SFPUC outlines plan to expand public power, seeks CPUC valuation of PG&E distribution assets

The San Francisco Public Utilities Commission on Monday described an initiative to expand municipal control of electricity service by acquiring Pacific Gas and Electric Co.'s local distribution assets in the city.

Barbara Hale, assistant general manager for power at the SFPUC, told the Commission on the Environment that Hetch Hetchy Power and the Clean Power SF community choice aggregation program already provide roughly 70% of the electricity consumed in San Francisco, but both rely on PG&E to distribute power. "In order to better serve San Francisco, the city is pursuing purchasing PG&E's local distribution assets," Hale said, listing poles, underground vaults, transformers and lines as examples.

Hale said the city made two formal offers to PG&E — including a $2.5 billion bid in September 2019 — and that PG&E rejected them as below the utility's perceived fair market value. To move the process forward, the SFPUC filed a petition with the California Public Utilities Commission (CPUC) asking the CPUC to set a value for the assets and conduct an independent review. Hale said the CPUC directed PG&E to respond and scheduled a technical appearance on December 14; the SFPUC estimates the valuation process could take 18 to 24 months, with the CPUC setting the formal schedule.

Hale listed expected benefits of local ownership: greater local control and accountability, potentially lower rates, investment directed back into San Francisco infrastructure, and improved ability to maximize Hetch Hetchy Power and Clean Power SF for the city's decarbonization goals. She also catalogued challenges the city has faced with PG&E, including project delays and what she described as "unreasonable equipment requirements" that have increased costs for projects such as municipal pools and museums.

Commissioners asked whether an asset purchase would include software, billing systems and staffing. Hale said the city would expect to purchase the technology required to operate the system, but not PG&E's workforce; the city would seek to become an employer of choice for utility staff interested in staying on. She added that the SFPUC is preparing "operational readiness" work that includes staffing and systems planning while continuing outreach and analysis.

Hale urged public engagement and listed publicpowersf.org as a resource for information. The presentation concluded without a formal vote on the acquisition itself; commissioners pledged to follow the CPUC proceeding and public outreach as the next steps.

Provenance: Presentation and Q&A during Item 7 (SFPUC public power update).