The True COST OF A GOVERNMENT
TAKEOVER OF THE ELECTRiC GRID

$9.3 BILLION IN NEW GOVERNMENT DEBT

Full Analysis

The True Cost of Power San Diego

Full Analysis

*Estimates include purchase, separation, reintegration of assets and startup costs

A GOVERNMENT-RUN ELECTRIC GRID IS A Bad Deal for San Diego

Billions in New
Government Debt

A government takeover of the electric grid by the city will cost $9.3 billion or more in new debt. This means higher costs for all of us.
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  • The interest payments alone would be over $400 million a year.
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  • The billions in takeover costs would be 100% debt and 100% funded through our electric bills.
  • It makes no sense to burden taxpayers with billions of dollars in new debt when the City is already facing a $167 million deficit.

City Priorities

The City has its hands full keeping up with basic infrastructure needs like fixing potholes and clearing storm drains. This will only get worse if the City purchases a multi-billion-dollar electric grid and we’ll only end up paying more.
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  • The City should remain focused on addressing critical issues like affordable housing, homelessness, and fixing local streets and roads.
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  • In 2023, a City report found they currently do not have any staff with experience in managing an electric system.

No Plan

Proponents of a government takeover of the electric grid have not presented any plan for how the City will operate the electric utility. 
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  • This initiative does not even require a business plan until a year after the new government-owned utility is formed —no plan, no budget, no governance.
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  • If this initiative passes, there is no turning back regardless of what the final price tag will be.
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  • Under this initiative, the grid would be managed by five Board members chosen at random by drawing names out of a hat with no experience required.
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The Failed History of Government Takeovers of Energy Grids

In 2023, voters in Maine had the question of a government takeover of the energy grid put before them. The proposal would force a multi-billion-dollar acquisition of the state’s two private utility companies – Central Maine Power and Versant – energy grids. The ballot question was brought forward as an attempt to lower electric rates but faced significant opposition from voters. With the $13.5 billion dollar price tag, voters rejected the proposal 69% to 30%.

Maine, (Statewide)

In 2023, El Paso residents were asked to vote on municipalization of the electric grid in what was portrayed as both an effort to switch to clean energy and a response to differing priorities of the Texas state government. However, voters expressed concern with the lack of a completed feasibility study, and the lack of power generation capabilities within city limits. The measure was defeated 82% to 18%.

El Paso, TX

In 2019, The City of Chicago began exploring a government takeover of the power grid, conducting a study to determine feasibility and cost. After determining public power would see a 43% increase in electric rates and would result in billions of dollars of debt, the City abandoned the public power pursuit.

Chicago, IL

In 2006, Boulder’s City Council authorized spending $150,000 to study whether municipalization was physically and fiscally feasible. Over a nearly 15-year period of litigation to identify utility assets and acquisition costs, millions of dollars were spent on analysis and legal fees by the City of Boulder. Eventually, in late 2020, unable to reach an agreement on municipalization terms, Boulder voters approved the new franchise agreement with Xcel and agreed to pause municipalization efforts. The City of Boulder, as of Sept. 30, 2020, has spent approximately $23.9 million on the municipalization project.

Boulder, CO

In 1985 Long Island Power Authority (LIPA) was formed as a state subdivision to acquire the energy grid that served residents of Long Island and a portion of New York City. In 1998 LIPA took on nearly $7 billion in bonded debt to acquire the energy grid from the Long Island Lighting Company. In 2013, LIPA’s residential electric rates were 78% above the national median and commercial rates were 92% above the national median. By 2014 LIPA reported a total debt of $7.6 billion. These ballooning costs and impacts to customers forced the state to pass emergency legislation requiring LIPA to outsource the operations of the energy grid to an investor-owned utility.

Long Island, NY

The Failed History of Government Takeovers of Energy Grids

Long Island

Long ISland, NY

Commercial

Boulder, CO

Commercial

Chicago, IL

Commercial

Maine (Statewide)

Commercial

El Paso

View All Case Studies

The Failed History of Government Takeovers of Energy Grids

1917
LADWP begins to generate and deliver electricity
1923
SMUD is formed to provide power to Sacramento County
See case Study
1985
LIPAwas formed, to acquire part of the energy grid of Long Island and New York City.
1998
LIPA took on $7billion in debt to acquire the energy grid of the Long Island Lighting Company.Rates continued to rise.
2005
Boulder, CO estimates the cost of taking over the energy grid at over $300 million.
See case Study
2011
Boulder, Colorado initiates a government takeover of the energy grid, with $30 million budgeted to begin the process of municipalization.
See case Study
2013
LIPA has a debt of$7.6 billion, and rates that are 78% and 92% above the national median forresidential and commercial users respectively. This massive cost forces theNew York State government to intervene, and day-to-day operations aretransferred to a private company.
2019
The city of Chicago beginsexploring municipalization, conducting a study to determine feasibility and cost.
See case Study
2020
Boulder, CO, after spending$35 million on legal fees and grappling with a prolonged court battle, anticipated municipalization costs soaring beyond $900 million. Faced with these challenges, the city has decided to abandon its municipalization efforts. However, there is no way to recover the lost progress on other city priorities that were overlooked and underfunded during this decade-long,unsuccessful endeavor.
See case Study
2020
Chicago, having determined that the cost of municipalization would see a 43% increase inelectric rates, in addition to billions of dollars of debt, decides to abandon the pursuit.
See case Study
2020
Maine legislators begin exploring the idea of creating a government-run state utility, taking over the energy grid from two private operators
See case Study
2023
Voters in El Paso, Texas, are asked to vote on municipalizing their electric grid. Faced with untold costs, asked to write a blank check, and uncertain how this would address their priorities, they vote against the measure 82% to 18%.
See case Study
2023
Maine voters rejectedthe proposal to pass a blank check for the compulsory acquisition of theenergy grid, 69%-30%

What About Other Government Run Electric Utilities in California?

The two largest government run electric utilities in California, Los Angeles Department of Water and Power (LADWP) and Sacramento Municipal Utility District (SMUD), both got their start over a hundred years ago and were created to specifically construct and grow their electric grids from scratch, when electric grids themselves were still in their infancy.  They did not have to purchase an already-existing grid and learn how to operate it as they went along. Today they have a century’s worth of experience managing their utilities – experience that Power San Diego is promising to replicate in a few short years. They are also organized and staffed by dedicated professionals who are required to be experts in grid management. Illustrating the challenges faced by cities to municipalize, even 100 years ago, the formation of SMUD was approved, via vote, in 1923. Due to litigation and challenges, they did not begin providing electric service until 1946 – 23 years after approval.

About Us

A GOVERNMENT-RUN ELECTRIC GRID THREATENS Funding for Critically Needed Essential City Services

The City of San Diego faces a $989 million deficit for paving local streets and roads

Fixing our Roads and Transit

The City of San Diego faces a $1.6 billion deficit for stormwater improvements

Stormwater Improvements

The City of San Diego faces a $51.7 million deficit for homelessness services

Reducing Homelessness

The City of San Diego faces $235 million deficit for firefighting facilities

Funding for Firefighter Facilities

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responsible energy SAN DIEGO

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DESIGN PLANNING

INTERIOR DESIGN

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responsible energy SAN DIEGO

responsible energy SAN DIEGO

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responsible energy SAN DIEGO

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DESIGN PLANNING

INTERIOR DESIGN

who we are

Responsible Energy San Diego is a coalition of like-minded San Diegans united against a reckless initiative to force a $9.3 billion government takeover of San Diego’s electric grid.

San Diego & Imperial Counties Labor Council
San Diego Regional Chamber of Commerce
Asian Business Association San Diego
International Brotherhood of Electrical Workers (IBEW) Local 465
San Diego Municipal Employees Association
AFSCME Local 127
San Diego City Firefighters, IAFF Local 145
County of San Diego Black Chamber of Commerce
San Diego Building and Construction Trades Council
San Diego County Hispanic Chamber of Commerce
LiUNA Local 89
Cleantech San Diego
Building Industry Association of San Diego
San Diego Working Waterfront Group (formerly the Port TenantsAssociation)
Otay Mesa Chamber of Commerce
California Restaurant Association San Diego Chapter
San Ysidro Improvement Corporation
Downtown San Diego Partnership
San Diego North Economic Development Council
San Diego County Lodging Association
United African American Ministerial Action Council
Black American Political Association of California - San Diego Chapter
Joseph Jingoli & Son, Inc
AM Ortega Construction
4Liberty
VetSource
Osceola Consulting
Pangea Biological
Unite Here Local 30
San Diego Gas & Electric

Empty Promises,Untold Costs

Local activists are trying to force the City of San Diego to take over the power grid with no plan or guarantee to lower electric bills.

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Costly Gamble

The Power San Diego initiative is acostly and uninformed proposal that would put taxpayers on the hook forbillions of dollars in debt with no guarantee of lower electric bills.

  • Power San Diego has provided no concrete analysis on the full cost of a government takeover of the energy grid – which will likely be many billions of dollars.
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  • It makes no sense to burden taxpayers with billions of dollars in new debt when the City is already facing a $1 billion deficit.
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  • No data or research exists to show electric bills would be reduced under Power San Diego’s initiative.
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Jeopardizes City Priorities

The cost to the City of buying and operating a complex electric utility could jeopardize funding and resources for programs addressing critical issues facing San Diego.

  • The City already has its hands full addressing critical issues like affordable housing, homelessness, and fixing local streets and roads – they should remain focused on these important issues.
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  • The City currently does not have any staff with experience in managing, operating or maintaining an electric system.
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Blank Check

The Power San Diego initiative gives unelected political appointees a blank check that will put taxpayers on the hook for several billions of dollars in new debt.

  • Voters will not have another opportunity to weigh in even though no one knows what the final price tag will be.
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  • The Power San Diego initiative describes a leadership board that does not require any experience in managing San Diego’s energy grid – choosing those in charge at random by drawing names out of a hat.
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  • This unelected board would run the City’s energy grid with little to no oversight from the city or voters, unlike other public utilities.
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(+123) 6378 9078 990
Paid for by Responsible Energy San Diego;
Ad Committee’s Top Funder San Diego Gas & Electric Company
Funding details at www.sandiego.gov/donors