Even if the city of San Diego had to pay $6 billion to buy its power grid off San Diego Gas and Electric, the savings to ratepayers could eventually top $180 million over 30 years of the sale.
That’s what a new study suggests.
Today, the city’s Environment Committee will hear results of an analysis by NewGen Strategies & Solutions, LLC hired to study whether a public takeover of the electric grid is possible – and what it might cost. NewGen studied two basic scenarios, assuming SDG&E would sell its grid at a price tag of $2 to $6 billion. But that’s a range SDG&E would likely dispute.
“We remain confident that once the city has all the facts, they will again arrive at the same conclusion reached in 2021 when they approved the recent franchise agreement: a long-term partnership with SDG&E remains the best option,” said SDG&E spokesperson Anthony Wagner in an emailed statement.
The NewGen report is just the first step in the public power pursuit. The city would eventually have to get permission from entities like the Local Agency Formation Commission, (which recently approved the divorce between water districts), the Federal Energy Regulatory Commission and the California Public Utilities Commission. The estimates on savings to ratepayers also don’t account for costs of an inevitable legal battle over municipalization or inflation.
SDG&E makes money for its investors by building things like poles, wires and transformer stations. Proponents of public power argued that profit should instead be put toward lowering energy prices. San Diegans pay the highest electric rates in the continental United States.
Catch up: After a contentious battle over whether the city should renew its franchise agreement with its investor-owned utility, San Diego eventually signed up for another 20 years with SDG&E. While that dashed public power proponents’ dreams of a full takeover of the local energy grid, a contingent of councilmembers swore to keep the option on the table and put money aside to study what’s called municipalization.