Group wants to oust SDG&E and form a municipal utility by getting a petition on the November 2024 ballot

A recently formed political action committee is about to launch a signature drive to get a proposal on the November 2024 ballot that would ask voters to replace San Diego Gas & Electric with a publicly owned municipal utility that would serve customers within the city limits of San Diego.

The Power San Diego Campaign needs to collect a little more than 80,000 signatures from registered San Diego voters by May in order to place its petition on the ballot. The group will start gathering signatures next month.

“The only way for us to be able to craft our own destiny as a city in both controlling our electric rates and coming up with the most cost-effective, smartest, innovative decarbonization clean energy plan is to have local control of the electric power utility,” said Bill Powers, the campaign’s chair. “Without that local control, we do not control our destiny.”

If the petition makes it to the ballot and then gets approved by voters, it would create a municipal power company that would handle the electricity distribution responsibilities for customers in San Diego, ousting SDG&E.

Powers estimated it would cost San Diego taxpayers roughly $3.5 billion to create the public utility in order to buy out SDG&E’s electricity distribution assets — plus associated metering and startup costs. As envisioned by Power San Diego’s backers, the price tag would be paid through a municipal revenue bond.

“Yes, $3.5 billion sounds like a big number and it is,” Powers said. “But we’re paying SDG&E now for those assets,” likening the proposal to a homeowner refinancing a home loan at a lower interest rate, “where you’re spreading this cost over 30 years.”

Powers predicts making the switch would result in city of San Diego customers seeing their electricity bills drop by about one-fifth.

“This would be a nonprofit entity,” he said. “So roughly speaking, just out of the gate by the elimination of profit, the rates would drop about 20 percent.”

Power San Diego would be directed by a five-member board monitored by a Citizens Oversight Committee. Powers said San Diego’s mayor would be responsible for qualifying potential board members, who would then be selected from a pool of candidates.

Not surprisingly, officials at SDG&E oppose the plan.

“We are confident SDG&E remains the best option for San Diego customers, given our outstanding safety record, climate innovation and unmatched reliability,” SDG&E spokeswoman Helen Gao said in an email. “Pushing a ballot measure without a thorough assessment of the financial implications to the city and taxpayers is ill-advised and puts at risk billions of tax dollars, along with the safety and reliability of the power grid.”

Power San Diego says the potential municipal utility expects to fill most of its positions with former SDG&E staff and would “welcome union representation and pay employees compensation and benefits equal to or better than those in their current collective bargaining agreements.”

But the union representing about 1,500 SDG&E workers is dead-set against it.

“It’s really a gamble for our members,” said Nate Fairman, business manager for IBEW Local 465. “To push this ballot initiative forward is I think uneducated, it’s misguided and it’s the wrong initiative at the wrong time.”

The San Diego & Imperial Counties Labor Council, AFL-CIO is also opposed.

Powers brought the proposal to the San Diego City Council earlier this year but in September, all four members of the Environment Committee took a pass on putting the initiative on the ballot.

The city has already hired a consulting firm to look at the feasibility of creating a municipal utility. Colorado-based NewGen Strategies & Solutions in July made a preliminary estimate of potential 14 percent savings on the electric delivery portion of customer bills. The consultant will take a deeper dive into the numbers when it comes back to the council with Phase 2 of the study in the summer of 2025.

“We must get much more detailed data in terms of costs, expenses, liability (and) revenue projections,” Councilmember Jennifer Campbell said after listening to Powers’ presentation, saying “it is way too premature” for the 2024 ballot.

Powers said Power San Diego’s leadership can’t wait that long.

“Our electricity prices are the highest in the nation and they are on a steady ramp upward, (with) no end in sight,” Powers said.

Reports compiled by the U.S. Bureau of Labor Statistics consistently show the average electricity price per kilowatt-hour in San Diego is the highest in the country. In September, the San Diego region came to 47.5 cents, with urban Hawaii in second place at 41.5 cents.

Supporters of publicly owned utilities point out that the Sacramento Municipal Utility District and the Los Angeles Department of Water and Power offer customers lower rates than California’s investor-owned utilities — SDG&E, Pacific Gas & Electric and Southern California Edison.

But LADWP and SMUD were established decades ago (SMUD in 1946 and LADWP started electricity service in 1917) when energy infrastructure covered less territory and was much less expensive.

Municipal startups have a checkered recent history. The Power San Diego Campaign touts that about 20 not-for-profit electric utilities have been formed across the country in the last 20 years.

But in 2020, Chicago considered creating a municipal utility but then-Mayor Lori Lightfoot dismissed the idea after cost estimates came in at $5 billion to $10 billion. The same year, voters in Boulder, Colorado, ditched a decade-long effort to replace the city’s existing utility Xcel with a municipally-run power company.

Critics of the two largest electric utilities in Maine gathered enough signatures to put forth a referendum before the state’s voters to replace the power companies with a nonprofit utility. But earlier this month, the initiative lost soundly at the polls, 69.8 percent to 30.2 percent.

Powers said the Power San Diego Campaign is an all-volunteer effort, with a steering committee of about six to eight members. The campaign projects a minimum budget of about $200,000 to pay for the signature drive and has raised about half that amount so far.

Powers is a familiar figure in energy and utility-related circles, serving a board member of the Protect Our Communities Foundation. He said the Power San Diego Campaign has no affiliation with the Protect Our Communities Foundation.