City Takeover of Electric Utility Raises Concerns for San Diego Taxpayers

Proposal to acquire SDG&E assets comes with massive debt, operational risks, and potential regional impacts.

Apr. 15, 2026 at 10:21pm

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A serene, photorealistic painting of a lone power line pole or electrical substation, its metallic structure and insulators casting long shadows across a sun-dappled urban landscape, conveying a sense of civic responsibility and the gravity of municipal choices.A city's decision to take over its electric utility could have far-reaching financial consequences for taxpayers.San Diego Today

A proposal for the city of San Diego to acquire and operate the local electric utility, SDG&E, is raising serious concerns among taxpayers and fiscal experts. The city's own feasibility study estimates the acquisition costs could range anywhere from $2.4 billion to $7.6 billion, a massive spread that signals potential for cost overruns. Experts warn the plan could saddle the city with billions in new debt, crowd out funding for core infrastructure needs, and potentially shift costs to the broader regional grid customers outside the city.

Why it matters

San Diego already faces a substantial structural budget deficit and an estimated $8 billion in needed infrastructure projects. Layering enormous new electric utility debt onto the city's already strained balance sheet risks crowding out the city's core obligations and worsening its credit ratings, which would lead to higher borrowing costs for all taxpayers. The financial consequences also extend beyond the city's borders, potentially exposing the broader regional grid customers to higher costs and instability.

The details

The city's newly released feasibility study labels the government takeover of SDG&E's electric assets as 'feasible.' However, the study's price tag is not an actual number - it's a huge range that the city's consultant said depends on numerous 'intertwined factors.' This lack of precision is concerning, as public projects rarely land at the low end of early estimates, especially those involving years of litigation, asset valuation disputes or system duplication. When governments borrow at this scale, taxpayers are left paying hundreds of millions or perhaps billions of dollars of interest - irrespective of whether the promised savings ever materialize.

  • The San Diego City Council is about to consider the proposal to acquire and operate the local electric utility.

The players

Mark Kersey

The president and CEO of the San Diego County Taxpayers Association, who served on the San Diego City Council from 2012 to 2020.

SDG&E

The local electric utility that the city is proposing to acquire.

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What they’re saying

“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, President and CEO, San Diego County Taxpayers Association

What’s next

The San Diego City Council is expected to vote on the proposal to acquire and operate the local electric utility in the coming weeks.

The takeaway

This proposal raises serious fiscal concerns for San Diego taxpayers, as the city faces existing budget deficits and infrastructure needs. Experts warn the plan could saddle the city with billions in new debt, crowd out funding for core services, and potentially shift costs to the broader regional grid customers outside the city - consequences that deserve thorough independent review and validation before any irreversible decisions are made.