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Wednesday, September 22, 2021

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UncategorizedPublic power in SF: How far we have come

Public power in SF: How far we have come

Are PG&E's days numbered --at last -- in San Francisco?
Are PG&E’s days numbered –at last — in San Francisco?

By Tim Redmond

DECEMBER 2, 2014 — In the spring of 1970, when activists and political leaders around the country were planning the first Earth Day, the Daughters of the American Revolution issued a statement of ominous warming:

“Subversive elements,” the group said, “plan to make American children live in an environment that is good for them.”

I thought about that when I heard representatives of the Building Owners and Managers Association and the Chamber of Commerce complain about Sup. Scott Wiener’s plan to expand the city’s role in commercial electricity sales.

Dee Dee Workman from the Chamber complained that “we don’t want you to force building owners to buy power from the city.”

In other words: Don’t make us buy cheaper, cleaner electricity. It might be good for us.

Seriously, the business folks were worried about the concept that the city would have the first right of refusal to sell power to new commercial developments. As Wiener pointed out, businesses can talk all they want about mandates and options, but right now they have no options at all. PG&E is a monopoly. You want electric power, you buy from that company.

“We do not have a history of consumer choice in this city,” he said.

In some cities, a public agency fills that role. Public power generally costs less and is (generally) cleaner than private power.

In San Francisco, what Wiener is suggesting is just a tiny step forward toward doing what federal law has long required: Making San Francisco the default provider of retail electricity within the city limits.

I’ve been writing about PG&E for more than 30 years, and I have to say, it’s amazing how far we’ve come: Wiener, not known as the most progressive of supervisors, made a speech that could have come from a public-power textbook.

PG&E’s allies have always ridiculed efforts at municipal operations of the local utility by saying that the city can’t do anything else right – that a city-run electric system would be unreliable.

But Wiener pointed out that the SFPUC has been running an electrical system for more than 100 years, without problems.

“You don’t worry about the lights going out at SFO or San Francisco General or Muni,” he said. “This is not an unknown quantity.”

In fact, the SFPUC provides power at Treasure Island – and the lights seem to work just fine there, too.

“How come,” he asked the Chamber and BOMA, “we only worry about consumer choice when the PUC is the provider? How come you didn’t complain about consumer choice when we were stuck with PG&E?”

The measure passed unanimously on first reading at the full board Nov. 25, and will go to the mayor after a second vote. Lee can’t possibly veto it; the override would be almost automatic. So he’ll probably just let it become law without his signature – sending another message that he won’t openly defy PG&E, certainly not in an election year.

But if we can come this far on an issue where progressives have been blocked for decades, there’s always hope for the future.



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. The shell thing was more expensive and the consumer had to opt out of it.

    Like PGE, the progressive goal is to get over.

  2. I guess it depends on how you define “price regulation”. Airlines, taxis, trains and more are all subject to many regulations that inevitably affect their price. Yes? We could remove those regulations, and probably their prices would come down, at least initially– until the free for all in competition drifted toward monopoly/duopoly conditions. The same with your examples, i.e. “insurance, banking, cars, cell phones” — esp the first three are subject to many regulations that affect their prices, but it’s not always clear in which direction. In other words, I think you are painting this too black or white. The notion that deregulation leads to lower prices is not always the case. You have to look at these things over time. And even then, you may end up “paying” for it in other ways. Walmart drove many other retailers out of business by offering lower prices — but the lower prices greatly came from the lower wages for their employees and those in their supply chain. But many of those same low wage workers need public assistance to make ends meet — which you and I pay for via our taxes. Also, there are environmental externalities resulting from the production of many products and services that are not reflected in the price. And those externalities usually become GREATER with less regulation. So the total cost of a product may not be reflected in the price, in other words. You can’t always draw a straight line from A to B.

  3. Of course there are regulations in general. But my point was specifically about price regulation. Can you give examples of where prices are regulated where there is a good choice of supplier?

    Offhand I cannot, although there are often conspiracies among suppliers to all offer the same price, e.g. with gas and airline fares.

    But to me choice is useless if prices are all the same anyway. I’d rather have suppliers falling all over each other to give me the best deal, as happens with insurance, banking, cars, cell phones etc.

    My suspicion is that public power advocates do not want real consumer choice at all. They want everyone using public power. And this new-found love of the free market is just a tactic to try and disadvantage PG&E, so they can take over their monopoly.

  4. Having two choices rather than one is hardly a reason to jump to wholesale deregulation. There are lots of examples of markets where we have consumer choice AND regulation in our economic lives. In fact, in markets that work best, oftentimes regulation is a great facilitator of consumer choice by fostering competition. Conversely, there are many examples where a lack of regulation/deregulation resulted in less choice, i.e. monopolies. But to you regulation and choice apparently are in opposition to each other. It’s interesting to see how your mind works.

  5. While I support consumer choice, I do not believe that public-supplied power will be any cheaper than PG&E. Certainly the Shell green power thing we toyed with wasn’t going to be cheaper. More expensive, in fact, as “green” power invariably is. You have to pay to salve your conscience.

    (Tim ignores the fact that PG&E power is now two thirds sustainable anyway).

    One other thing. The reason we regulate the price of power (water, trash etc. ) is because there is a monopoly. If we really do have a choice then there is no reasonable basis on which to regulate price any more, because consumers can always switch to another supplier.

    So can we de-regulate as soon as we have a choice? We don’t regulate the price of cell phone providers and they cut each other’s throats, which is good for consumers.

    If you are using the “choice argument” to try and slip public power through the back door, without us getting to vote on it (the voters have ALWAYS rejected public power when asked) then you should argue for de-regulation as well.

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