San Francisco submits petition to determinate value of PG&E's local infrastructure
Owning the grid would allow San Francisco to provide clean, reliable and affordable electricity throughout the City while also taking meaningful climate action, like reaching its set target of using 100% renewable electricity by 2025. Controlling energy use and delivery would also allow San Francisco to ensure equity in electric service and workforce development while providing transparency and public accountability in rates, service and safety.
The move comes after the City made a $2.5 billion offer in 2019 to purchase PG&E’s local electric assets following years of the investor-owned utility’s failure to provide reasonable, safe, and cost-effective service to its ratepayers.
The City resubmitted its offer when PG&E emerged from bankruptcy in 2020. PG&E rejected both San Francisco purchase offers, and in the last year has begun seeking to impose more than $1 billion in unnecessary charges on City customers while delaying basic power hookups on a range of public buildings from schools to new transit projects.
In the valuation petition, the City asks the CPUC to determine the just compensation to be paid for PG&E’s electricity distribution assets that serve San Francisco. State law gives the CPUC the authority to set definitive valuations for utility assets. San Francisco’s petition also proposes a process for the Commission to assess the value of PG&E’s electric facilities.
"San Francisco has been a reliable public power provider for more than a century. PG&E is the poster child for a utility that puts profit ahead of people. San Franciscans have had enough,” said City Attorney Dennis Herrera.
“This proposed acquisition makes sense for San Francisco, it makes sense for PG&E’s other customers, and, quite frankly, it makes sense for PG&E. San Francisco is offering billions of dollars that could be used to pay fire victims and keep PG&E from sticking customers with rate hikes. San Francisco made a very fair offer to buy PG&E’s local assets. PG&E refused. Now we’ll use an impartial process to set the definitive value of this infrastructure so we can move forward.”
“The current relationship between San Francisco and PG&E is untenable. For years, San Franciscans have paid the price for PG&E’s service delays and cost overruns, with terrible impacts on public facilities across the City, from schools and homeless shelters to affordable housing and recreational facilities,” said Senate Scott Wiener (D-San Francisco).
“This has never been acceptable, and it’s getting worse. It’s time for the City to reconsider its options for getting out from under PG&E’s corporate monopoly, and I urge the CPUC to act quickly to provide a fair valuation of PG&E’s assets so this acquisition can move forward.”
San Francisco has also set a goal of shifting to 100% renewable electricity by 2025 and 100% renewable energy by 2040—a target that will be easier to achieve if San Francisco had local control of its power grid. San Francisco would use bonds secured by future revenues from electricity generation to acquire PG&E’s infrastructure, so no funds for existing City services, like affordable housing, libraries or addressing homelessness, would be affected.
San Francisco’s acquisition of PG&E’s assets would not burden PG&E’s remaining ratepayers, and very well could benefit them. San Francisco is a small part of PG&E’s large service territory, representing less than 8% of PG&E’s total electric retail accounts in 2019.
PG&E’s revenues per San Francisco customer are smaller than its revenues per PG&E customer outside the City. San Francisco’s acquisition would reduce the size of PG&E’s remaining service territory and its service obligations.
This alone could benefit remaining ratepayers as PG&E would no longer have any expenses or obligations related to the upkeep and future capital needs of the assets purchased by San Francisco. Relieving PG&E of this obligation can help it focus on critical needs elsewhere. ■