Today, with San Diego’s current budget woes, it’s more important than ever to do a deep dive on ideas that carry hidden financial consequences. It’s crucial that policymakers analyze budgets, plan for long‑term obligations, and evaluate whether idealistic-sounding proposals are truly affordable, not just politically attractive. Leaders must conduct this due diligence before making decisions that will have an irreparable effect on the region.
City of San Diego councilmembers are about to consider a proposal to acquire and operate the local electric utility — a decision that would commit taxpayers to billions of dollars in new debt, decades of operational risk and financial consequences that will extend far beyond City limits.
The city’s newly released feasibility study labels this government takeover of SDG&E’s electric assets as “feasible.” But fiscal responsibility requires a standard that is more than just plausible feasibility. It requires precision, transparency and a clear accounting of who ultimately bears the risk when projections fall short.
This proposal for the city of San Diego to become our electric utility raises serious and profound concerns because the city’s past is littered with mistakes in judgment.
First, the study’s price tag is not an actual number — it’s a huge range that the city’s highly-paid consultant said depends on numerous “intertwined factors.” This sounds a lot like the city’s trash fee debacle, but on a much larger scale.
The city’s own analysis estimates acquisition costs anywhere between $2.4 billion and $7.6 billion. Estimates will undoubtedly climb once all costs, such as system separation, wildfire mitigation and transition costs, are more accurately accounted for. A multi-billion‑dollar spread is not a planning tool; it’s a warning sign. History shows that public projects rarely land at the low end of early estimates — especially those involving years of litigation, asset valuation disputes or system duplication. San Diegans will never benefit from this scheme.
When governments borrow at this scale, taxpayers are left paying hundreds of millions or perhaps billions of dollars of interest — irrespective of whether the savings being promised today ever materialize.
Second, this misguided proposal collides with the city’s existing fiscal reality.
San Diego already faces a substantial structural budget deficit and an estimated $8 billion in needed infrastructure projects. Roads, stormwater systems and public facilities remain massively underfunded, even as borrowing costs rise statewide.
Layering enormous new electric utility debt onto the city’s already strained balance sheet risks crowding out the city’s core obligations. Credit ratings are not theoretical. If they worsen, taxpayers pay more — across every capital project — for years to come.
This is not speculation. It is how public finance works.
Third, the financial consequences do not stop at the city’s borders.
The electric grid serves the entire San Diego region, not a single jurisdiction. Major investments in infrastructure and wildfire protection were made to serve and benefit all customers. The city’s consultant wants us to believe that if San Diego exits the system, the remaining obligations shift to the rest of the county’s taxpayers, and that the city is somehow not responsible for these costs — even though there is ample precedent that the city would in fact be on the hook.
San Diego County taxpayers who do not live in the city, and who have no vote in this decision, should not be exposed to higher costs and financial instability as a result of an irresponsible policy choice.
We have seen this problem in other regional utilities, where cost‑shifting disputes led to years of litigation and higher bills for customers who never asked for change.
Finally, taxpayers deserve proof, not assurances.
Recent history should give everyone pause. In multiple cases, cost estimates presented to the public were later proven incomplete or inaccurate, leaving residents with higher bills and fewer options once commitments were made.
No one in San Diego is opposed to lowering energy costs. We wholeheartedly support that goal. However, we are opposed to making irreversible financial decisions based on assumptions that have not been independently validated, stress‑tested and clearly explained.
Before the City takes another step, taxpayers deserve:
A single, all‑in cost estimate — not a huge multi-billion-dollar range Proper quantification of all costs Independent financial validation Clear protections if costs escalate A transparent explanation of municipal and regional impactsPublic dollars demand public discipline.
Feasibility is not enough. Responsibility means ensuring that today’s policy choices do not become tomorrow’s taxpayer burdens — predictably, expensively and for decades to come.
Mark Kersey is the president and CEO of the San Diego County Taxpayers Association. He served on the San Diego City Council from 2012 to 2020.
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