San Francisco has been on the brink of public power for 100 years. PG&E has been trying to stop us pretty much the whole time.
There is one big reason Bay Area cities like Alameda, Santa Clara, and Palo Alto have been able to successfully operate local public power systems for most of the last century: Their municipal power enterprises were established in the 1890s, years before the founding of PG&E.
After weathering decades of utility consolidation and PG&E takeover attempts, these local power providers offer customers the same thing as the more than 50 other public power utilities across California: Reliable service, at lower rates, without all the chaos, wasteful spending, and periodic bankruptcies of PG&E.
San Francisco has had a public power system for almost as long as its Bay Area neighbors: Hetch Hetchy Power has been in operation for more than 100 years (with local power programs now providing more than 75% of the electricity consumed in the City).
City residents might have spent the last century enjoying all the benefits of a true public power system if not for one thing: In 1925, a few years after the completion of the O’Shaughnessy Dam in the Sierra Nevada opened up access to a huge new source of hydroelectric power, the City was ready to provide this cheap electricity to San Francisco but it didn’t have transmission lines to transport the energy all the way.
Looking for a temporary solution, City leaders partnered with PG&E, whose private power lines could deliver the electricity the rest of the way. The City agreed to sell Hetch Hetchy power to PG&E at wholesale rates, until the City could ask voters to approve a bond measure to pay for the remainder of its public power project.
It was a decision that has haunted public power efforts for literally a century.
The City put multiple bond measures before voters over the next 15-plus years, all of which PG&E actively campaigned against, while pocketing the profits it charged San Francisco customers for their own power. The federal government tried to put an end to this corrupt deal, going to court to argue that Congress had only allowed Hetch Hetchy to be dammed so long as the electricity generated was not sold to PG&E.
PG&E, though, did what it does best. Delay, distract, and delay some more—in this case for decades.
After undercutting the City’s bond efforts and stymieing elected officials at every turn, the utility found new ways to charge the city for its services. From “wheeling” and “firming” fees imposed in the 1980s to the more than $1 billion in unnecessary equipment PG&E tried to charge San Francisco for in recent years, the PG&E playbook has always been the same.
San Francisco leaders, though, recognize that they have every right to finish what the City started more than a century ago.
That’s why the City in 2019 made its first cash offer of $2.5 billion to purchase PG&E’s local electric assets and complete the transition to public power.
It’s why the City has already gotten voter approval to use revenue bonds to finance the purchase—before PG&E could undermine yet another election campaign.
It’s why we’re not taking PG&E’s usual no for an answer and have requested a formal assessment of the system’s fair-market value from the California Public Utilities Commission.
And it’s why we’ve also begun the environmental review process required to complete this purchase.
Public power is coming to San Francisco. It’s been coming for more than 100 years.
And this time, we’re not going to let PG&E stand in our way.
