Navy, SDG&E; Head for Showdown on Power Generation

The U.S. Navy and San Diego Gas and Electric apparently are headed for a Dec. 1 showdown on the Navy’s proposal to build an electric-generation system for its San Diego bases, a move that would sever its electric ties to SDG&E.;

Electric rates for remaining customers would rise by $40 million annually if the Navyweighs anchor and produces its own electricity and steam, according to the utility.

The Navy will soon have in hand a cost-effectiveness study of the proposed project, according to a Navy spokesman. That study could be unveiled at a Dec. 1 meeting between SDG&E; and the Navy.

SDG&E; on Friday reiterated its earlier proposal to provide the Navy with “competitive” electric rates that would “equal or beat” savings to be generated by the string of cogeneration plants that the Navy is considering at its bases on San Diego Bay.

However, the Navy spokesman characterized the Dec. 1 meeting as “the latest in a series of meetings being held to clarify various aspects of SDG&E;’s proposal regarding future electric service to the Navy in San Diego.”

“It’s premature to characterize the meeting as a decision date,” according to an SDG&E; spokesman. “We’ve both got more work to do.”