Protect Our Communities Foundation v. City of San Diego

The California Court of Appeal affirmed trial court orders rejecting challenges to the City of San Diego’s award of gas and electric franchises to San Diego Gas & Electric Company (SDG&E). The appellate court rejected the Protect Our Communities Foundation’s (POCF’s) argument that in the final ordinances approving the franchises, the City improperly changed requirements set forth in the invitations to bid, including by eliminating or modifying requirements for the franchisee to cooperate in good faith to attain the goals of the City’s Climate Action Plan, to eliminate greenhouse gases to the “fullest” extent practical, and to require that the franchisee “not unreasonably oppose or obstruct” mechanisms to support renewable energy. The appellate court concluded that the invitations to bid contemplated that the final ordinances would be “substantially similar”—not identical—to the draft ordinances attached to the invitations. The court found that the record demonstrated that post-bid changes were within the scope of the invitations to bid and that no bidder was misled or disadvantaged. The Court of Appeal also found that POCF failed to meet its burden of showing that SDG&E received an improper advantage because it lacked a constitutional franchise. In addition, the court ruled that surcharges imposed by the ordinances awarding the franchises were not unconstitutional taxes; that the trial court properly severed a two-thirds voting requirement for franchise termination; and that the California Environmental Quality Act did not apply to the ordinances.