Budget committee pauses PUC power‑contract changes after debate over waivers and labor rules

San Francisco ' The Budget and Finance Committee on May 3 continued for one week a proposed amendment to Administrative Code section 21.43 that would increase the San Francisco Public Utilities Commission's delegated authority for buying electricity and related products and waive specified municipal contracting requirements.

Barbara Hale, assistant general manager for power at the PUC, told the committee the changes are driven by "historic volatility in electricity markets" and the need to act at a "commercial pace" to secure competitive bids. "The market is volatile, fast moving, and very competitive," Hale said during the presentation, explaining that some investor‑owned utilities require standard form contracts with binding arbitration terms.

Why it matters: The ordinance would raise the PUC's annual expenditure limit for certain power purchases from $150 million to $200 million and allow the general manager to sign contracts that include terms — such as binding arbitration and other provisions — that the City's standard contracts ordinarily exclude. Supporters say the authority helps the City respond to rapid market windows and obtain supply to meet regulatory obligations; critics warned it could undercut local labor and procurement standards.

Supervisors pressed PUC staff about the local impacts of requested waivers. Chair Connie Chan and other committee members repeatedly asked whether the authority would permit the PUC to waive the Minimum Compensation Ordinance, the Health Care Accountability Ordinance and sweat‑free contracting when those terms would otherwise apply to projects involving construction or labor. PUC staff said long‑term contracts tied to new construction typically include more of the City's standard provisions, but that short‑term market purchases or responses to IOU solicitations sometimes require accepting the counterparty's form terms.

Supervisor Safai asked for examples of when the City had used the delegated authority and whether such contracts had produced or supported local projects. PUC staff said they had exercised the authority in a limited number of instances and agreed to provide additional reporting. "We can certainly provide waiver information in the report for you," Hale told the committee when asked for a commitment to document any future waivers and their labor implications.

Public commenters expressed concern about large dollar amounts and urged rigorous oversight; the committee also read minor technical amendments requested by deputy city attorneys (citation corrections and the addition of "renewable portfolio standard" to the delegation).

Outcome: After discussion the committee voted to continue the item to the next Budget and Finance Committee meeting (May 3), allowing staff to provide requested clarifications and additional reporting on any waivers exercised.

Next steps: The item will return to the Budget and Finance Committee for further review before any vote to forward a recommendation to the full Board of Supervisors.