The San Diego City Council earlier this week approved a host of revisions to an already existing energy cooperation agreement with San Diego Gas & Electric — but the updates do not include the utility kicking in an extra $150,000 per year for a solar installation program.
The energy cooperation agreement is part of the multiyear franchise agreement the city signed with SDG&E four years ago.
Under a franchise agreement, a municipality allows a utility to use the public right-of-way to install and maintain infrastructure — such as poles, wires and pipes — to deliver electricity and natural gas to customers.
Created as a corollary to the franchise pact, the energy cooperation agreement calls on SDG&E to help the city on various fronts, such as meeting the city’s clean energy, electrification, safety and equity goals. Examples include a tree-planting program that SDG&E funds and the power company coordinating with the city on grant opportunities and wildfire safety.
One of the most high-profile initiatives is the San Diego solar equity program that distributes $1 million per year to cover most or practically all the costs to install rooftop solar systems for income-qualified homeowners who live within the city of San Diego.
SDG&E pays for the program through shareholder funds, not ratepayer dollars. It benefits 30 to 40 households per year.
During Tuesday’s City Council meeting, District 9 Councilmember Sean Elo-Rivera called on SDG&E to increase its annual contribution to the solar equity program from $1 million to $1.15 million (or $150,000 more) per year, to for inflation that has occurred since the franchise agreement was hammered out in 2021.
“To me, this is a very modest request to for inflationary pressures,” Elo-Rivera said, citing that SDG&E earned $891 million in profits in 2024, according to filings earlier this year by the utility’s parent company, Sempra.
But under the of the energy cooperation agreement, any updates to the deal need approval from both the city and SDG&E, and the utility balked at increasing its annual contribution to the solar program, saying it is not needed.
“Those inflationary concerns have not affected the program,” Brittany Applestein Syz, vice president of external affairs and communications at SDG&E, told the council, adding, “We do believe that we can still continue to hit the same number of homes that we have (in) the prior three years for the extension of this program.”
A series of other revisions to the energy cooperation agreement met with no opposition from council . The updates require SDG&E to assist city staff in a variety of measures to help San Diego meet its climate action plan goals, such as helping the city reduce greenhouse gas emissions in its municipal buildings.
In addition, the utility pledges to help San Diego Community Power, the area’s community choice energy program, with its launch of the San Diego Regional Energy Network that offers programs to make energy efficiency and electrification more accessible and affordable to customers.
The City Council voted 5-2 to approve the revisions to the energy cooperation agreement that excluded the $150,000 per year bump to the solar equity program. Elo-Rivera and Councilmember Henry Foster voted no; Council President Joe LaCava and Councilmember Marni von Wilpert were absent.
Prior to the vote, Randy Wilde, senior policy adviser for Mayor Todd Gloria, said the updated version of the energy cooperation agreement “is improved and it’s more specific, it gets more benefits for the city,” especially when the franchise agreement itself comes up for renewal.
Approved in June 2021, the franchise agreement can run as long as 20 years — 10 years and then an automatic renewal for another 10 years.
However, if the city is unhappy with SDG&E, it has a window to void the 10-year automatic renewal, provided a two-thirds vote of the San Diego City Council agrees.
The extension can also be nullified if the city decides to pursue creating its own municipally run power company or if it determines a breach of the agreement has occurred.
