The City Should Takeover PG&E’s Grid, Report Says

In PG&E’s bankruptcy, Mayor London Breed sees an opportunity for a publicly run utility — and soon.

As PG&E’s legal and financial woes mount over deadly and destructive wildfires, a new city report recommends moving forward with plans to take over the utility’s equipment, in order to provide renewable power at cheaper prices.

It’s an idea that many are on board with. Activists have protested bailouts during several California Public Utility Commission meetings while Supervisor Hillary Ronen introduced legislation in January to create a fund for a public utility. Amid the announcement that PG&E would file for bankruptcy, Mayor London Breed requested a report to determine the feasibility of building upon CleanPowerSF by buying up the troubled company’s assets. (The program began providing renewable energy to more than 80,000 households in 2016, but PG&E has delayed its expansion.)

And things aren’t looking good for PG&E. State regulators are mulling drastic changes to the investor-owned utility, which faces lawsuit after lawsuit over its role in California’s wildfires. Having filed for bankruptcy in 2001, PG&E formally did so again on Jan. 29, with an estimated $71 billion in assets and $50 billion in liabilities.

The report, which the San Francisco Public Utility Commission released on Monday, preliminarily found that not only is it possible to buy PG&E’s equipment, but that the city should do so. Its options include expanding CleanPowerSF while relying on the PG&E power grid, investing in its own electric infrastructure but still using PG&E to deliver it, or buying equipment to take over the grid outright.

“This report shows that acquiring PG&E assets is feasible and could be a significant step in meeting our aggressive climate goals while also prioritizing safety, transparency, and affordability for our residents,” Breed said in a statement. “There is still a lot of work to be done, but it is in the long-term interest of our city to continue down this path to take advantage of this unique opportunity.”

The third option comes with an estimated price tag of “a few billion dollars initially,” since it has to buy the assets, offer jobs to its union workers (whose leaders are opposed to a takeover), scale up CleanPowerSF, and modernize the facilities for renewable-energy technology.

Billions-with-a-B sounds sky-high, but the report considers the big picture. Acquiring the assets would also bring in up to $700 million in annual revenue from electricity sales, far more than the $220 million limit from the second option of investing in the city’s own infrastructure. That would also cost $10 million to $300 million per investment, whereas continuing limited independence would cost $25 million to $100 million a year.

There’s also the matter of climate change. While CleanPowerSF and the city’s Hetch Hetchy Power program are on track to meet the goal of obtaining 100-percent greenhouse-gas- and nuclear-free electricity supplies by 2030, 20 percent of San Francisco residents and businesses who don’t use the city’s power programs are behind on meeting that goal.

“Historically and today, the city’s reliance on PG&E compromises the city’s achievement of its critical climate goals, given both PG&E’s electricity supply content and its grid management practices,” the SFPUC report reads. “The city has the ability and intention to undertake such acquisition work with maximum community engagement and accountability.”

Breed directed the SFPUC and City Attorney’s Office to take an in-depth assessment and make a move in the coming months.

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