July 24, 2024

Activists pushing for San Diego to take over the city’s investor-owned utility are not letting last year’s defeat of a similar effort in Maine deter their goal of establishing a nonprofit power company. They recently submitted petitions containing more than 30,000 signatures from residents who want the City Council to let voters decide this fall.

Advocates say a municipal takeover of San Diego Gas & Electric would deliver cheaper rates and a faster, more affordable and more equitable transition to clean energy. Still, the measure faces long odds from skeptical council members who have twice rejected similar proposals.

The campaign is the first public ballot initiative since 70 percent of Maine voters reject a proposal to take over the state’s two largest utilities. A group called Power San Diego delivered several cardboard boxes full of petitions to the San Diego City Registrar’s Office on May 14. If just over 24,000 of the signatures on those documents are deemed valid, the Council will have to decide whether to put the question to voters in the next election.

What’s happening in Southern California reflects growing frustration with the high rates and lackluster service that investor-owned utilities often provide and a desire to accelerate the green transition. Similar campaigns are underway in Rochester, New York and San Francisco, and Empire State lawmakers recently introduced a bill to central Hudson Gas & Electric and create a public power authority.

“Across the country, people are talking about public ownership of energy,” Sarahana Shrestha, a member of the New York State Assembly who is co-sponsoring the bill, told Grist. “If we want to have a just transition — to take care of workers and make sure it’s affordable and brings benefits back to communities — there’s no efficient way to do that while still answering to shareholders.”

San Diego residents pay of the country’s highest electricity ratesand according to one estimate, more than a quarter of customers are behind with their payment. (The aid program attributed its high rates to the cost of everything from prevention of wildfires for the construction of transmission lines and other clean energy infrastructure.) Takeover advocates say the move would save residents 20 percent on their utility bills because a not-for-profit model eliminates the need to provide shareholders with a return. It estimates the cost at $3.5 billion, citing a study commissioned by the city last year.

That analysis found that the utility’s 3.7 million customers could save 13 to 14 percent annually if the city bought the utility’s network assets for $2 billion and created a municipal utility. However, the math is less favorable as the cost of the buyout rises; At a price of $6 billion, taxpayers could face additional costs of $60 million over the first decade, but see long-term savings after 20 years.

San Diego Gas & Electric vehemently opposes the effort and has backed it the political action committee Responsible Energy San Diego to block it. The organization calls itself “a coalition of diverse San Diego leaders” fighting “a reckless ballot initiative to force a government takeover of the energy grid.” The utility has contributed more than $700,000 to the committee, according to records on the San Diego Ethics Commission website.

That’s more than twice Power San Diego has raised and reflects a dynamic in which political action committees are supported by Maine’s two investor-owned utilities. Received 34 times more money as advocates of public power. Activists there say it has allowed the utilities to finance a robust campaign of advertising and misinformation defeat the referendum.

San Diego Gas & Electric hired Concentric Energy Advisors, the same consultants that helped defeat the effort in Maine. The company’s study commissioned by the San Diego utility estimates the cost of a public takeover of the network at $9.3 billion.

Matt Awbrey of Responsible Energy San Diego told Grist the city should address other priorities such as affordable housing rather than a proposal “to create a new state-run utility that has no plan, budget or verifiable cost estimates.” He said the cost of the takeover would likely “bring higher taxes, higher electric bills and/or cuts to essential city services we all depend on”.

Power San Diego planned to collect 80,000 signatures by July, which would have put the proposal on November’s ballot. But it lacked the funding for such an effort and decided to seek 30,000 signatures, or about 3 percent of registered voters. That would require the city council to vote on whether to put the matter before voters.

Dorrie Bruggeman, senior campaign coordinator for Power San Diego, doesn’t expect the council to do that; it has already rejected such a proposal on two occasions, with councilors asking for more details on costs and projected revenue. Board President Sean Elo-Rivera is among those with reservations.

“I have no love for corporate monopolies that line the pockets of everyday working people,” he said the local news paper La Jolla Light. “But it’s a very complex and important issue and I don’t think it’s baked enough to go to the voters.”

Regardless of any concerns the council may have, Bill Powers, chairman of Power San Diego, said his organization has sparked an important discussion in the community and fueled voter engagement on the issue. The next step is to get policy makers behind the idea.

“If we can get some councilors who are open to public power, if we can get a mayor who is open to public power, which we have had in the past, then the movement is not dependent on the end of a ballot initiative,” Powers said.

Such campaigns are gaining momentum elsewhere. Proponents of public power in Rochester, New York, want evaluate the city the costs and benefits of a municipal utility. In San Francisco, city officials are currently working with the California Public Utilities Commission determine how to set a fair price for Pacific Gas & Electric’s distribution network, hoping to create a citywide public power system.

On May 17, New York Assemblywoman Shrestha and State Senator Michelle Hinchey introduced a bill to create the Hudson Valley Power Authority, a public power entity that would buy out Central Hudson Gas & Electric. The utility has criticized for its high rates and a string of billing failures since 2021. If the measure passes, the Hudson Valley Power Authority would seek to lower rates, improve service and speed the green transition while protecting labor rights.

Joe Jenkins, Central Hudson’s director of media relations, told Grist that the proposed takeover would involve “significant hidden costs, loss of jobs and loss of tax revenue for towns and schools,” adding that municipal utility rates in New York are almost 9 percent more expensive than those of investor-owned utilities.

Shrestha said the legislation reflects her constituents’ growing interest in public power. Her office has hosted seven town halls to discuss energy democracy in the past year. “People are so fed up with getting bills that are inconsistent and late,” she said. “People are really excited about learning how we can get real public power.”

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