Public Power Grab

Why some "progressives" are putting energy into a bad idea.

After a decade of trying, San Francisco is still a long way from stopping the diesel smoke that spews over the city's eastern neighborhoods from a power plant west of Potrero Hill. Why? Haven't politicians for years been making grandiose plans to cure this environmental injustice?

The answer lies in an ages-old political battle that has nothing to do with smog-borne diseases, good government, sound infrastructure planning, or keeping the city's lights on.

For decades, an official requirement for being considered a San Francisco "progressive" has been supporting the idea that city government should own our electricity system. This is not because of a serious problem or crisis involving the current PG&E-run system. Rather, public power has been a populist-seeming issue a local pamphleteer long ago became obsessed with. And over the years, that pamphleteer has somehow persuaded others — many of whom now have authority over how the city spends taxpayers' money — to fall into line.

Last week, however, San Francisco's Public Utilities Commission all but extinguished the latest, greatest hope of local public powerphiles by voting unanimously to withdraw support from a $270 million proposal whereby the city would have paid a subsidiary of a Japanese company to build a 143-megawatt power plant along the central waterfront. The idea had been to replace the controversial "peaker" diesel generators run by Mirant Corporation at Illinois and Humboldt streets, which are used to sell power to PG&E's electrical grid only during shortages.

But the commission opted for a simpler, cheaper plan: replacing the pollution-spewing diesel burners with cleaner natural gas ones at a cost of $70 million to be borne by PG&E ratepayers statewide. "Where we are now is cleaner and no cost versus enormous cost," commissioner Dick Sklar said.

The Board of Supervisors had been scheduled to vote this week on whether to borrow money to fund the city-owned plant proposal, which is supported by supervisors Jake McGoldrick, Sophie Maxwell, Bevan Dufty, and Board President Aaron Peskin. But now, following the PUC's rejection of the more expensive plan, "there are not six votes on the board to approve it," Peskin said. "I wish it weren't so, but it is."

That should be the end of it, but it isn't, because the idea of a city-owned electricity plant has become a leftist cause célèbre. The aforementioned quartet of supervisors seems to be preparing for an extended fight to preserve the risky, expensive, and burdensome $270 million scheme. Their heel-digging could mean keeping unwanted fossil-fuel-powered electricity plants within densely populated city limits for decades.

"[It's like] saying, 'I can't get my way with my idea, so I'll pull the house down around me,'" Sklar said. "I think it's stupid and bordering on irresponsible and evil, and not a path forward for the city."

The gas-fired, city-owned plant proposal has been seen as something much grander than merely a way to keep eastern S.F. residents from choking on diesel fumes. The deal was envisioned as a potential falling domino that might eventually lead to government seizure of the whole electricity system.

The reasoning there is hazy to say the least. For supporters, though, the plan was a progressive triple-header: it would somehow increase the likelihood of public power, it punished enemy PG&E, and by compelling Mirant to close its Potrero plant, it would punish a supposed corporate bad actor.

The job of pushing through this public-power Trojan horse was tailor-made for Susan Leal, who was appointed general manager of the PUC by Gavin Newsom after dropping out of the 2003 mayoral race as part of an apparent political deal. Leal attempted to position herself as a public-power-supporting leftist. She was no stranger to conducting questionable business on behalf of the city; she had been a director of SFO Enterprises, the ill-fated city-owned company that led the privatization of Honduras' airports. So Leal directed her core staff to present the new power plant idea as the only viable option.

This posture exasperated environmentalists like former commissioner Adam Werbach. From the environmental community, "nobody was interested in the deal," he said. Commissioner Sklar, a mechanical engineer who held Leal's job during the 1980s, felt her staff members were not telling the whole story.

The commission finally fired Leal in February. Public power advocates claimed this was a coup d'état by Mayor Newsom. But for those charged with actually making the city's utilities work, her firing paved the way for the superior proposal in which Mirant would replace its diesel generators with natural-gas ones, while signing a contract that wouldn't allow the company to use them except in electricity emergencies. The generators would be phased out as new electricity transmission lines are built connecting San Francisco to the rest of California.

That seemed like the end of a decade-long ordeal in which residents near the plant said the diesel smoke made them victims of environmental injustice. But a solution may be a long way off. That's because backers of the city-owned power plant idea are pursuing a Hail Mary political maneuver apparently designed to either quash or postpone the retrofit plan. Maxwell, Dufty, McGoldrick, and Peskin are sponsoring a proposed ballot initiative for November to give the Board of Supervisors more authority over issuing construction permits involving power plants. If voters also elect new supervisors who believe the city needs its own gas-fired power plant — here's the hail Mary part — then maybe a stronger Board could kill the retrofit plan and put the new plant back on the table.

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