Not ready for takeover quite yet
In January, Mayor London Breed ordered up a study on buying out Pacific Gas & Electric Co.’s operations in San Francisco and signaled what she wanted. With the giant utility huddled in bankruptcy, it was an opportune moment to attain the long-sought goal of public power.
Breed is now getting what she desired in a friendly look at the takeover idea in a report from from the city Public Utilities Commission, which operates a parallel power world supplying electricity to city facilities and some private customers.
But what’s missing is the bottom line: a number to buy out PG&E’s array of lines, cables and substations that make up an electrical grid. The price tag is “in the neighborhood of a few billion dollars,” the report breezily estimates.
That’s hardly convincing, and it didn’t dissuade the study’s authors from highlighting the positives of a takeover. But a fuller answer and a closer reading of the report is needed before pushing ahead on a promising idea that has the potential to lower rates.
PG&E’s future is tied up in federal court, mired in billions of dollars in wildfire lawsuits, subject to Sacramento law making and blamed in the devastating Camp Fire that burned Paradise. The suddenly heightened push for municipalization is understandable.
As the report points out, San Francisco has its reasons. There are angry relations between the city’s Hetch Hetchy power system and PG&E, concerns about meeting climate change goals, and ever rising electric bills. Voters who rejected takeover measures in the past may be warming to the idea shown by approval last year of a bond measure for clean power facilities and an opt-out system that lets residents buy juice from renewable sources.
The trend lines and politics may be there, but the city hasn’t clinched the argument. Along with the hazy costs are other caveats: a switch to city hands “will likely take several years and the full benefits would not be realized until the transition is complete.” Deciding what to take over and leave out is another unknown along with handling labor unions worried about job changes. Biggest of all: “assuring that rates for customers would be affordable and stable.” The report is nowhere close to a final answer and indeed is billed as preliminary.
These doubts aren’t dissuading Breed, who said the results show a takeover is “feasible.” That’s a summation that needs far more scrutiny before the city commits to an expensive, lengthy and possibly beneficial process.