Power San Diego: SDG&E Inflates Costs, Keeps Rates Sky-High

From Power San Diego

Creating a non-profit utility in the City of San Diego deserves serious cost-benefit analysis, said Bill Powers, chairman of the Power San Diego campaign, which is gathering signatures to put creation of a public electric utility on the ballot this November.

“Instead of serious analysis, SDGE has grossly inflated costs and completely ignored the benefits,” said Powers, a licensed electric systems engineer. “The utility seeks the veneer of independent review. But what their paid consultant says in footnotes and attributions is that the key data in their recent report came directly from SDGE, not from the consultant’s own assessments”

SDGE has already invested more than $560,000 in a political action committee to oppose the campaign for a non-profit utility. The utility did not disclose what it paid for this latest report.

…. Power San Diego will present its detailed analysis of San Diego Gas & Electric’s vastly inflated costs of establishing a non-profit at a press conference at noon, Tuesday, March 19th, at 4120 30th Street in San Diego.

The utility’s motive is to discourage the creation of a non-profit utility and protect its monopoly, which posted record profits last year of $936 million. Profits in the City San Diego alone – where the Power San Diego seeks to create a non-profit electric company – exceed $1 million per day.

SDGE typically charges the highest or nearly the highest rates in the nation.

Beyond eliminating the utility’s enormous profits, a non-profit utility in the city would provide significant rate reductions to local utility customers, end the payment of multi-million dollar executive salaries and respect union contracts.

In contrast to SDGE’s self-created estimates of forming a public utility, the City of San Diego has had three independent studies of creating a public, non-profit utility in recent years, including an ongoing $3 million underway by NewGen Strategies and Solutions.

Every component of the City’s independent assessments is significantly lower than SDGE’s:

• SDGE says its assets are worth $4 billion to $4.4 billion; the city’s independent consultant says the assets are worth $2 billion to $2.6 billion.
• SDGE claims separating the City of San Diego from its larger grid would cost $3.2 billion to $4.2 billion; the city’s consultant puts that cost at $254 million.
• SDGE claims startup costs for a new utility could run to $800 million; the city’s consultant says $300 million.

If voters approve the Power San Diego public power ballot initiative, the sale price of SDGE’s assets will be set by negotiation or a condemnation proceeding in the courts.

No accurate assessment of forming a public utility is complete, however, without noting the huge benefits.

“Right now, we’re ‘renting’ the grid from SDGE with our monthly bill payments,” said Craig Rose, a volunteer with the Power San Diego campaign. “But we can own the grid and pay lower rates, if we create a not-for-profit utility. It will be huge win for SDGE customers.”

California is home to more than forty not-for-profit electric utilities, similar to the one proposed for the City of San Diego. The existing public utilities vary widely but share a key characteristic: all charge lower rates than SDGE.

The utility has announced plans to seek rate hikes in the next five years that would raise rates by 50 percent. In addition, SDGE has proposed fixed charges of more than $800 each year for all customers not on discounted rates, including owners of solar rooftop systems who use little or no electricity from the grid.

The proposed new, non-profit San Diego utility would emphasize in-town rooftop and parking lot solar, along with battery storage. This strategy would eliminate huge costs associated with building new transmission lines, which are opposed by many residents and create wildfire and security hazards.

SDGE’s utility’s profits now flow to Sempra Energy, its parent company, which invests billions of dollars in exporting fracked gas, a climate-damaging fossil fuel. These investments are in direct contradiction to local and state policy, which aims to reduce dependence on fossil fuels to relieve the climate crisis.

Power San Diego aims to collect at least 80,000 valid signatures by mid-May to qualify the ballot measure. The campaign has recruited hundreds of unpaid volunteers for its effort.

The Power San Diego campaign is an initiative launched by customers, union supporters, experts and a growing number of environmental and community groups. The campaign encourages utility customers in the City to visit its website – https://wearepowersandiego.com/ – and learn how they can help collect signatures to replace SDGE and create a not-for-profit electric distribution utility in our community.