San Diego Union-Tribune (Sunday)
SHOULD SAN DIEGO CREATE ITS OWN MUNICIPAL POWER COMPANY?
ECONOMISTS NO
The consultant’s projections for a municipal power company vary greatly depending on the underlying scenarios, so there is a significant degree of risk that the project will ultimately leave residents worse off. The transition will involve issuing debt, acquiring assets, and establishing an organizational structure, which will be costly and time-consuming. The consultant’s update in two years should contain a more optimistic forecast if the city is to move forward with this plan.
NO
The idea is good in theory. San Diegans pay the highest electricity rates in the country. Having a municipal electric company without the need to make a profit would help reduce those costs. But aside from the cost of buying SDG&E’S infrastructure, the biggest problem would be whether the operation could be run effectively. While many current employees would stay, others might leave for more lucrative opportunities in the private sector. That may be why recent attempts at municipalization have fallen through.
YES
Unfortunately, because the public utility company seems to be forcing San Diego region residents to pay exorbitant amounts for energy, it might be time to consider alternatives, even if the option is city-run. The public utility company has not been able to successfully manage cost increases, so without another choice, the region will continue to see significant price increases for the foreseeable future.
NO
The purchase price is likely to come in at the high end of the city consultant’s estimate — implying losses and no savings. It would be difficult to extract just the electrical part of the business from the total. The city would show its lack of experience in the complex requirements of maintaining and upgrading the system. In the interim during the lengthy transfer of ownership, there would be little incentive to invest in the distribution system.
EXECUTIVES NO
Not without lots of thought and planning. The private sector, without the weight of public and political intrusion, is much better at managing large projects and providing quality, cost-effective services. Government is about governing, not trash pickup, not construction and certainly not about running huge electric companies. All levels of government should be looking at outsourcing services to the best provider, not bringing them in-house.
NO
A municipal utility solution may seem directionally correct to own transmission infrastructure and enable production competition, but ultimately, extremely cumbersome for an uncertain gain. I’m no fan of SDG&E. I am not sure the city can negotiate a deal, manage competing interests, and maintain the grid successfully. However, the route to a cleaner, cheaper energy future requires incentives and regulation. The city must take action to loosen the transmission stranglehold and enable alternative producers to compete.
NO
Like most cities and bureaucracies, San Diego is illsuited to develop and manage an entity of any kind. SDG&E has supported the entire San Diego business community and is a donor to San Diego’s humanitarian causes. The risk and liability vs. reward are way out of balance; any go vs. no-go question should receive a resounding no! We can’t deal with City Hall and homelessness, now we are going to develop a utility?
NO
The city has enough challenges to deal with right now — aging infrastructure, homelessness, insufficient housing, staffing shortages in public safety and on and on. I don’t think this is the time to replace an experienced public utility, a function the city has no current expertise in. It especially does not make sense given projections of little to no savings in a very long time, if ever.