PG&E is on the ropes

There's never been a better time for the city to move on creating a public power system.

When the California Public Utilities Commission – never known for its tight oversight of Pacific Gas and Electric Co. – suddenly starts talking about the possibility of turning the private outfit into a publicly owned utility, you know the company is on the ropes.

At the same time that the state is raising the issue of whether private power is the best solution for northern California, Sup. Aaron Peskin has proposed spending $50 million of the city’s unexpected budget surplus on a down payment toward municipalizing PG&E.

A man in a wheelchair escapes the Camp Fire. PG&E is liable for billions in damages. CalFire photo

That comes in the wake of PG&E’s foolish battle with the city over connection fees. The company picked a really stupid fight with San Francisco, leaving the city’s own PUC – which has never been active in the fight for public power – angry and ready to move.

If the new progressive board approves Peskin’s plan, and Breed doesn’t veto it, the city will be in a position to immediately start building its own delivery system. That could be the beginning of something public-power advocates have been seeking for 100 years.

San Francisco already has a major source of clean electricity, the hydropower dam at Hetch Hetchy. But the city can’t sell that power directly to local customers, because PG&E owns the wires and meters in town.

In the old days, we used to talk about buying out PG&E’s local distribution system. At this point, the wires and connectors and meters and transformers are old and close to worthless; the company has always claimed that it would cost multiples of billions of dollars to buy them out, but the reality today is that the price for the crumbling infrastructure is almost nothing.

But why buy a system in deep disrepair? The city can, thanks to Prop. A and Peskin’s proposal, start building out our own. The wires can be underground (much safer in an earthquake and less likely to cause fires). The new gear can be state-of-the-art. Once the city starts opening up the streets and installing electrical cables, it can also install fiber optic cables, and set things up for muni broadband.

The endgame: Cheaper, greener power and eventually, (much) cheaper broadband. (Does anyone out there actually like their Internet company?)

Every time San Francisco has tried to create its own public-power system, PG&E has spent millions, even tens of millions, to shut the effort down. We’re now looking at a company teetering on the edge of financial solvency, fighting court battles all over the state, facing the very real prospect of bankruptcy – with at this point pretty much zero political allies.

PG&E used to be a powerhouse in the city, able to buy off opposition with ease. Campaign contributions, lobbying, donations to local nonprofits, and a very friendly labor union put the utility in a place where former Mayor Ed Lee called it “a great company.”

Now, PG&E is pretty close to political poison. There’s never been a better time to move forward with public power.