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Study warns city against takeover of SDG&E services

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Posted at 5:14 PM, Apr 27, 2021
and last updated 2021-04-27 20:25:05-04

SAN DIEGO (KGTV) — There is a push for the city to buy SDG&E's infrastructure and take over as the gas and electric company, but a new study is warning city officials to not make that move.

“As utility workers we understand risk, what we don't understand is taking on a high risk proposition with zero upside,” said Nate Fairman, business manager for IBEW 945, which represents 2,900 utility workers in San Diego and Imperial County.

Fairman's referring to the findings of a new study by Point Loma Nazarene University commissioned by the San Diego & Imperial Counties Labor Council and the Regional Chamber of Commerce, of which SDG&E is a member.

The study says it's a bad financial move for the city to do what some groups are calling for -- and what some council members want to explore -- taking over for SDG&E.

The study calls it municipalization, which would entail the city buying up SDG&E’s infrastructure and taking over gas and electric services. The study says it would cost the city $8.9 billion, more than double its projected budget for 2021-22 fiscal year.

SDG&E and the city are currently negotiating a 10 year deal with a potential 10 year option.

The study says running a utility would cost the city $1.7 billion a year, while workers could face pay cuts and lose key retirement benefits.

“There's no guarantees, as we know in the labor world. We usually have to fight for everything that we get,” said Keith Maddox, Executive Secretary Treasurer, San Diego & Imperial Counties Labor Council

Those in favor of the city exploring municipalization say SDG&E charges extraordinarily high rates, and take aim at its wildfire and solar power policies.

“The city needs to do its own study to show what the real benefits and opportunities are, not rely on just one study that was done for special interests,” Matthew Vasilakis, co-director of Climate Action Campaign

Point Loma Nazarine Chief Economist Lynn Reaser stood by the study's findings, saying the results would be the same no matter who funded the work.

In a statement, SDG&E said, ”We look forward to reaching an agreement with Mayor Gloria that meets the city of San Diego’s climate and energy goals.”

Maddox declined to release the cost of the study.