San Diego won a crucial lawsuit concerning its franchise agreement with San Diego Gas & Electric (SDG&E) earlier today. The Protect Our Communities Foundation filed the case, which threatened a $3-billion hole in the city's budget. City Attorney Mara Elliott pointed out that such an outcome would have been severely damaging for San Diego taxpayers. According to a press release, she praised the court's decision as an "extremely positive outcome."
Superior Court Judge Katherine Bacal confirmed the city followed appropriate competitive bidding processes. Consequently, she ruled the city wouldn't need to re-bid the agreement. As per the City Attorney's assertions in the press release, she endorsed the franchise agreement and stated the franchise fees as non-taxable.
With this legal victory in hand, San Diego stands to obtain approximately $130 million annually in franchise fees for the agreement's remaining term. This could potentially materialize into an estimated sum of $3 billion. Furthermore, should SDG&E violate the agreement terms, the decision gives the city more freedom to act. The ruling also sets aside $30 million towards advancing the city's climate equity goals.
The franchise agreement allows SDG&E exclusive public rights of way use for electricity and gas transmission and distribution. In return, the company gains the privilege to install and maintain wires, poles, power lines, and underground gas and electric conduits.
Assistant City Attorneys Travis Phelps, Leslie Fitzgerald, Jean Jordan, Chief Deputy City Attorneys Tyler Krentz and Corrine Neuffer with Senior Deputy City Attorney Fritz Ortlieb skillfully defended the complex lawsuit. Elliott thanked the legal team for their tireless work. She emphasized the franchise revenue's importance in sustaining city operations such as street and sidewalk maintenance, parks operation, library services, and other essential city functions.
This resounding decision indicates the importance of climate equity goals in city planning and how legal proceedings can influence these objectives. The legal battle San Diego faced with The Protect Our Communities Foundation displays meaningful implications for the city's budget, residents, and commitment to battling climate change. As per Elliott's statement in the press release, the court's ruling preserves the city's financial stability and reinforces its support for essential operations and climate actions.
