The filing in San Diego Superior Court cites Section 103 of the charter that mentions how a two-thirds vote of the City Council is required to approve a franchise agreement, following “free and open competition” among potential franchisees. Attorney Maria Severson of the Aguirre & Severson law firm says the invitation tilts the playing field toward San Diego Gas & Electric — the current holder of the agreements.
If the invitation is “designed for SDG&E to be the only responsive bidder, then that is usurping the city council’s power because it’s really preventing free and open competition,” Severson said.
A spokeswoman for the Office of City Attorney Mara Elliott said it “will review the complaint and respond through the courts” to the amended lawsuit.
In a franchise agreement, a utility is granted the exclusive use of public rights of way for transmission and distribution, as well as the right to install and maintain wires, poles, power lines and underground gas and electric lines within the city limits of a given municipality.
The current agreement between the city of San Diego and SDG&E has been in existence since 1970 but is set to expire on June 1.
An earlier invitation to bid initiated by former Mayor Kevin Faulconer resulted in responses from just one bidder — SDG&E.
Upon taking office, Gloria announced the bidding process would start over again and on March 19 the new mayor announced terms to attract potential energy companies.
The invitation’s items included a proposed agreement lasting 10 years, with an automatic 10-year renewal if the city deems the partner has complied with all terms and conditions. It also called for a minimum bid of $80 million — $70 million for the electric franchise agreement and $10 million for the gas franchise agreement.
In a change from Faulconer’s plan, once the bids are unsealed, the city and the Gloria administration will continue negotiating with the energy company that turns in the best offer.
Gloria said the length of the agreement is long enough to generate “interest and actually have bidders come forward, but not so long as to lock us into any particular position.”
But with the very real possibility that SDG&E may again turn in the only bid, a bid, a number of environmental and political groups criticized the terms as too lenient toward the incumbent utility. Craig Rose of the Citizens Franchise Alliance called the proposal “a stunning giveaway of billions of dollars.”
As for the lawsuit, it is part of a larger complaint against the city and SDG&E on behalf of San Diego resident John Stump regarding the Pure Water San Diego Project.
The project is designed to reduce ocean pollution and increase the city’s…
Read More: Lawsuit challenges Gloria’s ‘invitation to bid’ on San Diego electric and gas