San Diego Community Power is sitting on over half a billion dollars in its rainy-day savings account but hasn’t yet used any of it to lower rates for its customers.  

They’re banking money in case they must help their customers pay-back its competitor, San Diego Gas and Electric, for energy deals SDG&E made.   

Government agencies like San Diego Community Power – which took over the business of buying and selling electricity from its competitor, San Diego Gas and Electric – often store cash in reserve accounts for emergencies or to show good financial standing to crediting agencies. They’re also allowed to use a chunk of that change to buy-down or lower prices of the service they’re providing – in this case, electricity.  

San Diego Community Power’s prices rose between 9.5 and 14.3 percent this year, depending on the power plan a customer chooses. SDG&E’s rose at least 7.4 percent in January. San Diego Community Power is supposed to provide electricity that’s cheaper or “at least competitive” with SDG&E, according to its bylaws. So far, it has done that. 

But this public energy organization could be doing more to bring prices down.  

Board documents show it’s been a goal of San Diego Community Power to carve-out $70 million of its reserves to stabilize rates since at least June of 2022. The agency still hasn’t done that “because we need to hit our reserve target first,” said spokesperson Jen Lebron in an email Monday.  

But their reserve target keeps changing. When the agency first started serving customers in 2021, their policy was to bank 90 days cash on hand or enough money to cover that many days-worth in expenses. In 2024, the agency changed it again to ensure 180 days’ worth of cash. According to an October treasurer’s report, San Diego Community Power’s reserves topped $533.6 million. 

In December, San Diego Community Power’s governing board voted to bank even more of its customers’ money in the reserve account, ensuring it had at least 180 days-worth but striving to keep 270 days-worth in reserves.  

Why? Its leaders say they’re worried about the future price of a so-called exit fee, a charge SDG&E collects to pay for energy it bought for its customers back when it was a monopoly. Those who call it an exit fee use that term because they feel it’s an unjust cost placed on customers who automatically leave SDG&E for a public power agency. But both types of customers – SDG&E and government-owned power agencies – pay it. 

“The (exit fee), biggest risk that we have. No questions asked,” Lebron said in a Jan. 13 interview. 

The genesis of the exit fee, or as its officially called, the Power Charge Indifference Adjustment: When a group of San Diego cities (cities of San Diego, Chula Vista, Encinitas, Imperial Beach, La Mesa, National City and unincorporated San Diego County) formed San Diego Community Power, the agency automatically inherited all of the customers within its borders away from SDG&E. The exit fee is there to make investor-owned utilities like SDG&E whole for the power plants or long-term contracts for renewables purchased back when the cost of wind and solar was a lot higher than it is now.  

Still the value of the energy the utilities bought years ago, today isn’t worth as much. So to make up the difference, the utilities recoup that through the exit fee.  

A lot of northern government-run energy agencies like San Diego Community Power had to dip into their reserves this year just to keep prices lower than their investor-owned competitors like Pacific Gas and Electric. San Diego Community Power says they’re afraid the same will happen to them.  

“We have to have it in the back of our mind as we’re thinking about ratemaking so we don’t have extreme volatility,” said Karin Burns, CEO of San Diego Community Power in that January interview.  

Evelyn Kahl, chief policy officer and general counsel for CalCCA – a statewide advocacy organization for government-run energy companies like San Diego’s – told me that she doesn’t think Southern California will be hit as hard as Northern California. The reasons have to do with complicated battles Kahl and other attorneys are fighting at the California Public Utilities Commission, which sets the price of the exit fee.  

Jack Fisher, city councilmember of Imperial Beach, was the lone San Diego Community Power board member that raised concerns about the exit fee during the vote to increase the agency’s reserves on Dec. 11.  

“I always thought our reserves was like this big huge pot of money just sitting there for the rainy day,” Fisher said. “And so with new (reserve policy) language talking about it being used to stabilize rates, I think that’s an important part of this policy and something I feel is going to genuinely help our ratepayers in the long run.” 

Clean Energy Alliance, North County San Diego’s government-owned power agency, is offering its customers credits on their bill to help ease the burden of the exit fee on their bills. (Union-Tribune) 

California’s desert areas, including Anza-Borrego, may be ripe for a superbloom after substantial rains and a significant heat-up in temperatures. (Fox 5) 

Homeowners insurance costs are rising so much in the wake of natural disasters in California and other states, they’re threatening home affordability. (Barrons) 

A new study shows climate change has cut U.S. incomes by 12 percent by 2000, driving up cost of living, supply chains and products we buy. (BBC Science Focus) 

West Coast monarch butterfly populations have hit historic lows and may be “the new normal.” (LA Times) 

In more upbeat news, a sea lion caught a ride on a kayaker’s vessel in La Jolla Cove which the kayaker caught on video. (Except, I do wonder whether the presence of a predator in the water would influence a sea lion to do such a thing.) (Fox 5) 

An Escondido citrus nursery owner sued the state of California after the state destroyed thousands of plants after inspectors said they discovered disease-carrying insects. (NBC 7) 

KPBS’ Kori Suzuki has been doing some fine coverage of proposed data centers in Imperial Valley which demand large amounts of electricity and water.  

San Diego County is dedicating money toward fixing some infrastructure in a road that helps generate toxic gases from the polluted Tijuana River. (inewsource)