The growing frustration with investor-owned utilities
Across the country, people are growing increasingly fed up with the high rates, poor service, and lack of progress on clean energy transition that often comes with investor-owned utilities. In cities and states from San Diego to New York, grassroots groups and elected officials are launching campaigns to take back control of their power infrastructure through public ownership.
The impetus for these municipalization efforts is clear. San Diego residents pay some of the nation’s highest electricity rates, with over a quarter of customers behind on their payments. The city’s investor-owned utility, San Diego Gas & Electric (SDG&E), attributes these high prices to the costs of wildfire prevention, transmission line construction, and other clean energy investments. But takeover advocates say a public, nonprofit model could save residents 20% on their utility bills by eliminating the need to provide shareholder returns.
“Across the country, people are talking about public ownership of energy,” said Sarahana Shrestha, a New York state assembly member who co-sponsored a bill to create a public power authority in the Hudson Valley. “If we want a just transition — taking care of workers, and making sure that it’s affordable and brings benefits back into communities — there’s no effective way of doing that while you’re still answering to shareholders.”
Battling deep-pocketed opposition
The road to public power is never easy, however. Investor-owned utilities have deep pockets and a vested interest in preserving their monopolies. In San Diego, SDG&E has contributed over $700,000 to a political action committee fighting the municipalization effort, more than twice what the pro-public power group Power San Diego has raised.
This dynamic played out in Maine as well, where political action committees backed by the state’s two largest investor-owned utilities received 34 times more money than public power advocates. Activists say this allowed the utilities to run a robust campaign of advertising and misinformation to defeat a 2019 referendum on a state takeover.
Utility trade groups and consultants have also deployed similar tactics in other cities. In San Diego, SDG&E hired the same firm that helped defeat the Maine effort, Concentric Energy Advisors, to estimate the cost of a public takeover at $9.3 billion – nearly three times the $3.5 billion estimate from a city-commissioned study.
Finding paths to public power
Despite the steep odds, public power movements are gaining momentum in several cities:
San Diego
In San Diego, the Power San Diego coalition gathered over 30,000 signatures to force the City Council to consider putting a public takeover measure on the ballot. Though the council has rejected similar proposals twice before, the group aims to build a broader base of political support to overcome skeptical council members.
Rochester, New York
In Rochester, public power advocates want the city to evaluate the costs and benefits of creating a municipal utility. Their push comes as state lawmakers in New York have introduced a bill to create a public power authority to buy out Central Hudson Gas & Electric, a utility that has faced criticism for high rates and billing issues.
San Francisco
San Francisco is working with state regulators to determine a fair price for buying out Pacific Gas & Electric’s distribution grid, with the goal of establishing a citywide public power system.
Hudson Valley, New York
New York Assemblymember Shrestha and State Senator Michelle Hinchey have introduced a bill to create the Hudson Valley Power Authority, a public entity that would purchase Central Hudson Gas & Electric. The authority would aim to lower rates, improve service, and speed the green transition while protecting workers’ rights.
Pueblo, Colorado
In Pueblo, a grassroots “Bring Power Home 2020” campaign has pushed the city council to hold a referendum on whether to ditch the current investor-owned provider, Black Hills Energy, in favor of public ownership.
Victories are not guaranteed, as the Decorah, Iowa campaign to municipalize found out in 2018. But the growing momentum shows that communities are increasingly unwilling to accept the status quo of high-cost, fossil-fuel dependent utilities run for the benefit of distant shareholders rather than local residents.
The potential of public power
Public ownership offers several key advantages over the investor-owned utility model:
-
Lower rates: Studies have consistently found that publicly owned utilities charge lower rates than private, for-profit providers. In San Diego, the city-commissioned analysis estimated 13-14% annual savings for customers if the city took over the utility.
-
Faster clean energy transition: Without the need to maximize profits for shareholders, public power entities can more readily invest in renewable energy infrastructure and pass those savings on to customers. Five of the utilities that have already achieved 100% renewable energy are publicly or cooperatively owned.
-
Community investment: The profits from a public utility can be reinvested back into the community, rather than extracted by distant shareholders. This allows for more equitable rate structures, energy efficiency programs, and other initiatives that benefit local residents.
-
Democratic control: With public ownership, the community has a direct voice in decisions around energy sources, infrastructure investments, and rate-setting through elected utility boards or city councils.
As the devastating impacts of climate change become ever more apparent, and the failings of profit-driven utilities are laid bare, the movement for publicly owned, community-controlled power is poised to gain even greater momentum. By taking back control of their energy infrastructure, cities and states can ensure a just, affordable, and sustainable energy future.
Resources for getting involved
Want to get involved in the fight for public power in your community? Here are some helpful resources:
-
Joint Action for Water: Our organization supports grassroots efforts to ensure universal access to clean water and sanitation. We offer guidance, networking, and advocacy support for community-based initiatives.
-
The Next System Project: This nonprofit think tank provides in-depth analysis and case studies on the growing public power movement across the U.S.
-
Energy Democracy Alliance: This national network connects local groups working to transform the energy system through public, community, and cooperative ownership models.
-
Institute for Local Self-Reliance: ILSR’s initiatives include a Public Power program that assists municipalities in exploring and implementing public ownership of electric utilities.
Together, we can build a more just, sustainable, and democratically-controlled energy future. Get involved today!
