The Board of Supes resoundingly rejected PG&E’s latest attempt to delay or derail public power, leaving the city’s Public Utilities Commission on track to move toward buying out the local grid.
But Mayor Daniel Lurie hasn’t taken a stand in favor of the move, and Dennis Herrera, the general manager of the PUC, who has played a leading role in promoting public power, is preparing to retire.
If Lurie’s PUC hires a new GM who is not a public power ally, the whole process could once again, after more than 110 years, stall in favor of the private utility.
And if Lurie’s Charter reform measures pass in November, he can instantly fire and PUC commissioner who isn’t on board with his choice for general manager.
PG&E is going to fight the city to the bitter end, and will start the next chapter in October, when the utility must tell the city what its local distribution system is worth. The city says $3.4 billion. PG&E will have a much higher price.
But in reality, the price isn’t going to matter that much. The PUC can issue revenue bonds to buy out the system, and any reasonable analysis will show that the revenue from selling electricity in San Francisco is so high that the city will easily make the bond payments, cover the operating costs, and wind up with hundreds of millions of dollars in surplus every year. The interest on $4 billion in municipal revenue bonds might be $200 million a year. The revenue from electricity sales in San Francisco, based on the most recent PUC data: About $1.5 billion. And that’s probably low: San Francisco is by far the most lucrative market for the utility. The denser the market, the lower the costs of providing wires, poles, meters, and staff.
PG&E appealed the Environmental Impact Report on the physical and technical details of a city takeover of the grid. The supes were having none of it.
Sup. Connie Chan, who represents the Richmond, which suffered through serious blackout in the past two years, said that PG&E’s infrastructure “has failed us.”
Even the conservative supes are clearly sick of PG&E providing unreliable service and making crazy demands on city agencies and affordable housing projects. Sup. Matt Dorsey said the appeal was “so galling” given PG&E’s history as a bad actor in the city. “To come into our chamber and waste our time with an expensive stunt is breathtaking,” he said.
“I spent 14 years in the City Attorney’s Office and have seen my share of bad actors,” Dorsey said, “but none as bad as PG&E.”
Sup. Myrna Melgar said she had sat through countless EIRs and EIR appeals as a member of the Planning Commission and the Board of Supes, and “this is the most ridiculous I’ve ever seen.”
The vote to reject PG&E’s appeal and move the process forward was unanimous.
Now it’s in the Mayor’s Office.
I’m surprised that none of the supes have used Question Time to pin Lurie down on public power. Maybe that will change next month, since the new PUC GM will be one of the most important decisions the mayor will make. PG&E has been using delays and dubious tactics to block public power since 1913; if the mayor isn’t willing to stand up to the company, that will continue.
