San Diego municipal power ballot initiative needs signatures following city council rejection

The San Diego City Council on Thursday rejected a proposal to directly add a question to the ballot on whether to municipalize the electric and gas utility in San Diego, a plan that would cost city taxpayers billions of dollars.

The initiative from Power San Diego, a local activist effort launched in November, comes amid high energy prices in the region. The proposal for a ballot initiative would have San Diegans decide if the city will purchase San Diego Gas & Electric’s (SDG&E) distribution assets and run a public-owned electrical utility for the region, pointing to the lower energy rates offered by other public utilities in Southern California, such as the Los Angeles Department of Water and Power. It is a “fully-developed ordinance that could be added to the city code tomorrow,” Bill Powers told the council on behalf of Power San Diego.

However, others oppose the effort fearing the transition would prove more costly and not guarantee lower bills for ratepayers.

“We’re proud to have strong city leaders who stood alongside working families and rejected this dangerous and costly proposed ballot measure,” said Matt Awbrey, spokesperson for Responsible Energy San Diego, a coalition that includes business groups, unions and SDG&E.

Representatives of the local chapter of the International Brotherhood of Electrical Workers also raised concerns with the city council of losing their jobs and not being consulted in the proposal.

“Our input would have highlighted significant risks, including damage to our union retirement plans, wages, job mobility and safety standards,” Nate Fairman, business manager of the IBEW Local 465 chapter, told the council.

Power San Diego maintains that the proposal is not putting union jobs at risk, which received pushback from Council President Sean Elo-Rivera.

“You can’t just tell workers they’re going to be okay,” Elo-Rivera said. “I provided feedback to the proponents of this a while back that you needed to do work with the impacted workers and make sure that they would feel comfortable.”

City Council members did not see fit to have this decided through a ballot initiative, but some expressed interest in funding continued studies. The city’s current proposed budget strips money away from continuing a public power study through NewGen Strategies and Solutions that investigates the potential municipalization of SDG&E’s transmission and distribution assets.

However, the anticipated report has a wider scope than Power San Diego’s proposal, which only includes distribution assets, according to their campaign manager, Dorrie Bruggemann. “It’s a delay tactic,” she said. “We already had two very well done studies that showed that moving to a public utility would save costs.”

Power San Diego estimates the transition would cost $3.5 billion, quoting the Phase 1 feasibility study and an earlier 2020 study conducted on behalf of City Council, also by New Strategies, that priced the municipalization of distribution assets.

Responsible Energy San Diego cites estimates for municipalization that total as much as $9.3 billion in direct costs plus a potential $3.9 billion in lost city revenue. Those figures are based on a preliminary municipalization assessment by Concentric Energy Advisors.

“This debt would be 100% funded through our electric bills and would mean higher costs for all of us,” Awbrey said.

The San Diego City Council will continue to consider municipalization efforts from different approaches.

“… This is a very complex and important issue and I don’t think this is baked enough to go to the voters,” Elo-Rivera said in his closing statement on the proposal, noting that Power San Diego’s initiative could end up on the ballot without city council support.

Following the rejection from the City Council Rules Committee, Power San Diego must get just over 80,000 signatures by the end of May. The group had over 20,000 signatures at the start of April and aims to reach the deadline mid-May.

Some question whether municipalization is the proper way to go to address high bills. 

“When it comes to the rates, that’s not coming out of San Diego, that’s coming out of Sacramento,” said Marc Brown, VP of State Affairs for the Consumer Energy Alliance. According to him, if San Diegans want to see lower rates, “they should call their legislators, they should call their regulators.”

This initiative follows two failed attempts to municipalize utilities in the U.S. last year, from El Paso, Texas, to a referendum in Maine to take over the assets of two investor-owned utilities. 

While Consumer Energy Alliance will generally “oppose municipalization efforts,” Brown said the attempts can still lead to changes for what customers ultimately want.

“In the instance of Maine, there were some leadership changes… and they made investments to shore up reliability,” Brown said, referencing a $30 million federal grant to Central Maine Power for grid enhancements. “I think everyone would agree there were some reliability issues” leading up to the municipalization campaign, he added.