In 2015, the city of San Diego adopted a visionary Climate Action Plan (SDCAP). One goal within the SDCAP is to reduce greenhouse gas emissions by having 100 percent of the electricity used within the city be from renewable sources by 2035. To further that goal, Mayor Kevin Faulconer is recommending the city, alone or through a joint powers authority (JPA), pursue adoption of a Community Choice Aggregation (CCA) program.

I believe that within the next few decades global warming will represent a significant threat to the quality of human life on our planet. I enthusiastically support policies and programs that will meaningfully reduce greenhouse gas emissions (GhG), including maximizing renewable energy. However, there are critical foundational questions which should be addressed before the city goes any further with a CCA plan.

Related: Why San Diego plan for community choice energy is a blueprint for bipartisan climate action

The mayor’s announcement followed the October 2018 release of the city’s CCA Business Plan. The plan acknowledges that establishing, managing and maintaining a CCA is a complex enterprise, operating in a highly regulated environment, requiring significant capital or credit, with responsibility to procure an essential 7/24/365 commodity. That something is “new” or “complex” doesn’t mean it shouldn’t be considered, but it does mean the proposal must be soberly and dispassionately evaluated.


What is the city’s potential marginal GhG reduction gain with the CCA? California law changed in 2018 to mandate 60 percent of electricity be from renewables by 2035, with a goal of 100 percent by 2045. This law fundamentally changed the foundational benefit premise of CCAs. Even if state mandates are not accelerated, San Diego’s marginal benefit is at best GhG emissions from 40 percent of electricity generation in 2035 — my calculation is roughly 2 percent of the region’s total GhG emissions — declining to zero by 2045. By comparison, transportation represents almost 50 percent of regional GhG emissions. (The plan recognizes that under no scenario can 100 percent of San Diego’s electricity ever be from renewable generation.)

The city needs to recalculate the value of the potential marginal benefit in light of this new, statewide standard.

Proponents argue that the CCA will procure the power cheaper than SDG&E, saving consumers money. The plan’s math is complex and unavoidably layered with assumptions. Per the plan’s base case, the saving is 0.7 cents per kWh — less than a penny. For the average city ratepayer paying $137 per month, the savings would be roughly $3.70. The plan acknowledges that savings cannot be guaranteed, and in some scenarios CCA power would be more expensive. The ultimate final CPUC ruling on “exit fees” will be critical to any savings calculations. Do these uncertain margins justify a new “non-core to mission” government-controlled business?

Beyond operational complexity, the plan projects the CCA will require:


Upfront costs of $5 million

A reserve fund of up to $100 million

Annual operating costs of $16 million

The plan presents options for sources of funds, most referencing the city as the funder or the credit-worthy entity. The plan recognizes that a new JPA would not qualify. The mayor should state what the city is prepared to do or not do.


Obviously, to realize net GhG reductions the energy must be produced by new sources. The plan states that if the CCA buys power from existing sources, no GhG reduction has been achieved, an unavoidable reality for at least the first years of operation.

New production facilities are very expensive, and take years to site, permit and construct. Developers generally demand binding purchase agreements from credit-worthy parties before construction or entering into long-term, fixed-price contracts. State law requires CCAs to enter minimum 10-year fixed price contracts for 65 percent of mandated renewable energy.

The plan defers all fundamental credit issues for later resolution. I disagree. The mayor should state if the city will act as the credit-worthy entity. if not, what is the viable plan to ensure new production and fixed price purchase agreements?

GhG impacts are global. Even if San Diego had zero GhG emissions, our environment would not be “cleaner.” Cities worldwide should lead GhG reduction efforts, and San Diego should continue to lead cities. Section V of the plan lists a series of exciting energy reduction opportunities, many of which could be accelerated by the city today, without creating a new business or expending significant public funds. Pursuing these opportunities, along with aggressive energy storage programs, would produce results other cities would study and emulate, reduce the city’s GhG emissions and create new local companies and jobs.


Until key value and financing issues are answered, no private business would undertake the uncertainties, complexities and costs of the proposed CCA. Why should the city be different?

Waring, a San Diego investor, served as San Diego’s deputy chief operating officer for land use and economic development under then-Mayor Jerry Sanders.