At our April meeting, we heard from Haylie Cantiller and Elisa Rodriguez Furey from the San Francisco Public Utilities Commission (SFPUC) and from Tim Redmond from 48 Hills. They are all advocates of San Francisco taking over PG&E’s electrical distribution system. Instead of $800 million in annual profit going to PG&E, that money could go to San Francisco and could pay for municipal services and / or reduce electric rates. Haylie and Elisa presented online, while Tim presented in person.
Among the points raised by the SFPUC presentation, we learned that San Francisco pays PG&E for the use of the distribution grid to deliver its electricity supplies (this is an obstacle for the Clean Power SF program), and that PG&E requirements have obstructed over 187 local projects.
Tim Redmond advocated for San Francisco to begin eminent domain proceedings to take over the PG&E grid. His reasoning is that the California Public Utilities Commission has been dragging its feet on providing a value for PG&E’s assets—the price San Francisco should pay. They (the CPUC) were asked to provide a value in 2021, and have not yet done so. Even if they eventually do come through, PG&E will object to the valuation and take it to court, so why not start the court proceedings now? HANC will be drafting a letter to the City Attorney encouraging him to begin eminent domain proceedings against PG&E. We will print the letter in the HANC Voice.
A few days after the meeting, we asked Elisa (via email), “What steps has San Francisco taken to make public power expansion a reality?” and received this response:
“In early 2019, Mayor London Breed directed the San Francisco Public Utilities Commission (SFPUC) to prepare a preliminary report on electric service options for the City to ensure that San Francisco residents and businesses receive safe, reliable, affordable, and sustainable power. In May 2019, the SFPUC issued a Preliminary Public Power Options Report which found that public ownership of PG&E’s grid in San Francisco would create durable and long-term cost savings and ensure electric service reliability and affordability. Public power expansion would also allow for timely and cost-efficient modernization of San Francisco’s electric grid, which would enable the efficient deployment of cost-effective local electricity sources and storage technologies and help the City electrify more energy uses to reduce reliance on fossil fuels.
“After issuing the Public Power Options Report and conducting a financial feasibility analysis, the City made a $2.5 billion offer to PG&E to own and operate the electricity grid in September 2019. The City reiterated the same offer in August 2020.
PG&E rejected San Francisco’s offer both times, claiming that the offer is substantially below what PG&E believes to be the fair market value of its grid assets in San Francisco. However, PG&E has not provided any analysis or other evidence to support its claim that San Francisco’s offer is too low, nor is PG&E willing to offer or negotiate a higher value.
“In July 2021, the City of San Francisco submitted a valuation petition to the California Public Utilities Commission (CPUC), the state utility regulator. The petition initiated a CPUC proceeding to establish the value for PG&E’s electric assets that serve San Francisco. This proceeding enables transparency, fact-finding and information sharing amongst PG&E, San Francisco, and other stakeholders, and moves the conversation forward to bring the parties together. To date, PG&E has continued to drag it feet and delay providing testimony on the value of the assets.
In addition, The San Francisco Planning Department is currently conducting a public process for environmental review of the City’s potential acquisition of PG&E’s assets under the California Environmental Quality Act (CEQA). The physical changes associated with the project (e.g., physical separation of San Francisco’s purchased assets from PG&E's electric grid outside of San Francisco) will be identified and studied for CEQA.
“The purchase of PG&E’s electric grid would include essentially all of PG&E’s electric transmission and distribution assets located within the City and County of San Francisco. As part of the transfer of assets, certain PG&E facilities outside of San Francisco’s boundaries will need to be physically separated from the facilities that will be owned by the City. The portion of the project requiring new construction or modifications to existing facilities (whether they be PG&E-owned or City-owned) would primarily be in the southern portion of San Francisco and along the San Francisco-San Mateo County border. “
In order for the City to execute a purchase of the grid, the Board of Supervisors would formally vote to adopt the findings of the environmental review, and from there, approve relevant transactions.
Materials related to the environmental review of the project pursuant to the California Environmental Quality Act can be found on SF Planning’s website here. For more information on the City’s Public Power Expansion, use report code 2023-005370ENV when searching SF Planning’s website.