Government Speak

San Diego Gas & Electric paid $100 million for a franchise to deliver power to the city of San Diego just one year ago. It was the second such payment, agreed upon after the first franchise expired. There was only one bidder; which is quite understandable, since SDG&E already had the infrastructure in place and any other bidder would have to purchase that infrastructure from SDG&E if they were to assume the franchise.

The city then formed what it calls a "consumer cooperative," in which the city  purchases power from other producers and delivers it to SDG&E customers over SDG&E power lines, passing a law that forced SDG&E to accept the proposition and set the transmission rates that SDG&E could charge. They also made it automatic that all consumers in the city are automatically enrolled in the "cooperative."

 

Calling something that is owned and operated by the city government rather than by the membership who are consuming the product a "cooperative" is pretty weird. It's actually a form of socialism, but of course the city government didn't want to go down that rabbit hole.

This action, of course, made the franchise worth far less than SDG&E paid for it, but the city government considered that a feature, not a bug. Any time a government can screw a business, it will leap at the opportunity.

So the local newspaper carried a headline on May first, when the "cooperative" went into effect and the franchise was officially breached, "SDG&E Monopoly Ends Today." Monopoly, forsooth.