San Francisco, CA —The City and County of San Francisco submitted a petition today with the California Public Utilities Commission (CPUC) requesting a formal determination of the value of PG&E’s local electric infrastructure, the next step in San Francisco’s efforts to acquire the utility’s city-based electric facilities and complete the City’s transition to public power. 

Owning the grid would allow San Francisco to provide clean, reliable and affordable electricity throughout the City while also taking meaningful climate action, like reaching its set target of using 100% renewable electricity by 2025. Controlling energy use and delivery would also allow San Francisco to ensure equity in electric service and workforce development while providing transparency and public accountability in rates, service and safety.

The move comes after the City made a $2.5 billion offer in 2019 to purchase PG&E’s local electric assets following years of the investor-owned utility’s failure to provide reasonable, safe, and cost-effective service to its ratepayers. The City resubmitted its offer when PG&E emerged from bankruptcy in 2020. PG&E rejected both San Francisco purchase offers, and in the last year has begun seeking to impose more than $1 billion in unnecessary charges on City customers while delaying basic power hookups on a range of public buildings from schools to new transit projects.

“San Francisco is ready to transition to full public power, and today we are asking the CPUC to determine a fair price that will allow us to move forward with the acquisition of our local power grid,” said Mayor London Breed. “It’s been clear for a long time that full public power is the right choice for our City and our residents, and we know we can do this job more safely, more reliably, and more cost effectively than PG&E. It’s time for everyone in the City to have access to clean, reliable, affordable public power.”

Mayor London Breed announced the City’s valuation request at an event at Zuckerberg San Francisco General Hospital, which for decades has relied on the San Francisco Public Utilities Commission (SFPUC) to provide clean, safe, reliable, and affordable power for its critical facilities and has been instrumental in the City’s widely lauded COVID-19 pandemic response. The hospital is also the site of a major joint research and academic facility with the University of California San Francisco, whose construction was delayed by PG&E’s intransigence, driving up costs by an estimated $30,000.

San Francisco’s local elected leaders remain united behind the transition to public power, all of whom have urged PG&E to reconsider the City’s acquisition offer. Mayor Breed was joined by State Senator Scott Wiener (D-San Francisco), City Attorney Dennis Herrera, Board of Supervisors President Shamann Walton, San Francisco Public Utilities Commission President Sophie Maxwell and community advocates. In addition to having the support of City and local officials, transitioning to public power has public support; a 2019 poll found that nearly 70% of San Franciscans support switching to public power.

In the valuation petition filed today by City Attorney Dennis Herrera, the City asks the CPUC to determine the just compensation to be paid for PG&E’s electricity distribution assets that serve San Francisco. State law gives the CPUC the authority to set definitive valuations for utility assets. San Francisco’s petition also proposes a process for the Commission to assess the value of PG&E’s electric facilities.

“San Francisco has been a reliable public power provider for more than a century. PG&E is the poster child for a utility that puts profit ahead of people. San Franciscans have had enough,” said City Attorney Dennis Herrera. “This proposed acquisition makes sense for San Francisco, it makes sense for PG&E’s other customers, and, quite frankly, it makes sense for PG&E. San Francisco is offering billions of dollars that could be used to pay fire victims and keep PG&E from sticking customers with rate hikes. San Francisco made a very fair offer to buy PG&E’s local assets. PG&E refused. Now we’ll use an impartial process to set the definitive value of this infrastructure so we can move forward.”

“The current relationship between San Francisco and PG&E is untenable. For years, San Franciscans have paid the price for PG&E’s service delays and cost overruns, with terrible impacts on public facilities across the City, from schools and homeless shelters to affordable housing and recreational facilities,” said Senate Scott Wiener (D-San Francisco). “This has never been acceptable, and it’s getting worse. It’s time for the City to reconsider its options for getting out from under PG&E’s corporate monopoly, and I urge the CPUC to act quickly to provide a fair valuation of PG&E’s assets so this acquisition can move forward.”

San Francisco has demonstrated its effectiveness as a local power provider for more than 100 years, delivering clean, reliable hydropower from Hetch Hetchy Power to customers like the San Francisco International Airport, the San Francisco Zoo, and Zuckerberg San Francisco General Hospital. Hetch Hetchy Power employs hundreds of highly skilled, locally-based union workers throughout the SFPUC operations area, which stretches from the Sierra Nevada mountains to the Pacific Ocean. The SFPUC’s CleanPowerSF program also purchases renewable power for over 370,000 homes and businesses. Collectively, the two programs provide more than 70% of the electricity consumed in San Francisco.

San Francisco has also set a goal of shifting to 100% renewable electricity by 2025 and 100% renewable energy by 2040—a target that will be easier to achieve if San Francisco had local control of its power grid. San Francisco would use bonds secured by future revenues from electricity generation to acquire PG&E’s infrastructure, so no funds for existing City services, like affordable housing, libraries or addressing homelessness, would be affected.

“Our public power and utility system has proven itself over more than a century, and the City is prepared to begin managing the rest of our local grid. The Board of Supervisors unanimously supported our original offer in 2019, and city leaders continue to believe public power is in the best interest of San Francisco,” said Board of Supervisors President Shamann Walton. “San Francisco has always had the right to full public power, and we are committed to make it a reality.”

In today’s valuation request, the City outlines a long list of reasons for pursuing today’s petition, noting PG&E’s ongoing failure to provide adequate service to both the City’s utility and individual ratepayers, resulting in years of disrupted services and millions of dollars in unnecessary costs. In one recent case outlined in a new white paper produced by the SFPUC, PG&E has pushed for the City to pay as much as $1 million per streetlight connection for a series of unneeded upgrades.

More information on projects facing delays can be found at OurCityOurPower.org. The petition also notes that the CPUC itself has described PG&E’s recent safety history as ranging “from dismal to abysmal,” including multiple local incidents resulting in injuries and property damage.  

“PG&E has not been a good partner to San Francisco—undermining the City’s ability to provide core services, imposing unnecessary costs on our ratepayers, and making it harder for public power providers to do our jobs,” said San Francisco Public Utilities Commission President Sophie Maxwell. “The City has sought unsuccessfully to resolve these issues for years, through litigation and direct negotiation. It has become clear that acquiring and assuming responsibility for the distribution system is the only way for San Francisco to operate its electric utility in a way that meets the City’s objectives.”

San Francisco’s acquisition of PG&E’s assets would not burden PG&E’s remaining ratepayers, and very well could benefit them. San Francisco is a small part of PG&E’s large service territory, representing less than 8% of PG&E’s total electric retail accounts in 2019. PG&E’s revenues per San Francisco customer are smaller than its revenues per PG&E customer outside the City. San Francisco’s acquisition would reduce the size of PG&E’s remaining service territory and its service obligations. This alone could benefit remaining ratepayers as PG&E would no longer have any expenses or obligations related to the upkeep – and future capital needs – of the assets purchased by San Francisco. Relieving PG&E of this obligation can help it focus on critical needs elsewhere.

The full valuation request is available here: 

https://www.sfcityattorney.org/wp-content/uploads/2021/07/CCSFs-CPUC-Valuation-Petition-7-27-21.pdf.

More information on the City’s transition to public power is available here: 

OurCityOurPower.org.

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