News Summary
An independent study suggests that a city-operated electric utility in San Diego could save residents billions compared to the current provider, SDG&E. The analysis claims a potential 20% reduction in electricity bills in the first year, with savings exceeding $47 billion over 20 years. Conversely, a city-conducted study indicated significantly lower savings. The findings raise important questions regarding the feasibility of a municipal utility and the financial implications for ratepayers. As city officials remain silent, a second study phase is forthcoming to provide further clarity.
San Diego is facing a potentially significant financial shift as a new independent study posits that a city-operated electric utility could save ratepayers billions compared to the current provider, San Diego Gas & Electric (SDG&E). The analysis claims that residents could see up to a 20% reduction in their electricity bills in the first year, potentially accumulating savings exceeding $47 billion in the first 20 years and soaring to $137 billion over 30 years.
In stark contrast, a city-conducted study from earlier this year suggested a municipal power agency would only yield savings of up to $8 billion over the same 20-year period and a mere $15 billion over 30 years. This substantial difference raises questions about the viability and benefits of pursuing such a municipal utility in San Diego.
The independent study was authored by mechanical engineer and energy advocate Bill Powers and retired engineer and public power advocate Mark Hughes. Powers utilized the internal documents previously withheld by the city, which he obtained through legal action. Soon after the city’s consultant published their findings, Powers expressed skepticism and sought additional data for transparency.
San Diego city officials have refrained from commenting on the independent study as it has not yet been formally submitted for city review. Powers’ legal actions not only recovered the requested documents but also resulted in $15,000 in damages awarded to him.
The new analysis offers a counterargument to previous assumptions posed by consultants at NewGen Strategies and Solutions, suggesting these prior assessments minimized the potential savings for ratepayers. A notable critique was directed at the NewGen report’s assumption of a 3% annual increase in SDG&E rates, while actual projections indicate increases in the range of 8% to 12% by 2027.
Additionally, the independent study argues that the municipal utility would not require taking over certain transmission lines, a move that could reduce costs and streamline the implementation process. The study suggests less aggressive growth estimates in utility distribution costs than were projected in the previous report, allowing for an anticipated $18.7 billion in savings over 20 years.
Concerns regarding non-bypassable charges (NBCs) are also addressed, indicating that a more conservative growth estimation could result in an additional $4.3 billion in savings for customers. Powers and Hughes further contend that financing additional debt for capital distribution projects could amplify savings by another $2.4 billion over the same 20-year timeline.
The report highlights the substantial profits reported by SDG&E, noting a $456 million net income over the first six months of 2025, which marked an 11.5% increase from the previous year. The findings indicated that customers may face nearly $13 billion in payments for new capital projects anticipated from 2025 to 2029, translating to payments of approximately $8,000 to $9,000 per customer.
In addition to offering benefits, some elements of the independent study project unfavorable outcomes for ratepayers, suggesting that asset sales from SDG&E could incur nearly $1 billion in additional costs. Furthermore, debt-service coverage charges may reach $900 million more than earlier estimates.
The analysis posits the notion that the city might have withheld documentation to inhibit a comprehensive independent review of public power options. For over a century, SDG&E has been the sole electricity provider in the region, with franchise agreements renewed multiple times, the most recent being in 2021.
Under the latest agreement, SDG&E is committed to providing $80 million over the next 20 years to the city, in addition to financial contributions aimed at supporting climate objectives. It is worth noting that publicly owned utilities in California typically charge less compared to investor-owned counterparts, with rate differences reaching up to 50% lower on average.
Looking ahead, a second phase of the NewGen study is set to be released later this year, which may provide additional insights into the feasibility and potential savings of a municipal utility in San Diego.
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Additional Resources
- San Diego Union-Tribune: City-run Utility Savings Study
- San Luis Obispo: Local News Source
- CBS 8: SDG&E New Base Service Charge
- Encyclopedia Britannica: Public Utilities
- Times of San Diego: Power Outage Report
- Google Search: City Utility Savings San Diego
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
