Delusions of Power

Is it smart to jump into the Bay Guardian's version of public power, without even studying whether it will save money?

Tarr affirmed a finding issued in 1971 by a predecessor: "Although some of the sponsors of the [Raker Act] legislation may have hoped that the city would take over the distribution system of the Pacific Gas and Electric Company within the city limits and furnish retail electric power service to the citizenry, Congress did not write such a requirement into the Act."

Outside the halls of the Bay Guardian and its close adherents, the meaning of the Raker Act is not really a matter of dispute. A wide range of attorneys and economists who specialize in energy matters were contacted recently by SF Weekly; those who were familiar with the Raker Act said that San Francisco is not, to their knowledge, violating the act. They all were quite direct in stating that the act does not require the city to set up a publicly owned electrical utility.

Robert C. McDiarmid is a partner in the Washington, D.C.-based law firm Spiegel & McDiarmid, which specializes in representing public power utilities that find themselves at odds with private utility companies. McDiarmid is nationally recognized as a top legal expert in California public utility law. In an interview last week, McDiarmid said, "The Raker Act does not pertain to setting up a public power system for the entire city of San Francisco. There is not enough power in Hetch Hetchy to do that anyway. There are other ways to achieve public power in San Francisco than by relying on the Raker Act."

Nonetheless, the Bay Guardian has insisted for decades that the Raker Act, and the 1940 Supreme Court ruling invalidating the original PG&E contract with the city, command San Francisco to displace PG&E and operate its own public power distribution system using Hetch Hetchy power. In January of this year, for example, the Bay Guardian wrote: "San Francisco is the only U.S. city mandated by federal law to run a public power system. ... For 87 years PG&E has maintained an illegal monopoly over the city's electric business."

Such is the power of repetition that even the New York Timesreported in January, "As the San Francisco Bay Guardian has noted in a series of articles, the city is violating the Raker Act requiring it to create a low cost public power system."

Here are the Raker Act realities, as pointed out by court documents, government officials, and private-sector experts: A resale contract between the city and PG&E violated the Raker Act from 1925 to 1940. The Supreme Court invalidated that contract. A new contract that met the dictates of the act was entered. The Supreme Court never ruled that the city must set up a public power distribution system. The court did note that the Raker Act requires that the city own and operate the Hetch Hetchy water and electrical system -- which it does. Neither the Raker Act nor the court prohibited PG&E, or anyone else, from selling non-Hetch-Hetchy-generated electricity in San Francisco.

In a telephone interview, Brugmann maintained his position that the city is violating the Raker Act, without presenting documentary evidence showing that this is so. He did, however, accuse SF Weekly "of standing with PG&E in the middle of an energy crisis."

As the California energy crisis deepens, San Francisco residents and city officials have become understandably interested in the possibilities of public power. There are, after all, many electric utilities across the country that are owned by municipalities. There is little doubt that many publicly owned utilities deliver electricity more cheaply than their private-sector counterparts. And even though the Raker Act does not mandate public power in San Francisco, the city clearly is allowed to pursue ownership of its electrical utility.

At the moment, the issue of public power in San Francisco is dominated by the LAFCO and its MUD proposal.

The MUD surfaced last spring when a lobbying group called Coalition for Lower Utility Bills -- A Project of San Franciscans for Sunshine collected 24,000 signatures on a petition that read in its entirety: "In the opinion of the petitioners, public interest or necessity demands the creation and maintenance of a municipal utility district with the same exterior boundaries as the City and County of San Francisco and the City of Brisbane." CLUB included Brisbane in the petition (against the wishes of the Brisbane City Council) because state law says that two public agencies must be involved when a MUD is formed.

In July, Board of Supervisors President Tom Ammiano proposed that the supervisors put the MUD petition to the voters for the November 2000 election. That plan fell apart in August, when a Superior Court judge ruled that the MUD could not be voted on until it was studied and approved by a San Francisco Local Agency Formation Commission; such a LAFCO was then formed by city supervisors.

LAFCOs are creatures of a state law called the Cortese-Knox Act, written in 1985 to regulate urban sprawl. Ordinarily, a LAFCO is called into being to study the environmental impact of annexing new territory to a city, or to create special governmental entities, including municipal utility districts, which are generally formed to acquire and operate utility services. After study, the commissioners are to decide whether to approve or disapprove the formation of a new district. In the case of a MUD formed to generate or distribute electricity, state law requires that the district's voters also be consulted.

« Previous Page
Next Page »
My Voice Nation Help
©2014 SF Weekly, LP, All rights reserved.