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UncategorizedPublic power moves forward at City Hall. What will...

Public power moves forward at City Hall. What will the mayor do now?

Sup. Scott Wiener's public-power bill comes to the Land Use Committee today
Sup. Scott Wiener’s public-power bill comes to the Land Use Committee today

By Tim Redmond

NOVEMBER 24, 2014 – The first baby steps toward public power in San Francisco continue to move forward – but the mayor remains an obstacle.

Mayor Ed Lee refused to support CleanPowerSF, despite widespread support at the Board of Supervisors, and his Public Utilities Commission scuttled it last year. The mayor at the time said he didn’t think the program would create enough jobs; the allies of PG&E, which wants no competition ever, dummied up a campaign against the short-term energy contractor  the city was going to use.

Then the mayor tried to make the whole issue vanish.

But now all of the problems that Lee cited have vanished instead. And a recent report commissioned by the Local Agency Formation Commission shows that CleanPowerSF would create 8,100 construction jobs – and that it can be done without any outside contractor. 

The Citizens Advisory Committee to the SFPUC has already approved a resolution calling on the panel to approve the program.

I tried to corner the mayor after Question Time this week, but he slipped away before I could ask him: Now that the evidence shows that all of your concerns have been addressed, will you finally support CleanPowerSF?

His spokesperson, Christine Falvey, told the Chron that the answer is a clear maybe, and left the mayor a lot of wiggle room:

Falvey said the mayor still has concerns over whether a program would rely in part on transferable renewable energy credits rather than 100 percent clean energy generation, and he continues to oppose the opt-out provision that, under state law, automatically enrolls customers who could opt-out if they’d rather stay with PG&E.

Well, that’s state law – and it’s also key to the program. Consumers who want to stay with PG&E are welcome to do that – but the default is public power, at the same rate, with more renewable energy. Standard practice in other communities that have made this work.

And now Sup. Scott Wiener is introducing legislation that will allow the city’s existing public-power agency to accrue more customers, create more cash flow – and fund things like street light repair and upgrades to the Hetch Hetchy generation and transmission system.

The Wiener bill will be heard today in the Land Use and Economic Development Committee, and could move on to the full board as soon as tomorrow. It would give the PUC the right of first refusal to provide Hetch Hetchy power – all of it hydroelectric, free of greenhouse gas emissions – to all new developments in the city, both public and private projects.

Under a really messed up complicated deal that dates back to the 1930s, the city generates cheap, clean, public power, but only delivers it to public agencies. PG&E serves all private customers. That creates two problems – for one, residents and businesses pay high rates to an illegal monopoly that can’t meet even modest standards for greenhouse-gas emissions. Second, the city, without a private revenue stream, can’t use the Hetch Hetchy system to issue bonds that would allow the construction of new renewable city-owned facilities.

If Wiener’s measure passes, it could be the start of a slow build-out of a local power generation system. If the mayor and the PUC are forced to accept CleanPowerSF, we could see much more local generation, much more renewable power, and ultimately, much lower rates for all electricity users.

Cheap, green power, generated and sold by the city, could (for example) power a fleet of city electric cars that would be zero-emission on both ends. (The problem with electric cars, of course, is that much electricity is generated with coal and natural gas.)

And the revenue from what fairly quickly could become a sizable public power entity could finance revenue bonds that could bring the city a long way towards a 100 percent renewable portfolio in just a few years.

San Francisco would, of course, still by paying PG&E to transmit the power along its (old, outdated) power lines. But again: With a source of revenue to bond against, and growing sales, we could start slowly building up a city distribution system, all underground, all state-of-the-art, with city-owned fiber alongside to create both municipal broadband and electricity.

In the endgame, of course, there would be no need for PG&E in its largest and most profitable territory – and the PG&E execs know that. So there will be an all-out lobbying effort at some point to derail a new version of CleanPowerSF, and maybe to block Wiener’s (more modest) bill.

But PG&E isn’t that popular these days, and in an Election Year, when all of the possible challengers support public power and don’t have any love for PG&E, Mayor Lee could be in a difficult position.

The Land Use and Economic Development Committee meets at 1:30.



Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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  1. I am perfectly happy to be given a choice. I just don’t think that the choice should be made by defaulting people into the city system.

    If the city isn’t running it, then who? If it is public power, and not just the Shell green power that was touted, them that implies that it is managed by city bureaucrats.

  2. “I will stay with PG&E because it will be cheaper and because I don’t trust the city to run anything successfully. ”

    Surely even you sam are better that this sort of substantially crass generalization.

    Public power is a choice by the very fact that it is being tried and touted as an alternative to the status quo. Like you said “…why not give people a real choice by having no default?”

    Cheaper ≠ better.

    PG&E has been run about as well as the intimidation it leveraged on the CPUC and vice versa. From Enron to San Bruno and all the scandals in between. Disasters all of them paid for by the ratepayer. Time for a change.

    “The city” won’t actually “run” public power you know that as well as anyone else so leave that simplistic rhetoric out of the picture.

    Having transparency into the daily operational costs of public power (real-time public data consumable via a public API); specifically costs of energy acquisition from “partners” is the key to successful public power and a fast route to more independent providers of sustainable energy.

  3. Not a reasonable comparison because right now there is no choice (and so PG&E have their prices regulated as a result).

    Yet Tim is trying to sell public power on the basis that we will now have a choice. So why not give people a real choice by having no default? And instead send a notice to every customer asking them to affirmatively choose one of the two options?

    However, you still have to have a default for folks who do not make an affirmative choice, and surely the default should be no change? My issue with this is that people are lazy or don’t understand, and will be switched over when they would not wish to if only they realized. It’s a snide manipulative move.

    I will stay with PG&E because it will be cheaper and because I don’t trust the city to run anything successfully. Maybe they should call in “Muni Power” so people get the idea.

  4. “If the only thing that makes public power viable is that people will be defaulted to it and may not realize, then that doesn’t say much for the merits of public power.”

    If the only thing that makes PG&E viable is that people will be defaulted to it and may not realize, then that doesn’t say much for the merits of PG&E.

  5. If you remember back a few years the telco companies did this sort of thing. It was called ‘slamming’. One day you checked your bill and suddenly you had a new vendor that you never heard of.

    It may be state law but it isn’t good to rely on people too busy or uninformed to make a proper decision to change their relationship with a key vendor.

  6. Regarding this:

    “it (opt-in rather than opt-out) would have shifted the economics such that local power providers couldn’t have afforded to provide service and would have effectively killed local power.”

    If the only thing that makes public power viable is that people will be defaulted to it and may not realize, then that doesn’t say much for the merits of public power.

    If it were any good, then having to opt out of PG&E would be an attractive and desirable choice rather than something that people will be duped into “choosing” if they don’t read the small print and so don’t realize that they are being shunted into public power without their explicit consent.

  7. Nice piece Tim; it should probably also be mentioned that PG&E and Southern California Edison just lost an important battle to sneak a trojan horse through the legislature that would have shifted the default opt out from the local power provider to opt out from PG&E. PG&E touted this as a minor change but in fact it would have shifted the economics such that local power providers couldn’t have afforded to provide service and would have effectively killed local power. Luckily enough people became aware of this cynical ploy in time to kill it. Passage of that bill would have let Lee look like the good guy and approve local power, while happily watching it go down the tubes. Now he and PG&E have to either go ahead with their effective climate change denying policy of trying to kill local power or approve it and try to devise some other cynical scheme to kill it.

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