we can actually do something significant to make a change and get out under the thumb of SDGE.

So I want to echo what my allies Patricia and Diego said.

We can do this, we can work together.

This is a growing movement, and don't let the fear mongerers get to you.

Thank you.

That does conclude your time.

Omar Walter and Nadie.

One minute.

One minute, yes.

The city of San Diego is uniquely positioned to chart a different course with national consequences.

Climate is one of the greatest natural resources anywhere in the world.

We have an abundant sunshine, growing clean energy sector, world-class research institutions, and a population that's consistently embraced innovations.

We're not simply capable of generating enough clean energy to power our homes and businesses.

We have potential to become a net producer of energy, creating economic value that remains in our region rather than leaving it.

Decision being made right now will determine who benefits from this growth, this opportunity.

Reinvesting in affordability, reliability, infrastructure, and local priorities, or will it continue to flow primarily towards a system designed around shareholder returns?

We have every incentive to preserve this model.

If we were part of this SGD role, we that's an investor owned utility.

We understand that.

But as you guys represent us, the citizens, your responsibility is about what serves San Diego's best.

Sorry, I'm not a professional speech.

This is my first speech in years.

But anyway, I think this is uh to ask uh the biggest question is ask whether next generation of wealth created by the energy economy should be captured locally and used to benefit communities that created it, or are we gonna continue to give it to SDG?

This isn't uh an energy decision.

Thank you.

That does conclude the economic development decision.

Bob Kazewski, please.

I just walked to the parking structure with uh former council member Mark Kersey.

Uh he was kind enough to listen to uh my questions about why the city can't do the simplest things uh to oversee the many businesses that operate throughout this city.

You know what he said to me?

He said there was too much going on in this city for the council members to deal with all the details in the city.

Too much going on for you to deal with.

Now I'm not an expert on energy, but I have become an expert on business interests, hijacking the city government for their own purposes.

If you have any doubt, look into how this city, that's you, Joe La Cava, and Todd Gloria, have mismanaged the Tory Pines glider portal.

Thank you.

Thank you.

Our final in person speaker will be Anthony Ralphs.

Good afternoon, City Council.

I want to remind everybody in this room that we all share one thing in common.

We're all getting ripped off by SDGE.

And it continues every day, year after year.

1 billion dollars in profits last year, almost a billion the year before.

I'm sick to my stomach.

I'm tired of not being able to pay my energy bills.

I'm tired of the people in my city not being able to pay their energy bills.

I'm tired of one quarter to a fifth of the people in this city not being able to afford meeting their energy bills at the end of the month.

I'm tired of seeing a corporate monopoly and its greed prioritized over the people that live in the city.

I am a union member.

I'm a member of IWW, the industrial workers of the world, so I understand the priority that labor places in our lives, but I also understand that only half of the people in this room are getting paid handsomely to be here.

And it's not those of us who hate SDGE for free.

Thank you.

Thank you.

We also received uh two speaker slips uh from individuals wishing to register their position in favor but not speak from Brandon Reynolds and Karina Vega.

That concludes in-person public comment.

I've started the five-minute timer, and Council Chambers.

We will now turn to the virtual queue in which there are currently 10 speakers requesting to speak.

We will begin with Eric Bruvold.

Oh shoot.

Hector, Hector here.

Imagine every uh single family house in Bluplex in San Diego covered with twice the solar panels there are now, and they're gonna get paid three times more for the energy.

Imagine Fashion Valley covered in solar panels, mission valley covered in solar panels, the parking garage, all there, creating power.

And then imagine every trolley station covered in providing shade and solar energy to feed the DC motors on the trolley instead of using AC, dropping down to DC, feed them directly with solar panels on the trolley system, even the tracks elevated up from the tracks.

We're now doing AC power and turning that AC power into DC, causing energy when we can generate it from solar panels right there at the trolley stations.

No SDG at all involved, just solar.

Thank you.

That does conclude your time.

We'll go next to Eric Bruvald.

Apologize, Eric.

Perfect.

Thank you so much, Council.

My name is Eric Bruvald, and I am the CEO of the San Diego North Economic Development Council, representing an area north of SR 56 with more than one million residents and 500,000 jobs.

I urge caution and ask that the city pause this effort until the regional implications are better understood.

The report itself acknowledges that the electric system was not built around city boundaries.

Numerous substations and other assets serve customers both inside and outside the city.

Yet the report appears to assume that separating and operating these assets can occur smoothly and cooperatively.

That is a significant assumption with major implications for reliability costs and neighboring communities.

But most importantly, the report does not adequately explain how a municipal utility would participate in regional wildfire prevention, weather monitoring, and emergency operations.

Before moving forward, North County communities deserve a clearer understanding of how municipalization would affect them.

Thank you for your comments.

Kathleen Lippitt.

Thank you.

Good afternoon.

Thank you to everybody who spoke.

Governor Newsom allowed California utility companies to taxpayer dollars from the state.

$21 billion dollar wild fund, wildfire fund to pay for their damages, fines, and liabilities for fires that were directly tied to SDGE.

For every dollar the utility spent building infrastructure, they were allowed to charge customers an additional ten cents and profits for their shareholders.

They routinely, their priority is profit for their executives and shareholders, and they routinely disregard public priorities.

They disregard biodiverse habitats that support migratory birds, reptiles, pollinators, and they're ignored on behalf of permitting STG and E to put their power lines.

They now want to ride put their power lines directly through the Anza Barrago Park.

That is a designated park in perpetuity to protect those.

Do you that does conclude your time?

Frances Yasmin Matawala.

So first it's I think it's important for everyone to realize that like the entire state of Nebraska has municipal run power.

This is not impossible task.

Any government can do it if they just create the public the political will to do it.

Um I think that um every one of the council members should attend the American Public Power Association's annual conference, and you can learn about uh and meet cities, people from cities all over the country that enjoy the benefits of public power that we are only dreaming of.

Uh, I want to say that the SDGE business model, um, it's not about um uh security or or uh affordability, it's about profit and even the way they're designing the future with long transmission lines out to the desert is the wrong way to go.

It's not sensible unless you're trying to exploit people for money.

Uh SDG takes a million dollars a day out of the city and three million a day out of the county, it's gotta stop now.

Thank you.

John Stump.

Hi, John Stone.

On December 15th, 2025, I sent the council a nine-point program to get out of this mess with SDG and E.

And the key thing in this nine-point program, which I'm sending you again today, is that the city should create its own municipal utility for its own use.

The city currently now generates its own power and spends a lot of money uh paying SDG and E.

The city could easily set up its own department, and that would be the initial step, the transitional step towards public power.

City Council, start exploring where you spend money and where you generate electricity now, and set up a separate department to watch that.

Please follow the direction of my letter of December 15th, 2025.

Thank you very much.

Thank you.

Uh please note that the five-minute timer has concluded with eight speakers left in the queue.

No other speakers will be taken.

Uh after this time via voices, please begin.

Hi, my name is We Chan.

I'm a second director for B voices.

I'm calling the support, you know, to post for the public power.

I know that I also think it kind of ironically, we need a study to figure out whether or not we should put public power.

Um, I'll talk about the rising costs of San Egan so much.

Now, I, you know, if you guys can find a political will to make it happen, it will really help a lot of us uh reduce the cost of living here and stay here in San Diego.

It is the no-brainer.

Now we don't really need a study to do it, but now you have a study.

Can you please move forward with it?

That would be great.

Thank you.

Caller with the last four digits 8813.

Please begin.

Okay, so if I'm full here, yeah, it's unbelievable that people still have confidence that this board will do the right thing when the record of uh ignoring the people's wishes and needs are like it's I mean proof of the pudding people, honestly, to the people who are awake to what SDGE and the Monopoly have.

They have so much of our money and keep asking for more.

But you realize that this board you're addressing does the same exact thing.

Honestly, from Sandeg to the county to this board.

I mean all these corrupt government agencies.

They'll take for they will take from us, and you know, whatever benefits them.

But I just wish you know, more people were awake to that, and it's uh it's amazing.

You can't address SPG and E without also addressing the corruption of this very board.

All I gotta say.

Done.

Thank you.

Evan Burke, please begin.

Hello.

I want to speak in favor of public power.

Uh first, there is no benefit to a private monopoly like SDGE.

There's no need to even pretend to lower costs with no competition.

Meanwhile, their insanely high power costs make our cost of living more expensive and contribute to issues like homelessness.

Uh, I find the fear-mongering that I've heard outrageous.

We hear that we don't have enough data, but what more data do we need when dozens of other cities have already done this and succeeded?

Uh we were warned that San Diegans will have to pay new costs like insurance premiums, but San Diegans are already paying those costs and more whenever SCG and E turns a profit.

The definition of madness is doing the same thing over and over again and expecting a different result.

We've seen what SCG and E can do and will do, and now's the time to try something different.

Uh I urge us to move forward with public power.

Thank you.

Thank you, Natalie Ratchi.

Please begin.

Hi, can you Natalie Rashki here?

Um, I'm district seven.

I want to bring council's attention to one number that explains a lot of what's happening with our electric bills.

The CPUC just authorized SDGE a return on equity of nearly 10% for 2026 through 2028.

That's the profit percentage SIMPRA's shareholders earn not on selling as we electricity, but on infrastructure spending itself.

The more SDG and E spends on polls, wires, and upgrades, the more profit profit it earns because the return is applied to the entire rate base.

Independent economics at the American Economic Liberties Project testified that their fair return based on current market conditions would be closer to six percent.

The gap between that and what was actually authorized comes out to 4.4 billion in overcharges in 2026 alone across California's major utilities.

This is exactly why the city's own public power um study found that manusp manipulation.

Next speaker is Jordan Lewis, please begin.

Hi.

Uh my name is Katherine Mock.

I'm a resident of San Diego, San Diego County in North County, and I'm an SDGE customer, and I support acquiring SDGE infrastructure and converting it to a publicly owned power utility.

Particularly for concerns like affordability and transitioning to uh zero emission utilities.

Well, it's expensive to acquire and manage a utility, and that cost will be footed by us ratepayers.

We're already footing the bill for SDGE.

And on top of that, as others have pointed out, we're paying the additional cost of a for-profit entity, including the hundreds of millions in profits each year that SDGE makes, as well as the 22.2 million total compensation for Jeffrey Martin, SEMPRA CEO, that was last year's number.

So for these reasons, I fully support advancing a publicly owned utility for San Diego.

Please continue this effort, do what you can to reduce the uncertainty, incorporate the concerns of some of the folks who spoke in opposition today, and complete the transition to public power.

Thank you.

Thank you.

Next speaker is a caller with last four digits, 8700.

Please begin.

Yes, I support public power, also known as power of the people.

Here are my reasons.

Number one, all of you using the power of your voice today.

Number two, trusting that all of us will do a thorough analysis of its feasibility.

Number three, keeping an eye on San Francisco as a public power model.

This is a golden opportunity for creative action outside the box of SDG and E.

It's been a great item.

Thank you, everybody, and love to all.

Thank you.

Our next speaker is a caller with the last four digits 2265.

Please begin.

Hi, I'm Diego.

I live in Kensington.

Um over the last five years, San Diego Gas and Electric has profited an average more than 800 million dollars per year.

At the same time, nearly one in five San Diegans cannot afford to pay their utility bills.

And just last week, they requested a rate increase of 8.6% at the CPUC.

This would mean an increase of over 22 million, uh $22 a month on top of the already high utility rates we are paying.

The public the public power feasibility study shows public power is possible, feasible, and cheaper for San Diegans.

The time for public power is now.

Thank you.

Thank you.

Our final speaker, Sonar of Alaska, please begin.

Hi.

So I'm a resident of District 2.

Natural monopolies like utilities should not be owned by for-profit entities because without competition, consumers will always be squeezed for profit.

It was a mistake to have ever allowed power to be privately owned.

If the power had been publicly owned, the electrical expertise and the good union jobs would have always been available through a public entity.

It will never be a good time to unwind this mistake, but it needs to be done.

We understand the fear of uncertainty facing union members, but there is no better union employer than public agencies.

As you have pointed out, your expertise and skill will still be needed.

And yes, there will be a reshuffling of jobs, but the jobs would not go away.

We hear the argument we don't have enough information, but isn't this what the council is considering?

A feasibility study to gather more information.

We want the council to have all the information possible to make a decision on this issue.

We cannot be afraid of this knowledge.

Thank you.

Thank you.

That does conclude public comment on item 200.

Thank you.

Alright, thank you, Deputy Clerk.

Let's take a moment and thank Kevin.

This is his first big meeting sitting there in the chair.

So well done, sir.

And to your entire team because the way that you organized all those slips, truly, truly impressive.

I'll just give a personal thanks to everybody that showed up and a special shout out to those who showed up just to give time to somebody else to speak.

Greatly appreciate that.

So with that, we will turn it over to the council members for questions and comments, and we'll start with the chair of the environment committee, council member Ilo Rivera.

Alright, thank you, Council President.

Uh, thanks for uh the report.

Obviously, we had uh this conversation at Environment Committee.

Uh, this is a continuation uh of that.

And um I think the the additional public participation is useful because it highlighted to me what I think is is probably the most important component of this.

And with very few exceptions, almost every comment we heard today came from one of two groups: either the blue-collar workers who who keep the grid running or residents who are breaking under the weight of their bills.

That's working people fighting to make rent, fighting to keep the lights on, and fighting each other over scraps, because that's exactly what a rigged economy does.

It doesn't just take people's money, it turns neighbors against each other, workers against ratepayers in a fight over who absorbs the pain, while the people who actually rig the game kick their feet up and enjoy the show from the other side of the table.

So who's doing that?

STGE and SEMPRA.

It's a set of millionaire executives who will go home tonight to a financial reality that no one who testified here today can even imagine, let alone enjoy.

So while San Diegans are fighting each other over scraps, executives sit fat and happy and join in the fruits of their victories.

We should put some numbers to that because I think that's important.

Semper CEO Jeff Martin took home a compensation package worth 22.2 million dollars in 2025.

It made him the fourth highest paid energy executive in the country.

An average California worker would have to work for 236 years to earn what Martin made in a single year.

236 years.

That's not poor people, that's the average California worker.

And that's the gap between the people who keep the grid running and the man at the top of the company who owns it.

And I think there's something really important about why it's so important to continue this conversation.

I understand I understand the anxiety that it creates for the workers who are impacted by the conversation, but I want to explain why it's been important to keep this conversation going.

Because despite this conversation going, despite a feasibility report that says that this is feasible, despite a growing movement of San Diegans who are organizing to fire SDGE, SDGE still filed for another rate increase.

8.6% on the average monthly bill.

That's an extra 2250 a month, while all of that scrutiny is happening.

They're not pausing to read the room, they're not questioning whether or not they should slow down, they're just keep at it.

Increase after increase after increase.

And the message that that sends to us is that they don't think we have the nerve to have an honest conversation about alternatives.

So I think we have a responsibility to know what our options are and ensure the public knows the pros and cons of those options.

According to the most recent electorate rates report by the California Public Advocates Office, over the past 10 years, SGGE's residential rates have risen 98%.

And every single cent that IBEW local 465 members have earned in that same period, they've had to fight for.

Every contract, grievance after grievance, nothing handed to you.

Earlier this year, SDGE, or the end of last year, SDG went after a small group of workers' right to even hold a union election, hiring the most notorious union busting law firm in America, and tried to take advantage of a paralyzed federal labor board to run out the clock on that vote.

And if it wasn't for the work of the union, they would have been successful.

It went to a company that will spend resources fighting just a handful of its own employees' rights to organize while asking the rest of us for another 8.6%.

So I want to make sure we're really clear about what we're up against and who we're standing with.

Ms.

Mendoza, I appreciated what you said.

We can work together.

Nobody wants to fire the workers who built the grid and keep it running.

The conversation is about what our options are instead of the status quo because the status quo does not work.

The status quo allows a CEO to earn 236 years worth an average worker's salary in a single year, fights its union over a handful of jobs, and squeezes ratepayers for a 98% rate increase, all while there's a conversation happening about what our options are.

So that context is incredibly important.

I appreciate the conversation here today, and I again just want to reiterate why I think it's so important for us to keep having it.

There were a lot of important points made in today's conversation about the way that everyone feels these impacts, about the way the city feels the rising costs, the way it has a domino effect in terms of cost of living, and we have this responsibility.

Last time I asked about Long Island and the hybrid model that they've pursued.

Have you done any additional research on that?

Any additional analysis?

Um we did look into it.

Uh generally, council member.

Um I think the important thing to remember about Long Island.

So you are right that the Long Island Power Authority, LIPA, then has a relationship with the actual utility operator.

The issue is that because Long Island and New England and most of the East Coast, frankly, is in a deregulated environment, so it automatically splits kind of commodity, and then you've got a lot of competing distributors.

They are overseen still by the state Department of Energy and Electricity Resources.

And so you still have a state level regulatory body that oversees that specific contract.

And there are conversations going on on updates on that contract that are coming up in the next several years.

If there is continued interest in deep diving here, we can, but there's no equivalent model in a in what was a bundled or a semi-unregulated environment like California and some of the other larger states have.

Gotta appreciate that.

The general idea though is the workers don't have to be displaced from their current place of work, they continue to do the work that they do for who they do it.

What changes is that company is now working for the city or the municipality instead, if I understand the model correctly.

Yes, generally.

In this case, in that instance, you're talking about us contracting out to SDGE so that that and how different that is from say either the workers' contract under that with that system versus another, and how different, say the revenue or model is versus other areas where that utility operates separately.

Got it, okay.

Um again, just in in terms of us understanding options, the pros and cons of those options, hearing what are the main sources of anxiety that matter to me here, which is uh hard working people not being displaced from their jobs, not having their jobs placed at risk, um, and that's seeming to be a thing that was worked through in that model while also significantly reducing management costs.

Um it just seems like a thing that we should know as a potential tool in the tool belt.

Um, I'll just end with this, Council President.

Uh, I'm glad we're having this conversation.

I think it's important, and um I appreciate uh Nate, your comments.

The reality is is that this is, I don't know that there's a single issue where I heard more have heard more agreement amongst folks from different sides of the political spectrum.

We had some of the most conservative folks who engage with the council and some of the furthest to the left who are in complete agreement that what is what we are currently operating under is unsustainable and unacceptable.

And if that doesn't show that the dam is starting to break, that San Diegans are sick and tired of paying so much for their utility bills, I don't know what will, and it's that's why it's incumbent upon us to continue this conversation, continue the work so that we know what options we have to both protect workers and protect ratepayers.

Thank you, Council President.

All right.

Thank you, Council Member Ilo Rivera.

And as a reminder, this is an information item, and no motion is required.

And I'm going to jump in at this point.

So I want to start out by thanking Heather General Services team, Randy Wilde and the mayor's office and the teams at New Gen and BBA for this work.

And of course, thank you to every member of the public who showed up speaking on all sides of the issue and those who called in.

Phase two report was an equally impressive undertaking as phase one and provided greater detail and clarity on a proposal that is massive in scale and as complex as anything we would undertake at the city.

That does not mean we should shy away.

We can and will do big things.

And when financial impacts on residents and businesses are on the table, we must be bold.

I will start by highlighting the opening slide.

A municipal energy utility is both economically feasible and technically feasible.

That is what the city set out to determine, and should we decide to proceed, there is a path forward.

Of course, that comes with risks that must be weighed and assumptions that must be tested, and we will have to find the right balance.

And whether you feel the study has been too conservative in its projections or it may take longer than initially anticipated, a municipal energy utility remains feasible.

And since the outset onset of exploring public power, and when I voted against the current electric and gas franchises in 2021, I have talked about the limited options we have as a city.

But just as we fought for in the creation of the San Diego Community Power and giving customers options, it would be irresponsible of us not to pursue alternatives to our energy distribution system.

Today's presentation, as we've heard, coincidentally, perhaps prophetically, comes just days after SDG's latest general rate case submitted to the CPUC.

And as we've heard from members of the public, SDG's own projections are substantially higher than the average annual increase assumed by the consultants in the study.

As an engineer, I appreciate that conservatism.

Moving forward with this process demonstrates our commitment to not sitting back, not accepting the status quo, nor remaining vulnerable to a monopoly, but rather exploring all options to provide more affordable rates.

Keeping our options open and continuing to pursue a municipal energy utility is in everyone's best interest.

So for those of you who oppose this conversation, look into the faces who can't afford, but don't qualify for subsidies on their electric bill.

And for those of you who support, look into the faces of the workers who are wondering whether they will still have a long-term career in their chosen profession.

And a promise today is not necessarily a promise that will be kept.

The two sides of the conversation.

For those who oppose municipality, the question I ask you is what are you doing to join the city in its our efforts to control rates, to control the impact or reduce the impact that is hitting so many San Diegans.

And if those who spoke that were prior here at City Hall, let me remind you you let a 50-year franchise expire with no game plan to give our city options or help control rates.

We missed a golden opportunity, and 2021 became a very awkward year to realize we had no place to go.

And a franchise had to be signed to keep the wheels turning, so to speak.

So this is a difficult conversation.

I agree with Councilmember Ilo Rivera.

We should keep our options open.

We should continue to pursue a municipal energy utility because it's in everyone's best interest.

And until we have SDG come to the table, pull that general rate increase, and have the conversation as one member of the public, I'm not going to name, he knows who he is, and he pleasantly surprised me today, and have a real conversation about how we relook at rates, knowing as some of you have said that the CPUC is not going to save us.

And as a reminder, CPC doesn't guarantee profits.

They set a profit rate to set the rates.

And when a one investor owned utility exceeds those profit rates year after year after year, something has to change.

We have to protect our most vulnerable individuals who can't afford what should be a right of affordable electricity going forward.

So that's where we stand today.

I agree that we have to keep this on the table going forward.

And again, thank you for the good work in this phase two study.

With that, again, this is an information item, no motions required.

We'll turn to Council Member Campbell, the third member of the environment committee.

Thank you so much, Council President.

When first elected, uh, and thank you for the presentation, and thanks to the public for all of your input.

It's agreed with and appreciated on all sides.

This is a really complicated issue.

And uh I want to say that when I was first elected to council, I was appointed chair of the environment committee.

That was January 2019.

First thing I did was lead the effort to create community choice aggregation.

In other words, what became San Diego Community Power.

This now includes six cities and our county government, which means our unincorporated areas.

One of the goals was to provide cleaner energy options to reduce the effects of climate change.

It also gave our communities more local control over how we purchase energy, and at that time the city commissioned the first feasibility study on municipalizing our energy utilities, gas and electric.

And since then we have completed two more studies and spent millions of dollars on consultants to tell us about municipalization, millions of dollars we could use this year in our budget or any year in our budget.

The findings have always been clear.

That was the first study.

That was seven years ago, it's probably 16 billion now, and that was just for the infrastructure needed.

The city cannot afford this.

That estimate does not include additional costs, staffing, operations, and onboarding, the impact of exit fees on the other 17 cities that rely on SDG and E system and would expect us to pay them the difference.

Or the fact that we still would need to use SDGE for the gas component.

So this study was only about electricity, not the G part of SDG and E.

After three studies, we do not need more analysis.

We already have the information we need to decide at this point.

It is too expensive to continue to spend millions of dollars on consultants.

It is way too expensive for the billions that the city would have to spend to try to provide this utility.

It says right there in the law is main responsibility is to protect ratepayers and also decide utility rates in so doing to protect ratepayers.

They're supposed to protect us.

They don't.

It's supposed to decide utility rates within mind us consumers.

The PUC needs to be reformed.

It needs to be held accountable.

And I ask you to please inundate them with emails, phone calls, and letters that they need to lower SDGE rates, not raise them.

Forming San Diego Community Power was a good idea.

And SDGE was in favor.

And you may be wondering why.

Why would they have been in favor?

Because commercial utilities are not allowed to make a profit on what it costs them to buy the power to make electricity.

And so they handed this off gladly to San Diego Community Power.

Do you know that 95% of electric customers have signed up for San Diego Community Power?

That's a good thing.

It's been very successful.

It has millions of dollars in its reserve.

The question is, why have they not lowered their rates?

We need to have them come in and answer that for us.

Meantime, we need to stop spending on consultant reports.

I think this last one was three million dollars.

It's ridiculous.

It's going to come out the same every time.

It's very, very expensive.

And the city has a hundred and a hundred million dollar deficit, it can't even meet.

And we're supposed to spend eight billion, eight billion, sixty billion to become an electric company.

No, no, no.

That doesn't make any sense at all.

We cannot afford to be a power company.

In the meantime, SDGE's top executives and those of many other corporations in this nation need to decide how many millions of dollars a year do they need to live on.

This is ridiculous.

Just as my colleague, council member Eli Rivera said, the guy in 2025 made 25 million dollars a year.

That's ridiculous.

Think if he only made a couple of million dollars a year.

How many rates could be lowered?

Quite a few, quite a few.

And so I say to all the top executives of the corporations in this nation how much money do you really need?

At the cost of making your consumers poor.

Stop practicing it.

Thank you, Council President.

All right, thank you, Councilman Campbell.

We'll go to next to Councilmember Von Wolford.

Thank you very much for your work today and for the presentation.

Thank you for everyone who's come in today to express uh very justified frustration over the fact that STG and the ability continue to go up, including our own workers who also don't want to pay debt.

Um and I want to thank the workers who came in, especially our veterans who served in Iraq and Afghanistan.

I can't imagine what you've seen.

You know, this past Memorial Day, we just did uh memorial um commemorations only for folks who died in the Afghanistan and Iraqi wars because they were our generation.

And so just know uh that you have sacrificed a lot in coming in and getting training from IBEW, which is one of the most incredible veterans transition employers in this country, is fantastic.

And I want to thank you for continuing to do that work.

So know that we up here care about you, we care about union workers, and I'm gonna show you why what we're gonna do.

Um I also want to thank the environmentalists who came in, San Diego 350 and everyone who's been uh trying to take away the monopoly power of this company as we should.

Our public power should not be a monopoly.

We should not be paying 22 million dollars alone to the CEO Jeffrey Martin of SEPRA last year.

We just shouldn't.

None of us have a choice about whether or not we pay SDGD to keep our power on.

But I want everyone who's in the room, all the union workers especially, or anyone who works at a job to pay attention to this.

This is a public website from the Office of Labor Management Standards, it's um under the Department of Labor.

You can check this website to see if your employer is paying union busters for the most part.

We'll get to Jackson Lewis.

Go to the next slide, please.

We did check this website when we had to renew the franchise agreement.

As Council President LaCava said, when we all got elected up here, we were forced with this renewal for SDGE.

Our predecessors didn't do anything about it and left it in our laps.

This is a form LN10 report.

You can see it's highlighted, it's from SCG and E, Stanio Gas and Electric from 2019.

Please go to the next slide.

This is a public report they have to show if they're gonna hire union busters that are public-facing.

In 2019, STGE paid tens of thousands of dollars of our ratepayer money to hire crews and associates to be their independent labor consultant who is known nationwide to be one of the biggest union busters in the nation.

They were trying to prevent STGE from hiring uh from unionizing the call center workers.

And I know IBEW came to the call center workers' aid and made sure this didn't happen.

Go to the next slide, please.

This is the one from 2018, in which you can see crews and associates was paid.

This one I think was signed by Scott Kreider, who is now, I believe, the CEO of SDG.

They paid them 33,000 dollars to hire union busters to fight the unionized work.

So SDGE had been hiring union busters, and when they came to this dais to get a renewal, I required STG, their CEO to say they would not hire union busters again with our money, and you agreed.

I think that's the end of the slides.

You can take it down.

And so I'm really upset to see that when IBEW tried to get some of their supervisoral employees who don't actually supervise anyone into the union, which is a common union busted tactic for an employer to say they have supervisorial responsibilities, which they don't.

You hired Jackson Lewis.

But guess why you don't have to report that?

Because there's a loophole in federal law that says if you hire a lawyer to do your union busting, you can call legal services.

Congress can change this law, and I hope they do, they haven't.

Anyway, I'm sick and tired of seeing STGE crush its workers at our expense.

And I want you to know that everyone on this diet is going to work hard to make sure whatever transition happens, union jobs are protected.

You do incredibly hard work at a high voltage that none of us are trained to do, and we respect and value you for that.

And if you need me on a strike line, call me, I'll be there.

That said, I have questions.

Um, first of all, what would taking over the power structure look like or the power infrastructure look like?

Obviously, SDGE is not willing to sell their assets.

So legally, what would this city do if we were to do that?

So if we use the San Francisco model as the current California template, um, San Francisco, City County, they're all one thing.

Um, did make an offer to PGE to purchase the wires in their system, and PGA kind of didn't pick up the phone.

So San Francisco petitioned the CPUC, which regulates PGE to require PGE to establish a purchase price.

So that is, as Scott mentioned, the biggest variable about how all of this modeling and economics really works, where feasible, where your cash flow is, et cetera.

Um that is now a process that is ongoing.

The first decision came out in the fall, and that set the framework of what has to happen afterwards, which includes appraisals of the system by both party, multiple different valuations, and a basic set of principles regarding things like just compensation, etc.

So we know that that step is in there.

Um there is our current understanding, and I will, I am not a lawyer, so grain of salt, um, a high probability that at some point an action like this would probably need to go to the ballot.

And so one of the I would say the next step that moves this past feasibility, if there is interest in continuing this effort, is moves it into the kind of political regulatory legal area.

Um what that looks like really frankly is a discussion and guidance that will be given to staff from discussions between the mayor's office and council.

Randy, I don't know if you have anything to add.

I would say that uh there is not currently allocated resources to go hire more uh consultants or staff resources to go do a lot of that work in this current fiscal year.

Uh so our intention is to watch closely what happens with the San Francisco case while not exactly the same scenario as what uh would be the case in San Diego for a number of different reasons, would sort of set a lot of precedence uh in terms of the valuation methodology and the process that the city of San Diego would go through.

I think there's other decisions that would need to be made if the city were to move forward.

What would be the structure of the new entity?

Would that be a special district as recommended in the report?

What type of a special district would that be that may or may not require a ballot measure or a vote of the people, depending on how that's structured may or may not require a WAFCO component.

Again, I am also not an attorney, so we'll defer to them on that.

There's a number of different decisions that need to be made about the structure and the process, but I think the highest priority for us since this is kind of the new process established by the state is through this CPUC is to really monitor closely what happens in the San Francisco PGE case.

Okay.

I have a question, follow-up question about the district.

So I I do believe that the power system should be governed by a nonprofit.

I do not believe the city of San Diego as a municipal corporation is ready to take this on.

We can barely operate a water department.

We are struggling to figure out if we can deploy our own ambulance system if we have to bring that in-house.

But I do believe there's another opportunity, and that is what uh Sacramento did with SMUD, the Sacramento Municipal Utility District.

And this is what I hope the advocates listen to.

I will the city of San Diego couldn't even get a sales tax pass last year because voters didn't trust us.

I think the better option is not to saddle this on the city.

The better option is to create a public utility district, which is run by experts.

And but the only way anyone would vote for this, the only way I would vote for this, is if there was concrete union protections for our union workers, and they should have a role in the ballot measure if it were ever to get to that point.

Um, because there's no way I would throw our workers under the bus.

And we need our workers to provide the power we need anyway.

So, how would that process look like?

As Randy mentioned, the special district process looks different depending on one or multiple parties going after it.

This is all kind of outlined in California Public Utilities Code.

Um, so various structures require votes by council and then going to the ballot.

Some of them it can be go to the ballot directly, so a lot of it is the structure that is put in place, and therefore the special district is defined by public utility code.

I'm happy to follow up with you with those specific areas of law.

I do not want to even attempt to quote them off the cuff.

Yeah, sounds like a LAFCO question.

Understood.

Um another question about this valuation.

I have a feeling it's gonna be much higher than what's even the $7 billion.

Just because you know, I don't think SGGE would willingly sell its assets, which means it would go to some kind of eminent domain foreclosure.

I don't know, and that would be litigated every step of the way, which would increase the cost exponentially.

So just I have a feeling that's what's gonna happen in San Francisco, but we'll see.

Um, the one thing I do give STGE credit for every time we're here is the wildfire work they are doing.

I mean, I wish the Witch Creek fire had not had to happen to have that led down that path, but the emergency operations center that SDGE has stood up is state of the art.

It's incredible, it's catching fires left and right, and I appreciate the fact that they've also invested in wildfire attack helicopters.

So, does this study also encapsulate the cost of taking over the emergency operation center?

Because we cannot take over utility if we're not going to protect us from wildfires.

It doesn't because the vast majority of the area that the EOC monitors is not within the city of San Diego.

It does imagine a portion of the cost that currently are expended within wildfire mitigation as a part of the overall operating cost and thus revenue requirement for the utility, as well as pieces of, you know, there's uh someone mentioned liability, so there's liability insurance, et cetera.

So that would that would need to be carried for those areas that are subject to it.

But again, I think it's remembering that if you're separating out the system, what now there also then would need to be coordination between the two, and that kind of goes to that just compensation piece of how much has already been paid for by San Diego ratepayers, how much would therefore need to be, and some of that is also subject to, you know, the CPUC, as was mentioned, SDGE makes a revenue request specifically within the wildfire mitigation fund that includes the cost of operation of that.

The CPUC then decides how much of that can and cannot be rate-based or should or should not be expended.

Um so what role say the municipal utility in an area that is definitely at risk because of fires in not its territory, pays and plays in the operations to ensure that those fires don't get anywhere near the territory, would all be part of the negotiations between the parties.

So the feasibility study incorporates um modeled costs for that, but it doesn't outline for a whole bunch of reasons how specifically those negotiations would go because simply we can't speak for the other side of the table.

Okay, got it.

But that would be something that's incredibly important that needs to be thought about.

Absolutely.

Yeah, I wish the CPUC would require every utility to do something similar so we'd stop lighting wildfires over now the state.

Uh, but there's many things I wish the CPUC would do.

Um, okay, and my last my colleagues have covered a lot of this.

I mean, what about the fact that there's an 8.6% request for a rate hike and the feasibility study had anticipated four per year?

You know, what does this large hike that SCGD wants to add to our bills once again do to the feasibility study?

Sure.

So I think some of the things to remember is over a 30-year horizon, we specifically picked 4%.

One because historically in the past two GRCs, that's approximately been the end decision.

So SDGE usually asks for more money and then it gets cut down through the GRC process.

Um fundamentally, if you look at that sensitivity graph, the higher the rate increase annually for SDGE, the more cumulative benefit there would be for a utility that is only rate-basing its revenue requirements, right?

And so you can kind of say if their rates are significantly higher, then they're saying their revenue requirement is significantly higher than the MOU.

That's what that distinction is.

Um because this is just their proposal, we don't know what the CPUC is going to decide, and because it is frankly only a four-year picture, and we're trying to do a 30-year model, um, providing a conservative estimate is gives us a and it's still feasible at 4%, then at 6%, it is also feasible from an economic perspective.

At 8%, it is still feasible from an economic perspective.

So it's 8% increase in 20%.

I'm sorry, it's overall on the system, it's actually a 5% increase in FY28, or sorry, in 2028 from 2027 rates.

So we haven't seen those yet.

2028 is 8.5%, and then 20% sorry, 2029 is 8.5%, and then 2030 and 2031 are about 5.5%.

So again, we're trying to blend out a 30-year annual rate increase in order to make those numbers line up accurately and ensure when we say it's economically feasible, you're doing that with a responsibly conservative number on the SDGE side.

So you're not over-promising savings that may or may not manifest.

Okay.

Understood.

Thank you.

Well, thank you for the update.

Thank you for going down this incredibly complex study in what we're trying to do to at least give the city and the residents who live here some kind of negotiating power over SDGE.

You know, it's very hard to do that when it's a monopoly.

But it has to include protections for our workers who work very hard to make sure the lights in the gas are literally turned on every day.

And it needs to account for the catastrophic litigation costs that are going to come with trying to separate from this.

But again, that's why I think a utility district would be better to take this on in the city of San Diego itself, because that that could be a fight they could fight the city as a co I don't think we can do this on our own.

Um, and as STGNE needs to charge lower rates.

We have no ability to handle that here at the City of San Diego because under California state law, it is Sacramento that decides how and when SDD charges its rates.

However, in the next few years of 20 uh 2030, our franchise agreement could be opened up again by the future city council who sits here.

I will be termed out, many of us will be termed out.

But we are trying to do is make sure that in 2030, if the future council wants to put the pressure on SCGE to lower rates, they will now be able to do that because of the work we're doing going down this road with the public power feasibility study, and we need to continue to strengthen our hand to lower rates for SDG because they charge too much.

Thank you.

Alright, thank you, Councilmember Von Wolper.

We'll go next to Councilmember Whitburn.

Thank you, Council President.

Uh, first of all, thank you to everybody who provided uh uh public comment this afternoon.

I took a lot of notes.

Very interesting comments uh from everybody here appreciated that.

I have a few questions for our consultant.

Um there is it says uh the potential for average customer savings of five hundred dollars a year, or for which would equate to about four forty-two dollars above toward the end of the 30-year study period.

Is that in today's dollars?

Uh 30 years from now, $42 may not seem like that much.

So are we saying the potential savings then would be the equivalent of what $42 a month is today, or would it be $42 30 years from now?

To the extent the analysis is looking at a sort of average bill, it would be in today's dollars.

We're looking at the percentage that we're proposing or was projected to be relative to the savings.

Um looking at the flip side, uh you talk about the risk.

Um, what would be the worst-case scenario if things went south in terms in real terms?

What bad things could happen to the city?

Um in terms of what bad things, I mean, you know, who knows, right?

I mean, it you could say that that I mean, uh that's a good I don't really know to tell you the truth.

What bad things could happen is that is that the you know the utility uh could incur you know costs like any other of utility incurred costs and and have to pass those costs on to a ratepayer, right?

Just in terms of commodity cost or in terms of um all the costs that it takes to operate a utility.

There's there's always a potential that those costs could exceed beyond what anybody could imagine, and then in which case those costs would have to be recovered by ratepayers.

Okay, so essentially you're not seeing a lot of financial risk for the city as a municipal entity in and of itself.

You would see the financial risk as being contained within the utility uh structure.

Okay.

Um you've prepared a 200-page report and an analysis on the feasibility based on what you know and your expertise.

Do you think that San Diego should go to a municipal utility?

I believe the report suggests that it's financially feasible to do so.

Okay.

Um I will turn now to the Office of the Independent Budget Analyst.

Uh Mr.

Moore, your thoughts on this.

My thoughts on this are many.

So I will tell you what I've been telling.

So leading up to this meeting, I've had many meetings.

I've met with general services.

I've met with Public Power San Diego.

I've met with San Diego Gas and Electric.

And I've pulled all three entities the same thing.

We've had three studies.

They're all directionally pointing the same direction, which is yeah, it's most likely economically feasible.

The questions that are still being raised, how much is it gonna cost?

What's the reunion protections going to look like, those types of things?

Another study is not gonna tell you because they're all things that need to be worked out either through the CPUC proceeding or somebody writing down on a ballot measure.

What is this thing gonna look like?

What's its structure going to be, and how is it going to operate, and then sending that ballot measure to the people for a decision.

So at this point, I think the study is sound, it's as sound as it can be, it's showing a path that could be taken with known risks, and at this point, as Heather kind of alluded to earlier, it's now a policy decision on what do people want to do?

How would you want to frame it, and how would you want to craft if you want to craft a ballot measure?

How is that going to look?

That will start answering a lot of the questions that are here today, but again, it's kind of going above the staff pay grade of you know what they can answer for you.

Okay, that's helpful.

Um thank you, Council President.

All right, thank you, Councilmember Whitburn.

Uh, we'll go next to Councilmember Campio.

Thank you very much, uh Council President, and thank you to the public for your participation today.

Um obviously a very big conversation for our city talking about over 10 billion dollars in one way or another uh in cost and potentially more than that in savings.

Um I want to get to the heart of some key questions that keep coming up, and this is it's not very often we have both sides of uh the debate here to be able to answer them.

I think the first thing I want to point out is that we're not gonna get anywhere without our workers uh be who repair the lines and make sure our energy gets to our hospital schools and homes are taken care of and that their jobs are protected because there's just too many livelihoods at risk to make sure that they uh don't can don't get to continue their careers, uh have their retirements protected and their families uh cared for.

Um the representative from SGGE would come to answer a few questions just very directly.

Thank you, Miss Cs.

Thank you for being here.

Um, given the report that's in front of us, just very explicitly and directly, what is the issue that you believe makes whether it's municipalization or a nonprofit utility, which are are very close to the same um in this debate.

What's what do you think is the most risky part of that plan?

Sure.

I think the riskiest part of the plan is the cost.

I don't think this report captures the full cost to acquire our assets, and as I was talking about the exit fee to make other customers whole.

So if you even take the nine billion just to acquire the assets, uh separate the system, and then ensure that the other cities in our territory, Chula Vista, Imperial Beach, Alcajon, Escondido, Carlsbad, don't see a significant rate increase when the city leaves, the city of San Diego would have to pay a significant fee to ensure that that doesn't happen.

That would be billions of dollars.

So you're taking an asset of uh to purchase the assets of 9.3 billion dollars, and then several billion dollars on top of that.

The feasibility study itself says that at seven and a half billion dollars, there will be a rate increase for the first 12 years.

Then at some point, rates kind of flatten out, and in 30 years there's a very de minimis decrease in rates.

I think there's things that we could be doing right now to reduce rates that we'd love to work with the city council on.

I think I've talked to many of your offices about this.

Almost 30% of our bills are made up of state mandates, and we would love to work with the city, the city council.

We're happy to come in to talk to you.

Let's work at this at Sacramento and take these cost ineffective things out of our bills, would immediately uh reduce bills January 1st.

Okay, thank you.

Hold tight.

From Public Power San Diego, uh the issue of um the cost, the when I looked at the spreadsheet, realizing that 4% was the, well, from our staff, 4% was the assumed increase in electrical rates annually, right?

And we've seen far higher than that in the last 10 years, right?

Almost a doubling in 13 years, 14 years, something like that, correct?

Generally speaking, yes.

Okay, so the cost of the system relative to the cost to the ratepayers that we're seeing.

Someone from Public Power San Diego would would you address that issue related to the disassociation cost that we're gonna have to pay to the other municipalities?

Because um, I know that one model of this is to not take over the transmission, it's only to take over the distribution.

Um what's your response to what Miss C's just said about that fee we'd have to pay other cities?

Well, there is no fee yet that we might pay.

I think I would side with I think Heather's comment that all of this would be a negotiation.

We don't know where that's gonna land.

We talked about how much fire uh exposure we have as a city, that would be it's partly in the model already.

But this idea that there are billions pending that we would have to pay is based on nothing at this point.

That would be something we would discuss, but keep in mind the electrical workers would stay.

I just wanted you to focus on that part portion that she brought up.

I know there's lots of components that have been brought up today, but you're telling me we just don't know what that true cost to dissociate would be, or would there be no cost if we just did distribution instead of taking over transmission lines?

Well, the beauty of doing distribution only is we would have no LAFCO exposure, so we wouldn't have years of delay to to look at this, but it's important to know that those electrical workers would be maintaining and operating the system in San Diego.

Those costs wouldn't be costs that other cities would bear.

We would bear our own cost.

So it's very much to be negotiated.

What additional costs might we might have to bear in as well?

Okay, one second.

Given that our business manager for these workers is here in the room, Mr.

Fairman.

Can I ask you a quick question related to that component of this potential model would impact your workers?

Because you guys work on all the electrical lines.

Um, we're doing it.

I'm I'm here with name.

Okay.

Um thank you for being here, Nate.

Uh the transmission versus distribution concept here, the transmission lines cross municipal boundaries that I understood could open us up to a price we'd have to pay other municipalities.

If we just did distribution, how many workers of that would it impact that you represent?

Uh I would say anywhere from 100 to 200 directly, but then you're reducing the size of the primary group at SDGE.

So you're lowering their bargaining strength indirectly, about 1,800, directly about one to 200.

Okay, understood.

So Ms.

C's, if we did a distribution model as opposed to taking over any transmission lines, would we still be exposed to those cut-off fees or or exit fees, please?

Absolutely.

If you're taking out a portion of our system and a portion of our customers, those costs that are fixed costs are still going to need to be spread across the remaining customers, and now you no longer have the city of San Diego as part of that uh as part of those customers paying for those other costs.

So absolutely.

If you separate the distribution cost out, the remaining customers will still see an increased cost.

Okay.

Transmission is where SDGE makes its profit, correct?

I don't understand.

So well, generation of the energy, you have to sell it at the value it costs you to do this.

There's no profit on the actual creation of it.

Correct.

The profit margin comes from the transmission cost from where it's generated out to the customers, correct?

Well, the profit comes from both the distribution and the transmission.

Okay.

So it's from our infrastructure that we built.

Everything from that batteries, transmission lines, distribution lines, it's the entire infrastructure system.

Okay.

I guess the question as it relates to the economics of this is the transmission crosses multiple cities, maybe even multiple counties, right?

Absolutely.

Okay.

So there's a profit that's built into that component that goes to the entire system.

But after it gets to the distribution hub, say in Sarah Mesa in my district, and down to the homes, then there's a different profit component that's part of that, correct?

Yes.

It's the same concept though.

Okay.

When the infrastructure is built, we are making the profit on building the infrastructure, whether it's transmission or distribution.

Okay.

I guess I'm wondering is why would we have to pay an exit fee after the energy already crosses into the city of San Diego to a distribution center?

And then so we'd have to pay to La Masons and uh people from Poway and other cities when it it's crossed over the line.

It's now in the city, and then the utility, the nonprofit utility would ostensibly take control of it at that point.

SDGE would still be making a profit from the transmission, and at that point it's not really affecting La Masons and folks from Poway, would it?

Right, but there's fixed costs.

Well you just said right.

Well, I'm sorry, don't catch me.

I'll explain it.

There are fixed costs across the entire system.

We don't build our system, including the distribution system, city boundaries only.

We don't say we're building it out for La Mesa, done.

Now let's do another footprint in San Diego.

So the distribution system also crosses the borders.

So just cutting it off, there's still fixed costs that go both ways and sort of to serve the system as a whole.

So you're taking out customers out of the city of San Diego out of the system, and there are still fixed costs that will be part of the distribution and transmission system that would then be shouldered by the remaining customers, no longer the customers from the city uh city of San Diego.

But if a transmission line crosses from some other county or part of the part of the county into our city, and we've disassociated from the ecosystem, as you're pointing out, it doesn't seem to me that LaMasons would pay for any component of it getting to the distribution center and on.

And we'd be buying the distribution center from you at that point.

So are we paying for LaMasons and people in Powways?

I see, Ms.

Warner, you're you're nodding your head.

Clear this up for me, because it seems to me that once it crosses into our city, gets to a place that the public utility would have purchased it.

Um I understand the fixed cost component, but if we've bought it from S D G E and it's being owned publicly, why would there be a further fixed cost to it?

Okay, so let me come at this slightly differently in the math so that it might be a little clearer.

So the first thing to understand is when we talk about distribution assets in the report, those include specifically the vast majority of the distribution, sorry, the transmission asset that we speak about are the substations, and that's the point of step down.

Those are often um, and you want those the reason they're included in the study is because you want them both for the ability to manage the system and then plan for future growth.

So that the oversimplified example I can give here is buying just the distribution system is like buying the pipes but not the pump station for water.

So that's kind of that I just want to address kind of the there's a reason that we didn't do a distribution only kind of presentation in the report.

From the just compensation standpoint, yes, so we know from the information that's in the report that about 10% give or take of the physical assets of SDGE within the city of San Diego are fully depreciated.

One of the reasons those cost boundaries are so large compared to phase one is because there's a significantly larger component of the assets that are old.

And a lot of that is because the vast majority of rapair funds in the last five to ten years of all of SDGE's territory have been toward wildfire mitigation.

That's been approved at the CPC, and to Councilmember Von Wilpert's point, we have benefited from that as a city.

But we're also paying for it.

We are 10 years.

And every other municipality is paying for it.

So 10 years ago, the city of San Diego ratepayers made up approximately 40% of SDGE's total revenue.

Since we've now seen growth in houses and industry, etc.

in the greater San Diego region, we're now down to about 35% of their revenue.

So the issue of just compensation in a hypothetical simply says, okay, you are going to remove 35% of revenue, 660,000 customers from the overall territory.

If you do that, that means that, and and again, we don't put this number in the feasibility study because you can kind of pick any number to put in, that whatever investments SDGE continues to make from that division, from the point of that division, are only going to be applied to the rest of the excuse me, the rest of the system.

So right now, yes, depending on which year and what you're talking about, city of San Diego ratepayers, most of the urban ratepayers, frankly, not just within the city, are subsidizing investments in the physical system outside the city.

If those physical investments continue and are seen to be beneficial to the whole area, including a new city MEU, then there is a just compensation problem that all of those costs should not be borne by the remaining SDGE ratepayers if there is still benefit to the new city of San Diego ratepayers.

And that's the just compensation conversation and part of the ongoing kind of proceeding with San Francisco and PGE.

They have a very different calculation, both because of PGE's lack of investment into wildfire and the size of San Francisco as it relates to the larger PGE system.

But the exit fee fees is kind of like the PCIA when the CCA was set up.

There are contracts and fixed costs that SDGE pays or has historically paid, that the City of San Diego ratepayers still need to cover.

If you look back and say, well, we've done a whole bunch outside the city, you could argue just compensation one way.

If you say, hey, all this load growth means that we're gonna have to do a whole bunch of investment outside city boundaries, but it benefits the city, then just compensation is going to look another way.

What that range looks like and how the PUC even determines the correct way to calculate that is a vastly open question.

Okay, so let me just go back to one last material component of this problem.

My understanding is if we did a distribution only model, there would be the utility, the local public utility that we'd pay a portion of the bill to, but we wouldn't stop paying SDGE for the transmission component, would we?

Correct.

It would be like some type of you would still have to use the transmission system.

Yeah, okay, we'd still have to use the transmission system.

So we'd still be bearing the cost of the entire transmission system through that portion of a potential hypothetical bill.

So why would there be an exit fee if we'd still be paying the transmission bill?

Because of the fixed cost for the entire distribution system, which again doesn't it wasn't built city by city.

So even as you disconnect it, our system is built as a unified territory-wide South Orange County to the border, and there are fixed costs that run through that that would still need to be that are still being paid by our customers.

And so if the city was to walk away, those customers are still paying those fixed costs that have already been spent.

And so the city can't just walk away from those fixed costs across the system.

They would still be responsible.

That's what the case up in San Francisco said is you have to make the other customers whole.

And what do you think the fixed costs are?

We think it's in the billions.

Surely.

Yes.

Okay.

Can you not give me better than four to seven?

Okay, six six to eight billion dollars.

Okay.

But it's negotiable, right?

We don't think so.

And the CPUC did say that it's absolutely part of the court case, as Heather just explained, the court will actually determine it.

So, you know, I don't know exactly what that's gonna look like.

Yes, it could be some type of settlement, but ultimately the court determines what the just compensation would be to the remaining customers, so they don't see a 20 to 30% rate increase.

Okay.

Really quickly, you mentioned that you didn't do an analysis of distribution only model.

Is that you said that, right?

Just a minute ago.

The study doesn't uh provide its kind of recommendations and determination of feasibility looking at just distribution because it's not recommended for the actual long-term health purpose and a capability of any municipal utility.

But the other thing, but there is that distinction that Scott made of you're not talking high voltage crossing lines transmissions.

We have transmission line is just how big the line is.

There's a break point of what's considered a distribution line versus a transmission line.

Okay.

We have transmission lines that run between substations, both of which are within the city.

You effectively want to own all of the assets within the city boundary in order to run the system efficiently.

Sometimes you got to move power really far, and sometimes you, you know, you can just run it along the distribution lines.

That's an excellent point.

Power San Diego, that's a component that wasn't brought up that I've heard before.

The fact that within the city you have the transmission lines, and if you're looking at, if you're suggesting just a distribution-only utility public utility, how do you get around that internal transmission line?

Well, the way you get around it is those transmission and distribution substations become toll boats.

You monitor how much power is flowing off the transmission system.

You pay for that.

We pay it through transmission access charges, and that is how the system works.

Again, the first study that Nugen did was distribution only.

And so it's a choice.

Okay.

Understood.

Thank you.

Mr.

Fairman, quick question for you.

I noticed you mentioned the leverage your workers would have in negotiating a deal if a significant proportion were segregated off from the broader body that you represent.

How would it materially change the day-to-day work to have SDGE essentially handling certain components that run into the city of San Diego versus and then a public utility controlling inside the city?

I would say it's gonna be a substantial impact, especially when you start talking about breaking out the transmission and distribution infrastructure.

As a lineman who worked on these power lines in the city of San Diego for 10 years before taking this job, a lot of our transmission infrastructure has distribution under build, so it's the same exact pole, right?

So if a transmission pole has 69 KV on top, 12 KV underbuild, and then 12240 on the bottom, and a drunk driver runs into that pole and everything's on the ground.

We struggle today having to put up telecommunications lines, having to rely on spectrum, ATT, Cox Communications to come out, and then we are putting stuff up here.

Now you're just adding another layer of bureaucracy on who's gonna take the transmission, we're gonna do the transmission, you're gonna do the distribution, and then three different telecommunications companies are gonna do these other wires.

As a lineman, I'm just trying to get everything off the ground and up safe and power restored.

So you're gonna add two competing power companies trying to restore service in an emergency.

I think it would make it very complicated.

Okay, appreciate that.

I'll wrap up my comments, Council President.

I think the members of the public for getting into the deep details of just why this is so complicated, um, and being able to stand side by side at the microphone to answer the questions very directly.

Um, as kind of transparent and fact-driven comparison, I think the public expects when we're dealing with multi-billion dollar decisions and being able to hear immediately what one organization says and being able to rebut it or supplement it and ultimately hearing from the workers about how that impacts their lives.

Um, I know we have another item in 201 where I'll have some further comments, but um at the end of the day, uh, I think that the, well, I'll save my comments about the 8% profit coming up in a second.

Thank you, Council President, and thank you to members of the public for caring so much about driving rates down for electricity in San Diego.

All right, thank you, Council Member Campillo.

Uh, this is an information item.

We have a lot more work to do today.

But nevertheless, Councilmember Bon Wolfert.

Thank you.

I just one more point.

Um, first of all, the way that we can lower bills today is by making less profit for shareholders today.

Any argument that we need to get rid of the public purpose programs in the state state mandates in our bills is ridiculous.

You want us to take away the low-income assistance program in state bills.

You want us to take away the wildfire safety and mandates in state.

These are the state requirements in the bills that we pay.

That is ridiculous.

It should be SDGD's shareholder profits that are lowered today to lower our bills, not lowering health for low-income people, and it shouldn't be on the backs of cities to do that.

Second, we already pay, we, the city of San Diego, already pay for infrastructure we don't use for SDGE.

And I'm now reading about the Golden Pacific Power Link project that could go entirely around the city of San Diego, yet our ratepayers might have to pay for it.

So I'm glad you're having a lot of stakeholder engagement, but you need to engage the citizens of City of San Diego who could be paying for this.

And second of all, you should be doing more than just virtual open houses.

If you're going to run this through a natural state park like Verigo Springs, go to Borrego Springs, talk to the people in the communities in pay in person about this before you go to a natural preserve.

Thank you, Council President.

All right, thank you.

So not seeing anybody else on the lights.

This is an information item.

No, motions required.

Thank you to Brittany, Nate, Bill, and whoever else got in the hot seat, and we're willing to take the questions from the council members going forward.

There was a lot of ground covered.

There was a lot of ground not covered this discussion because we weren't setting this up for an action today because there are still so many things.

Uh, but I'll reiterate what the report said that it is feasibly feasible from an economic point of view and is feasible from a technical point of view.

A lot more work would have to be done as you kind of tried to summarize Heather and I appreciate that.

So with that, we will close item 200.

Again, thank you to everyone.

And Deputy Clerk, please introduce item 201.

Thank you, Council President.

Item 201, SDGE franchise independent audit report and franchise compliance review committee report 2023 through 2025.

All right, as you start to settle in, introduce yourselves for the record and let us know how much time you need.

Hello, thank you, Council President.

My name is Mayong.

We are we'll try to keep it under 20 minutes for the presentation.

That's for both for the entire reason.

Okay, thank you.

Thank you.

My name is Megan Ong, Program Manager and Department of General Services.

I'm joined today by uh Eric Cohen, uh, Aaron Cohen and Eric Nylon from Crow, Cody Huben, and Satomi Rash Zegler from our franchise compliance review committee.

Today we will be presenting to you the results of our second two-year compliance period of the SCG and E franchise, which will include a presentation from our independent auditor as well as our presentation from the franchise compliance review committee.

By way of background, in July of 2021, the council passed two ordinances that award the gas and electric franchises to San Diego Gas and Electric.

This franchise has a 10-year term with an automatic renewal for a second 10 years unless there's action taken by council.

As additional level of oversight, the franchise required two things.

First, the city is required to retain a third-party independent auditor every two years to perform an audit of SDG and E's compliance with the franchise.

And second, the franchise requires the city to establish the franchise compliance review committee, also known as the FCRC, a citizens committee comprised of two mayoral appointments and three council appointments.

The FCRC is charged with receiving the independent auditors report and providing its own report to council with a recommendation on the automatic renewal on the second 10-year term.

Both of those reports will be presented today.

In July of 2024, we presented a similar item for the first two-year review period.

And at the same meeting, council passed a resolution to establish the second FCRC to review the second compliance period, which covers July 8th, 2023 to July 7th of 2025.

I would like to take a moment to thank the volunteer committee members, Matt Brennan, Lyndon Lattimore, Cody Huben, Satomi Raff Zegler, and Corey Albright for their time and dedication to this committee.

In regards to the independent auditor, in October of 2022, city staff released an RFP for the independent auditor.

And after a competitive process, Crow LLP was selected as the vendor.

Crow will present their audit findings for the first two, sorry, for the second two-year Crow presented their audit findings for the first two-year franchise period as part of the hearing in July of 2024.

And the city chose to exercise its option to extend Crow's contract for the second two-year compliance period.

I have with me today representatives from the Crow team who will go into more detail about their audit procedures and findings in a few minutes, but at a high level, the audit covers the second two-year of the franchise.

Excuse me, the second two years of the franchise and includes the financial, operational, and cooperative requirements under the franchise ordinances and their supporting documents, which include the administrative MOU, the undergrounding MOU, and the Energy Cooperation Agreement.

At this point, I will pass it over to our independent auditor Crow, who will provide an overview of the audit findings and recommendations.

Thank you, Megan.

Uh next slide.

We'll go through some brief introductions.

We'll talk about audit scope and procedure and then our findings and recommendations.

So next slide.

My name is Eric Nylon.

I'm a director with Crow, and with me I have Aaron Cohen, who's a senior manager with Crow.

We don't have Bert with us, but he was the engagement partner on this project.

I'll turn it to Aaron to talk about the scope.

Thank you, Eric.

Thank you, Eric.

So the scope of the audit was an independent audit of SDGE's gas and electric franchise agreements.

And as Megan mentioned, the two-year period was July 8, 2023 through July 7th, 2025.

The audit covered SCGE's performance in complying with franchise agreements, administrative MOU, the utility undergrounding MOU, and the energy cooperation agreement associated with the franchises.

Now our audit procedures included conducting interviews with SCGE and city staff.

We spoke with SCGE staff, including finance operational and oversight personnel.

Spoke with many city departments, the development services department, engineering and capital projects, utilities undergrounding program, and city management.

We reviewed and documented requirements of each agreement.

We submitted multiple data requests to SCGE and the city.

These data requests were requested for relevant requirements for each of the agreements.

For franchise fees, we obtained and reviewed SCGE annual franchise fee calculation documents, quarterly franchise fee statements, process documentation, controls information, AR aging reports, bad debt expense support and collection procedures, and documentation of payment to the city.

For the administrative MOU, we selected a sample of 13 projects to audit project specific requirements, things like permitting inspections or collaboration.

We also reviewed supporting documentation for what we're calling non-project specific requirements.

This is information sharing protocols or communication between SCG and E and the city.

Similarly, for the utility undergrounding MOU, we selected eight in-process projects to audit requirements that were project-specific and then review review supporting documentation for non-project specific requirements.

For the energy cooperation agreement, we reviewed supporting documentation for each requirement.

Now the results of these tests indicated that SCGE met the four audit objectives in all significant respects for the audit period.

However, we did include two audit findings that were deemed not to be significant significant to the audit objectives but warranted inclusion in the report.

And now I'm going to turn it to Eric to walk through the findings.

Yeah, so the first of these findings has to do with compliance with the undergrounding MOU, and there were several sections of the MOU that uh we found noncompliance in, and they're listed here on this slide, and I'll review those with you.

For the first of those is 611.2 for a project titled Block BR, um 8R, uh STGE did not complete internal processes on time, which caused a delay in assigning an inspector to the project, and that's the Palm City Eger Highlands project.

Um secondly, STGE did not provide a written schedule of days and hours in which the STG and inspector would be available to a project titled block 8R.

Uh STGE ultimately was not able to provide an inspector at the time of that construction as a consequence.

So in section 743, STG did not comply by providing a construction baseline, which includes both an estimate of the cost and a schedule for trench and conduit work for the project titled 2BB Job 2.

That's the Crown Point one.

And finally, in Section 834, SCGE has not submitted detailed 90% design estimates, and the supporting documentation for invoices did not clearly differentiate projects that have reached the 90% completion threshold as required by the franchise.

So we have a number of recommendations to address these, these misses, so to speak.

The first is to establish stronger project management controls by developing standardized timelines and checklists.

Secondly, to assign a dedicated compliance liaison or project coordinator within SDGE to limit these misses.

Fourth, to establish regular joint review meetings with city staff.

They've started doing those and are doing more of them as a consequence of this.

Train personnel on MOU requirements by reinforcing compliance standards and finally link compliance to performance metrics or oversight reviews.

So those are recommendations that address first the first finding.

Second finding on the next slide has to do with the admin MOU section 10 point B of that MOU.

SDG did not schedule a preconstruction meeting with the city as required.

SCGN's field crews incorrectly assume that it was a class category one project when it which would not have required this pre-construction meeting, and the project was actually a category two project.

So there's a couple things that they can do to strengthen and you know respond accordingly, first by just project classification work and review processes so that this doesn't happen again, developing a project checklist to be reviewed by the supervisor before construction begins.

And perhaps the most important to train field crews and project managers to clearly differentiate between these two category types.

So those are the two findings.

The status of findings from the first phase of the audit.

I'll go through those briefly here.

There were four findings last.

Two of these have been remediating, remediated, those are three and four.

Number three was remediated because it's no longer a compliance requirement in the new admin MOU.

Number four was remediated because the finding related to a plan completion timing, which they met, although they delayed in meeting in getting that done, both the city and SGGE ultimately got the plan completed, so it wasn't a compliance matter in this phase.

The other two relate to number one there inconsistent undergrounding project cost estimates.

There were some inconsistencies in the overhead allocations to the cost estimates, and they've cleaned those up to some degree, but going forward, I think there's still, as they get into more construction projects, there's still a need to reinforce consistent project cost estimates there.

The second one is just in terms of collaborating between the city and SDG on the MOU for certain contracted services.

The MSA hasn't been solicited again, so to the degree that when that happens, there are more coordination between the city and SGG and E on that is merited.

So we didn't say that's remediated, but it's pending the next cycle of the MSA.

So with that, I will turn it back to the council for questions.

At this time, I will pass it over to our franchise compliance review committee.

Hi everybody, thank you.

My name is Cody Hoopin.

I'm the chair of your franchise compliance review committee.

Nice to be back in the seat, I think here with Tommy Rash Ziegler, the vice chair of the committee.

We're gonna split up this portion of the presentation.

Next slide.

So just to remind you, the purpose of the franchise compliance review committee was it was assigned a very narrow scope per the franchise agreement, and it's formed as you see here, every two years to review franchise compliance and recommend to the city council whether the franchise should be renewed for its secondary term.

So we're a function as a Brown Act compliant committee and comply with all of the rules of the Brown Act in our meetings.

Next slide.

Additionally, our responsibilities include reviewing and discussion discussing the franchise audit, which you just heard, in uh collaboration with the auditor, and preparing a comprehensive written report for you all, which uh we provided.

Um, and next slide, please.

Going quickly through these.

And then making a formal recommendation to city council regarding whether to approve automatic renewal of the franchise for a secondary 10-year term.

Next, oh, here we go.

The committee found that SDGE demonstrated overall compliance with all four agreements: the electric and gas franchise agreements, the administrative MOU, the utility undergrounding MOU, and the Energy Cooperation Agreement.

The audit identified only a few minor issues, mostly related to documentation, scheduling, or classification.

These were isolated and tactically with no evidence of systemic problems, financial harm, or governance breakdowns.

The committee recommends that routine monitoring or franchise compliance continue with a focus on clarifying expectations, standardizing documentation, and reinforcing early coordination between SDGE and city departments.

For the administrative MOU, this means strengthening internal controls and aligning renegotiation timelines with the committee's review cycle.

Right now, there's a timing mismatch between when the agreements can be renegotiated and when the committee is actually doing its review.

That means the committee's input may come too late to meaningful, meaningfully influence the process.

What we're proposing is to better align those timelines.

So when the renegotiation opportunities arise, they coincide with the committee's review cycle, allowing their work to directly inform city decisions.

For the undergrounding MOU, the committee recommends providing detailed cost breakdowns and establishing a regular review mechanism.

Those costs are often shown as big lump sums, not broken into enough detail.

So, you know, X is for labor, Y is for overhead, Z for construction.

Right now it's like getting a restaurant bill that just says a total of $200 with no itemization.

The committee is recommending an itemized receipt and regular check-ins to make sure everything looks reasonable.

For the energy cooperation agreement, the committee suggests setting realistic timelines, maintaining energy efficient program commitments, improving reporting and expanding public engagement opportunities.

Next slide, please.

While compliance is strong, the committee noted several areas where the processes could be improved.

These include ensuring pre-construction meetings are consistently held, clarifying documentation practices, increasing transparency and project costs, enhancing tracking and reporting under the Energy Cooperation Agreement, and creating additional opportunities for public engagement before agreements or modifications are executed.

Next slide, please.

The committee recommends continuing to monitor prior audit themes to ensure progress is sustained, recognizing that some issues require ongoing management rather than one-time fixes.

It also suggests creating plain language summaries of all agreements to help both the committee and the public understand the purpose, process, and the timelines.

Renegotiation timelines once again should be aligned, should align with biennial review cycle to improve public engagement, and the committee should have access to draft audit findings for early review.

Oversight shouldn't just focus on compliance though, we also need to look at financial impacts and how these agreements affect the community.

Creating structured opportunities for public input along with more standardized reporting across all franchise agreements would improve transparency and make it easier for the council and the public to review and understand what's happening.

Next slide, please.

The committee observed that not all franchise activities carry the same level of risk or public concern, so oversight should focus on areas of greatest impact.

For example, routine administrative updates like minor contract amendments or reporting changes don't typically have major community impacts and can be reviewed more quickly.

But decisions involving undergrounding projects, rate impacts, or long-term renewal terms have significant financial and public implications.

So those should be should receive deeper scrutiny and more detailed oversight.

Some prior audit findings like undergrounding cost variability have improved, while others require ongoing management.

In this case, continuous improvement rather than the complete absence of issues is the is a reasonable but uh reasonable benchmark.

To strengthen oversight, the committee recommends establishing success criteria beyond compliance.

For example, instead of only confirming uh compliance, we would also look out uh look at outcomes like whether the project stayed on budget or were delivered on schedule, sharing all public comments so free uh so feedback from residents is fully visible throughout the process, not just summarized.

Um expanding structured public input early in the agreement process, for instance, holding engagement sessions before key terms are finalized, not after decision decisions are largely set.

Enhancing audit scope for cost drivers, so instead of just seeing uh total project costs, we can clearly see the breakdowns, you know, like earlier, n itemized receipt and standardizing reporting across all franchise agreements to improve transparency, consistency, and accessibility for the committee, city council, and the public in general.

And so uh continuing our recommendations, a bigger picture.

Um, we based on the information we had in front of us and barring any other decisions you all might make, the committee recommended uh allowing the franchise to renew with conditions.

Uh so this conditional renewal, um the council's decision per recommendation should consider both individual agreements and MOUs as well as the overall structure and long-term impact of the franchise.

So our recommendation for renewal is conditioned on aligning renegotiation timelines to ensure meaningful public and council input before agreements are finalized, as Satomi talked about.

Some of our key compliance um, excuse me, key findings is that SDG is generally compliant based on the scope of the audit question posed with only minor issues noted in the audit.

Underground costs are high and overhead transparency could improve.

Um, and previous concerns have been mostly addressed, but climate action progress has been limited.

Um and public input was considered um in our uh meetings as well, and this renewal would preserve flexibility for future options like municipalization.

Thank you.

Uh this conditional renewal is the approach our committee recommended because it supports both San Diego ratepayers and the city's broader policy objectives.

But I would like to underscore that it is important to recognize that simply meeting the terms of these agreements, the compliance alone doesn't fully address the bigger concerns of how you all define success as a lot of a discussion you've heard today.

Things like affordability, potential rate impacts, or how these agreements align with the city's long-term energy and climate goals.

Uh, this is why renewal is ultimately a policy decision to the city council balancing compliance with public value and long-term priorities.

Thank you.

We're happy to take any questions, I think.

All right, thank you for the presentations.

Uh special shout out to Cody, Satomi, and everybody on the franchise compliance agreement, the volunteers.

You got some fans out there.

And all the work to do this.

So with that, uh Deputy Clerk, please proceed with public comment.

Thank you, Council President.

This item received one comment in favor and one comment in opposition via our e-comment form, which has been distributed to the council.

Uh we will begin with in-person comment, allegedly Audra, please come forward.

You'll have one minute to speak.

And uh it's just interesting to have them here and talking about like how much is it really gonna cost, and it's like four to seven billion, and then it's like be honest, then it's like okay, six to eight.

Um, so interesting how we just let this go on, and as long as we uh make sure they're compliant uh with these agreements, um, but no wonder why the cost is high for undergrounding because they make profit off of this infrastructure.

Um, and so I'm wondering if your conditional uh renewal can be like hey, any kind of profit you make, you give it to us or half of it, so that the people can start getting their money back.

It's like I don't understand why we just kind of bend over and allow them to do these things.

It's like you know what's happening, you know why their cost is high and why they're profiting, but yet we just continue to let it happen.

How about you guys take some of that back?

I mean, you're the ones with the agreements.

Shit or get off the pop.

Thank you.

Blair Beekman.

And while Blair comes to the microphone, could we have Anthony Ralphs, Laura Saldania, and Bob Kazewski?

Please come to the front row.

Hi, Blair Beekman.

Thanks for the report.

Thanks for the words on working on undergrounding issues that needs to be better specified.

I was trying to specify previously that if we're going to do undergrounding things, there is little neighborhoods that have undergrounding funding sources, and we can consider that as a municipality process.

Thank you for the ideas of oversight.

Yeah, basically what I was saying was that we don't have to fully rely on municipality.

We can rely on San Diego Community Energy itself and not the municipality.

Those are options.

Thank you for the oversight process that you've offered overall.

To do the big items on public projects is good.

Also to offer, you know, what are the little administrative signatures?

Where's a little space for that that can be available to the public as well?

I think that can be helpful and important.

Thank you.

Thank you.

Anthony Ralphs, followed by Laurie Soldania.

City Council, thank you for the presentation by the audit group.

I took a couple notes on the things that I heard.

I heard number one that they didn't finish the undergrounding on time, uh, that they didn't have standardized timelines, and that the construction baseline for cost and schedule, or rather uh that they didn't schedule pre-construction meetings.

These are just the ways in which SDGE, the billion-dollar uh profiting company every year has been out of compliance, uh, just some of the ways in which they've been out of compliance that I heard that I got to take notes on, which it was hard to do because the representatives from SDGE are so loud and they're talking right now when I'm trying to hear the presentation, and one of them is eating their popcorn so incredibly loudly that it's really difficult for me, and it's really difficult for the public to have trust in SDGE when they're talking in the middle of someone giving a presentation on how they're out of compliance and eating so loud that I can't even write down the notes as to all the ways in which they're out of compliance, yet they're making a billion dollars a year, and they're asking for their uh franchise board renewal.

Thank you.

It does conclude your time.

Lori Saldania, followed by Bob Kazuski.

Thank you.

So ultimately, I think we need to say is this meeting the needs of utility ratepayers, and there are many things here that appear that they're not committed to improve customer service.

They were delays.

We have the domino effect of missed deadlines and other things that delay the outcomes.

So, what are the consequences for this?

That's my question.

When if you do a customer service survey and you find out that they're not meeting the needs of your customers, what are the consequences?

What do you change?

And I think that's been missing from these reports for the last few cycles.

Um, are the meeting formats available for people to participate?

Are they accessible to the public?

The ones that I've been to have been in the middle of the day when most people are not able to participate.

I think that's problematic.

So, in general, talking about undergrounding, my family has had the same house for 60 years.

We've been paying into undergrounding, it's delayed, delayed, delay.

So, what are the consequences for delaying basic customer service?

Thank you, they're appearing to be met.

Bob Kazewski, followed by Brittany Sis.

I'm not deeply informed on this issue, and I'm mostly sympathetic to ratepayers.

But it's my understanding from S D and G and E representatives that they are operating on their own land or land that they have leased or uh from their own funds over many years.

Now, that doesn't mean that the city shouldn't take a role in ensuring that citizens are treated fairly.

You should.

But I find it inexplicable that here you are investigating and reporting and auditing what SDGE does as a private business on mostly their own land, while you have refused to do any investigation or uh auditing of a private business operating on our public parkland at the Torrey Pines Collider port.

Can any of you explain that inconsistency?

Thank you.

That does conclude your time.

Brittany says.

Hi.

Thank you so much both to the auditors and the franchise compliance review committee for spending the time to evaluate our work under the franchise agreements.

We acknowledge that the independent auditor for the second year or the second time found no significant findings or deficiencies relating to SDGE's performance on the franchise and related agreements.

This reflects our commitment to meetings to meeting the several hundred requirements under each of these ancillary franchise agreements.

Of course, we know we always have to improve.

We'll continue to work on our processes and we take that responsibility seriously.

We'd also like to recognize the franchise compliance review committee for the time and care they dedicated to this process.

After their extensive review, including presentations from subject manager experts, including the CCAs, SDGE, and other stakeholders in the community, your evaluation of our performance and your consideration of all the public input.

Importantly, the committee found that SDGE demonstrated overall compliance with the electric and gas franchise agreements as well as the admin MOU.

Thank you very much, all of you.

Thank you.

That concludes in person public comment.

We will now go to virtual public comment.

I've started the five-minute timer in Council Chambers.

And we will turn to the virtual queue, in which there are currently three participants requesting to speak.

We'll begin with John Stump.

Please begin.

Oh.

Did they get an A, a B, a C, a D, or an F?

Can't tell.

You know, for a billion dollar company, you'd expect an A plus.

The second thing that's missing here is how much did the city or its residents of the city of San Diego have to pay in litigation with SDG and E.

How much damages did they do?

On the undergrounding, you know, in the valuation that we had before, the undergrounding seems we like we have to pay three times for the same undergrounding.

And for the lawyers there amongst you, the law of fixtures should apply.

This is not like San Francisco in any way.

San Francisco is a takeover.

Ours would be an end of a franchise or lease, and we get the law of frixtures.

Thank you.

Thank you.

Our next speaker is John Ellier.

Please begin.

Well, good afternoon.

This has been a long one.

I just really wish I could get a contract where when I screw up with a major installation like at a nuclear power plant, I get to bill the customers for it.

I don't even begin to understand this cost plus billing that we live under.

I will tell you this six months ago I had solar installed on the unit that I lived in.

Unfortunately, I've not been able to take advantage of it until the last two months.

But I will say this I generate twice as much twice the amount of power that I need in this household on that solar.

So the rest of it goes back to my neighbors and the people around me.

Unfortunately, I've not been able to take advantage of the benefit of the reduced billing because for three or four months, D G and E could not get people out to inspect and approve and turn it on, which is just outrageous.

Anyway, get solar, get away from the grid, and get rid of S D G and E.

Thank you.

Thank you.

Our next speaker is caller with the last four digits 8700.

Please begin.

Thank you.

Joy Sanyatra.

I don't support the renewal of the SDDG and E franchise Agreement.

My reasons are mostly in the last paragraph of the PowerPoint entitled conclusion.

And I quote, conditional renewal supports ratepayers and the city's objectives.

At the same time, compliance alone doesn't solve concerns about affordability, rates, or long-term value.

Ultimately, the council must weigh both technical performance and broader public benefit in deciding whether to renew.

Dear council, dear mayor, do not renew.

It does not support rate payers.

It does not support the city objectives.

We all know that.

So let's be bold, let's have the courage to say no.

Thank you.

That concludes your time.

Thank you, love to all.

Thank you.

That concludes public testimony on item 201.

All right, thank you, Deputy Clerk.

With that, this is an information item.

No motions required.

I'll turn it over to Council members and jump in if nobody else wants to.

Um so I will jump in.

Uh again, thank you to the members of the franchise compliance agreement.

I mean, it's committee.

Excuse me.

It's an interesting animal that we've created.

We appreciate your two year stint.

Um, and if I can make a pitch for you to come back and do another two years, I would be remiss if I didn't do that.

Um, I want to speak to um some of the things that were raised by the public.

Uh we have new faces doing utility undergrounding in our transportation department, uh, and they've done some serious um changes to that.

That uh when we do the next two-year review, I don't think we're gonna see those same problems uh because they've gotten much more aggressive, not only with SDGE, but also with uh ATT and spectrum, the telecommunications, uh, that also have above ground lines.

So it didn't surprise me that there were some instances where there were problems going forward, uh, but the the new crew uh internally at the city is doing a fantastic job.

So I don't think we'll see it in the next audit we go forward.

Um and to Mr.

Kazinski, um, or Bob, because I always pronounce your name wrong.

Um, I did reach out to the city auditor to actually look into the glider port.

You think I don't do anything.

Um, and the city auditor reported that they have heard these allegations multiple times.

And quote, our investigations determined that the allegations of fraud, waste, and abuse were unsubstantiated, and that the qualification requirements for hang gliding at the glider port were reasonable.

Uh, that comes from our independent city auditor.

Take that for what it's worth.

Uh, but again, thank you to the auditors for the good work that you do under uh the franchise agreement.

Uh, thank you, Megan, for the good work that you do, and then the again the volunteers who stepped up for the committee very much appreciated.

Uh, with that, we will go to Councilmember Ilo Rivera.

All right, uh, thank you, Council President.

I just want to say thank you.

Uh it's a ton of time and effort uh that goes into this volunteer work that you do.

Um, and it is important and uh is one of the things that distinguishes the way that we've approached uh our relationship with SDG with this franchise agreement in comparison to what had been done in the past.

I think that that positions us better for the future, and I'm very grateful for the work that you do to help us do that.

Thank you, Council President.

All right, thank you, Councilmember Ilo Rivera.

Uh, not seeing anybody else in the lights.

I will close this item up and again thank you for the good work and your patience on a long afternoon.

Um, and with that, Deputy Clerk, please introduce item two oh three.

Thank you, Council President.

Item 203 approval of a fifth amendment to the agreement with PATH San Diego for the coordinated street outreach program.

All right, thank you for that.

Uh, this is a fifth amendment to an agreement.

It's a little bit of a holdover.

Um would you guys be okay with waiving the presentation, given that this is the fifth amendment.

All right, um, so settle yourselves in.

And Deputy clerk proceed with public comment on item 203.

Thank you, Council President.

We will begin with in person comment.

Allegedly, Audra, please come forward.

You'll have one minute to speak.

And again, you guys want to get out of here, but again, the presentations aren't for you guys.

It's also for the people.

All right.

So this is interesting because, you know, homelessness is running rampant, though it's good for business when it is.

It's fantastic because there's so much money to be made off of these people.

And I'm wondering how good are they doing if just right outside the doors here, there's homeless people sleeping every night.

So I mean, is that money well spent?

And when there is no you know, path to another shelter or you know, some kind of home.

It's like a hamster will we just keep going around.

It's like let's give more money.

Uh and maybe that will help fix it.

No, we don't have anywhere for them to go, but we have these people out there just telling people, you know, that there's nowhere for them to go.

But then we're gonna arrest them or take their stuff, uh, you know, because they're out there.

So seems like it's working.

Good job.

Maybe you guys could get some more money and throw it at it.

Thank you.

That concludes your time.

Our next speaker is Blair Beekman, followed by Anthony Ralphs.

Hi, Blair Beekman.

I'm feeling improving today, I guess.

My my knowledge and depth of uh community issues is pretty feeble, but gosh darn it.

This is an item that I think really needs a public presentation.

Um, the work that Path does uh for our unhouse has been incredible, especially in the past few years.

They've proven how much they can house people, and we don't just talk about shelters, we can actually be talking about housing issues.

I really asked the council to if they can uh you know be asking questions after public presentation, and that um they can still make their presentation, that would be great too.

Um it's really important to be hearing this item, and I'm really surprised we're um avoiding it out of uh efficiency and to get home early.

Um, this is important stuff.

I hope we uh make this stuff more open and clear in our public future.

Thank you.

Anthony Ralphs.

Good afternoon, City Council.

Excuse me.

I support the approval of the Fifth Amendment to the agreement with the Path San Diego program for the coordinated street outreach program.

Um, at a time when we've seen so many of our homeless programs and outreach programs cut, uh, particularly the Alpha Project, particularly, I believe it was the uh the uh I forget the good the good center.

Uh I'm blanking on the full name of it.

But anyway, we've had so many homeless programs cut, and this is a manner of public safety, and I know how quick y'all are to defend public safety, so I would expect um that we could have that same approach with our homeless, that same compassion and empathy, and uh that these programs can pan out and help the people that they are intended to serve.

Thank you.

Thank you.

That concludes in-person public comment.

I've started the five-minute timer in council chambers.

We will now turn to the virtual queue, in which there are currently three participants requesting to speak.

We will begin with caller with last four digits eight seven zero zero.

Please begin.

I thank you, uh Joy Sanyaka.

Yes, I support this item.

Path is absolutely fabulous.

Uh I don't have personal experience with them, but I had a wonderful experience with the homeless couple of years ago when I moved here, and I followed their uh experience with PATH and how they helped them, and it was very beautiful.

Uh, the only concern I have for PATH, it seems like a few years ago, they were having trouble with really paying their people enough to work.

You're having trouble filling positions.

And that affects all of San Diego love to all.

Thank you.

Next is Natalie Raske.

Please begin.

Hi, Natalie Rashke here, District 7.

So I've been doing some research and I'm really getting good at my research, I think.

So I'm kind of confused on what I'm researching and what this Path San Diego Fifth Amendment means because it's telling me that the resolution before it describes this routine one-year extension flat funding at 13.6 million unchanged.

But there's an underlining amendment does something that the resolution never mentions.

It adds a new clause, acknowledges that HMIS, CES and CIE, the data systems used to track and house residents are surveillance technology under the trust ordinance.

So moving forward and improving, are these systems being used currently?

Is there understanding the grace period?

And is this being acknowledged or is this was known about the question?

Thank you.

That does conclude your time.

Next speaker is John L.

A.

Please begin.

It's been a long one, but I did want to make time to update you that I actually put the individual that came out in front of the city council in my RV for a period of time.

But I will tell you that we run into these cases all the time.

I love PATH, they're an amazing provider.

We have had uh nothing but high regard for much of their services.

So this is not necessarily related to Path, but we do not have a mechanism for people who are struggling and falling through the cracks, uh, to raise their hand and go, hey, what's going on?

And I don't think that uh we are capturing the number of people that are returning to our system effectively because after two years, if you come back into the system, our HMIS recognize you as a brand new person.

Uh anyway, we need to be listening to our customers.

We're still not, and I would hope that we could take that seriously.

Thank you.

Thank you.

That does conclude public comment on item 203.

All right, thank you, Deputy Clark.

Uh this is an uh item for discussion, and we will need a motion.

Uh so we'll turn over first to council member Whitburn.

Thank you, Council President.

I will make the motion to uh approve the staff recommendation.

Uh this presentation is online.

Both the PowerPoint and the staff report are online for everybody to access, and they've been online for everybody to access for several days now.

Um this uh does not add more money to the contract.

Uh it extends the term of the contract.

Uh these response teams that path has out there uh assist people who are experiencing homelessness and have helped hundreds of people not just get into emergency shelters but also into housing, uh both temporary and permitted housing.

That's very important because I am deeply concerned about the um unavailability of emergency shelter.

We need more shelter beds to be available uh to people.

Um but the good news is that path is also directing people to uh housing.

And as long as uh we're getting people off the streets directly at the housing, that's a good thing.

One of the most important things we could be doing, and uh I will approve uh move the staff recommendation.

Alright, thank you, sir.

So we have a motion by Council Member Whitburn, we'll go next to Council President Pro Tem Lee.

Thank you, Council President, and uh thank you to Path for their continued work as well.

I'll second this motion.

All right.

So we have a motion by Council Member Whipur and a second by Council President Pro Tem Lee to move the staff recommendation.

Um I see Council Member Von Wilbert's up.

Thank you very much.

And thank you for all the work that Path does as well.

I appreciate it.

Um I know this doesn't increase the amount of the contract, but is it the Fifth Amendment?

So are we thinking about doing another RFP at some point or new scope of services or what's the plan?

We released the RFP in April of this year, so we intend to fulfill the awardees of the RFP in the next fiscal year.

And that will then supersede this contract.

Okay, all right.

Thank you very much.

Uh and Sarah, could you introduce yourself for the record since you did respond?

Sorry, Sarah Jarman, Director of Homelessness Strategies and Solutions.

Deanna would be very mad at me if I didn't get that done.

All right.

I don't see anybody else in the lights.

I'll just add my thank you for managing that and to the folks at PAF.

We have a motion by Council Member Whipper and a second by Council President Pro Tem Lee to move the staff recommendation.

Please call the roll, Deputy Clerk.

I have set up the voting system.

Please cast your vote.

The item passes unanimously with district two and district eight absent.

All right.

And for meeting management, the reason we did that was to make sure that we have a quorum when it comes to non-agenda public comment at the end.

So for those that would might participate remotely, stay tuned.

We may or may not have a quorum to have remote, not agenda public comment.

We will definitely do it for in-person, not agenda public comment.

Meeting management.

All right, Deputy Clerk, please introduce item 202.

Thank you, Council President.

Item 202, establishment of a cannabis delivery services business permit and enhanced commercial cannabis enforcement mechanisms.

Alright, I believe this is coming from District 7.

So Council Member Campia, do you want to have some opening remarks?

Thank you.

Turn it over to your staff.

Yes, Council President, thank you very much for that.

Before we begin with the staff presentation, I'd like to take a moment to recognize the amount of work that's gone in today's action over the past two years, not only from my office but from the mayor's office and cannabis workers and businesses, members of the public who've engaged with us throughout this process.

Cannabis delivery is a complex policy issue, and the item we are putting forward for consideration today is one that puts accountability, safety, and workers first.

So with that, I'll turn it over to Summer Patton, Deputy Director of Policy from IA office for the presentation.

Thank you.

I'll need 10 minutes for the presentation.

When you're ready.

Good afternoon, Council President Lacava and Council members.

I'm presenting here today on behalf of Councilmember Campillo, the establishment of a cannabis delivery services business permit and enhanced commercial cannabis enforcement mechanisms.

The proposed actions today are to establish a cannabis delivery business permit category for commercial cannabis operators entering the city of San Diego to conduct cannabis delivery.

I'm sorry, can you hold on?

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There we go.

Okay.

My apologies for the interruption.

Go ahead.

Okay.

So that's the first action.

The second is to establish a private right of action to allow eligible entities to pursue civil enforcement against operators that violate local commercial cannabis regulations.

And third is to revise penalties for noncompliance to a maximum of $20,000 per day for court imposed civil penalties and $20,000 per violation for administratively imposed civil penalties not to exceed $500,000 per parcel or business and up to 10,000 per violation for administrative abatement penalties not to exceed 500,000 per parcel or structure.

And before we discuss the proposed changes, it's helpful to review the licensing system around commercial cannabis.

Cannabis in California is regulated on a dual track system, meaning that cannabis is regulated both by the state and up by a business's city or county.

And at the state level, there are two types of retail licenses.

There is a non-storefront retailer or delivery-only business, which is what we're talking about today, and there are storefront retailers or brick and mortar businesses.

And while state law allows cannabis delivery on public roads, state law also explicitly states that local jurisdictions have authority to regulate cannabis businesses, including through business license requirements.

Cities and counties can prohibit cannabis of all business types, some or implement their own regulations.

And as shown on the map, this creates a patchwork of local regulations throughout the state.

So if a customer in San Diego is ordering cannabis for delivery, it can either come from a permitted retailer in the city, a state licensed business entering the city to deliver, or a business operating outside of legal requirements.

Currently, the city only permits doorfront or brick and mortar cannabis retailers.

These are the ones that are limited to four per council district, and they're required to obtain a conditional use permit.

They are allowed to deliver direct to consumer as part of that conditional use permit.

The city allows state license delivery from outside of the city if that business registers for a business tax certificate with the treasurer's office and remits monthly business taxes.

The city's land use code does not allow delivery only non-storefront retail establishments within city limits, and this ordinance does not change that and it does not propose any new land uses.

Cannabis delivery is extremely difficult to regulate because the operations are mobile and cities can only regulate what occurs within their jurisdiction.

And cannabis businesses can easily avoid those regulations.

And on the screen is an example of a listing on weed maps for a business advertising in North Park that's based in Alameda County and at looking at the license on Department of Cannabis Control website, it's expired.

But they currently advertise 30 to 60 minute deliveries in San Diego.

So here we can see the difference between what's advertised to consumers and where the current the city currently permits cannabis retail.

The image on the left are delivery only offerings listed on weed maps in San Diego.

Some of these businesses are advertising as based in San Diego and are licensed through the state.

Some are not licensed through the state or operate on expired permits or are not following all state and local requirements.

State licensing is strict and requires those businesses to return to a licensed premise after a delivery route, to use license facilities to restock their product, to dispatch deliveries only after orders are received and logged, and it also requires delivery of cannabis goods to be performed by a driver employed by that retailer.

For the retailers to maintain an accurate list of their delivery employees to confirm ages and identities of customers, and for delivery drivers to carry copies of the retailer's license ID and an employee badge, which are just a few examples of the numerous other state requirements as part of commercial cannabis delivery.

So with that, the goals for this ordinance are to create a centralized regulatory checkpoint for cannabis delivery services entering the city of San Diego.

It's to increase the cost of non-compliance through race penalties.

And third, it's to allow private civil action where the city currently lacks staff capacity.

Next slide.

So with stronger civil enforcement, the goal is to incentivize registration for a cannabis delivery services business permit and encourage local compliance.

This requirement would be in addition to the business tax certificate and cannabis business tax currently required and administered through the city treasurer's office.

So all three of those processes would be administered by the city's treasurer's office.

Cannabis delivery businesses entering into the City of San Diego would be required to obtain the permit.

This does not include current CUP holders as delivery services are already permitted and regulated through their conditional use permit, and they are subject to an annual cannabis fee at around $15,000 a year.

The application requirements are modeled off of the city of Ventura, which has a similar license, and would require a copy of the business's state retail license, a copy of their business tax certificate, information of all owners and employees, proof that employees are direct employees of the delivery service as required by state law, and the fee amount would be determined in a future action to determine the exact cost recoverable amounts related to the registration or permit.

So the proposed enforcement changes are to increase civil penalties in three categories in the code regulating commercial cannabis operations.

The first is to increase court awarded civil penalties for commercial cannabis violations up to $20,000 per day per cannabis business.

The second is to increase administrative civil penalties for violations up to $20,000 per day, not to exceed $500,000 per business.

And third, this ordinance defines cannabis violations as a public nuisance, which would then allow the city to abate violations if there's capacity.

The penalty amounts are aligned with recent updates to the land development code, which is updated at $10,000 per violation, not to exceed $500,000 per parcel.

But the significant enforcement change is to introduce a private right of action for cannabis related code violations.

Private rights of action are more commonly used in labor law, but was implemented to allow civil enforcement against cannabis violations most recently through AB 1171, which is implemented in 2024.

The ordinance proposes establishing the private right of action to allow legal cannabis businesses or labor organizations representing cannabis workers to file civil actions to enforce compliance.

This means that a licensed cannabis business could sue a business if they can establish that a violation of this ordinance occurred within city limits.

And any penalties recovered would be distributed between the city for enforcement and the entity bringing the civil action, 65% to 35%.

And this distribution was modeled after the private attorney general's act or PAGA, which was updated in 2024.

So with that, the recommended action today is to approve amendments to Chapter 4, Article 2, Division 15 of the San Diego Municipal Code to establish a cannabis delivery permit business permit category for commercial cannabis operators entering the city of San Diego to conduct delivery, to create a private right of action allowing eligible entities, including state certified cannabis retailers and labor unions representing cannabis workers to pursue civil enforcement against operators that violate local commercial cannabis regulations, and to revise penalties for non-compliance to a maximum of $20,000 per day for court and post civil penalties, $20,000 per violation for administratively imposed penalties, and up to $10,000 per violation for administrative abatement penalties.

And that concludes my presentation.

Thank you.

All right, thank you very much for the work and the presentation.

Now I'll turn it over to the Office of the IBA for comments.

Thank you, Council President.

Sergio O'Callder from the IBA's office.

As presented by staff, the this proposal would make four main changes to the municipal code.

First, they would create a new permit category specifically for cannabis businesses that are based outside the city but deliver cannabis products to customers within city limits.

Consistent with the status quo, this proposal will not permit delivery only businesses based within the city.

Second, it would establish a private right of action allowing compliant cannabis businesses and representative labor organizations to pursue civil action against operators without a civil city permit.

Without a valid city permit.

Civil penalties recovered in this manner would be shared with the city.

Third, it will classify cannabis businesses without a city permit as a public nuisance.

And lastly, it would update fines for those that fail to comply with the city's cannabis permitting requirements.

Based on our conversations with relevant departments, the fiscal impact of this proposal is uncertain, but may not be substantial.

There are three noteworthy sources of potential revenue outlined in the proposal.

First is permitting fees, second is city imposed fines, and then third is the city's share of civil penalties recovered through private right of action, which would be one time in nature.

Regarding permitting fees, the number of businesses likely to seek a new delivery permit is limited.

Currently, to conduct business, including deliveries within the city, cannabis businesses outside city limits must obtain a business tax certificate and remit cannabis business tax.

The city treasurer's office indicated that there are five of these compliant businesses.

Staff noted that if a new permit is established, these five businesses are expected to obtain the new permit in addition to the business tax certificate.

Cannabis delivery services that do not currently have business uh business tax certificate, however, would likely not comply with the additional permitting requirement.

Given the small number of affected businesses, any permit fee revenue as well as cannabis business tax revenue would likely be limited unless private rights of action compel enforcement.

Regarding fines, we found that the city currently does not currently receive minimal city issue penalty revenue from delivery operators that do not comply with the city's current regulations.

Therefore, even with adjustments to the fines, city issue penalty revenue would likely remain minimal.

The private right of action provision offers an additional enforcement tool for private entities, though state law already allows licensed cannabis businesses, including those permitted by the city to pursue civil action against operators without a state licensed cannabis license.

The city's city attorney's office has not found any reported cases of such lawsuits, so it's unclear whether eligible parties would choose to pursue civil action under this proposal.

As noted by the presentation, however, the state's provision has a higher burden of proof and a more limited financial incentive compared to this proposal.

Additionally, this proposal would also allow compliant city businesses to pursue civil action against operators without a city permit regardless regardless of whether they have a state issued cannabis license or not.

Well, the intent of this proposal is to regulate state license cannabis businesses not complying with city regulations or unregulated operators.

We note that the greater compliance challenge lies within with cannabis delivery businesses that operate illicitly without state issued licenses or illicit operators.

Since again, they are unlikely to comply with the new additional local permit requirement.

Additionally, since this proposal doesn't increase the city's enforcement levels, the permit and fines provision of this proposal may not significantly improve compliance among illicit or unregulated operators and materially increase the city's revenues unless private action compels enforcement.

During our discussions with the Development Services Department and the Treasurer, they raise concerns regarding implementation.

These operational concerns include uncertainty over whether which new the which department would enforce the new permit requirement, what enforcement of the new permit would look like from the city's perspective, questions about the city's authority to find businesses located outside the city boundaries, and whether additional resources would be needed to administer and enforce the program.

We recommend that council inquire further with departments, including the city attorney's office, city treasurers, DSD, and police the police department regarding the practical challenges of implementing and enforcing these provisions and whether they are there are any outstanding issues.

This concludes my comments and are available for any questions.

Thank you, Council President.

Alright, thank you, Frazier.

I always appreciate the input of the office.

With that, Deputy Clerk, please proceed with public comment.

This item received five comments in opposition via our e-comment form, which has been distributed to the council.

We'll begin with in-person comment.

Uh DeAndre Brooks, please come forward.