SF nearly had its own power grid 100 years ago until PG&E came along. Here's what happened

Friday, May 17, 2024
SF nearly had its own power grid 100 years ago until PG&E came along
Imagine San Francisco owning its power system. It almost happened 100 years ago. Now there is a push to finish what the city started and save customers money by purchasing PG&E's grid.

SAN FRANCISCO (KGO) -- Pacific Gas and Electric customers have been hit by rate increase after rate increase and now they could have to pay a monthly fixed charge for infrastructure costs.

And now the San Francisco Public Utility Commission is now hoping it can save customers money if it can get rid of PG&E and create its own power system.

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PG&E announces record profits for 2023 raking in $2.2 billion, a nearly 25 percent increase. This comes after implementing a rate hike in 2024.

Envision San Francisco owning its electrical system.

It's never happened.

Despite Congressman John Edward Raker making a deal with Washington D.C. in 1913 allowing San Francisco to dam Hetch Hetchy Valley in Yosemite.

"In exchange for giving the city the right to build the dam in a national park, San Francisco had to agree to use that dam as the cornerstone of a public power system," said Tim Redmond, founder of the 48 Hills News, who has done extensive research on the issue.

A few years later, San Francisco was well on its way, building a hydroelectric powerhouse at Moccasin Creek.

Meanwhile, transmission lines were being built, until, the city ran out of money just 38 miles from reaching San Francisco.

That's when PG&E offered to help distribute San Francisco's power, after all, PG&E already had the lines, the poles and infrastructure, back then, fueled by coal-fired power.

MORE: California utility companies propose charging customers based on how much money they make

It was supposed to be temporary while San Francisco raised the money through a bond measure.

"Nine, maybe 10 times, bond acts were put before the people and every time PG&E spent so much money campaigning against it that they didn't pass, in part because the city leaders didn't campaign for it," said Redmond.

In the 1980s, former Supervisor Angela Alioto became one of San Francisco's most outspoken advocates for public power, even writing in her book about how City Hall was a PG&E stronghold.

"PG&E was electing officials. PG&E became almost the source of electing officials," revealed Alioto.

Another former supervisor Tom Ammiano joined Alioto in fighting against PG&E.

"There was a little too much pay-to-play at City Hall and people would say, 'well, like who?' I'd say, well, I don't want to get anyone in trouble, I'll just give you their initials PG&E," recalled Ammiano.

Ammiano revealed he too was once quietly approached by a PG&E representative offering support for his political campaign.

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"We, if you are favorable to us, we can have a fundraiser for you and we can get you $25,000," he told ABC7 news.

The public's perception of PG&E began to change with the San Bruno gas pipeline explosion in September 2010, questioning the safety of the utility company.

A series of wildfires followed, blamed on PG&E's equipment and power lines which were not properly maintained.

In 2019, the utility company filed for bankruptcy after announcing a $13.5 billion settlement with fire victims and their families.

PG&E also pleaded guilty to 84 counts of involuntary manslaughter in federal court.

PG&E then began undergrounding power lines in high-risk areas, passing on those costs to customers.

Despite this, shareholders continue to be compensated.

With all this negative publicity and animosity toward PG&E, the San Francisco PUC says it's time to buy them out.

RELATED: CPUC unanimously approves new PG&E rate hike to cover wildfire mitigation projects

"We actually made three separate offers to PG&E, by letter, $2.5 billion," said Barbara Hale, Assistant General Manager of the San Francisco Public Utilities Commission.

That would cover the entire distribution system in every residential neighborhood and business, every pole, every line, underground and above.

PG&E's response...

"Not for sale, and not enough money," said Hale

"They don't want to give up San Francisco, they're making too much money here," added Redmond.

PG&E told us, "This action would have a wide range of negative impacts on safety and reliability of electric service in San Francisco."

PG&E also cited a study that found that "...when utilities were municipalized, the costs passed onto customers often rose."

The East Bay city of Hercules is an example. They tried to go public in 2002 but failed. They're now back with PG&E.

But that's not the case with the city of Alameda which has owned its utility for more than 130 years.

RELATED: CA wildfire victims to receive more money from PG&E settlement

"Our residential customers will be, next fiscal year, approximately 50 percent below PG&E, what PG&E residential customers would pay," said Nicolas Procos of Alameda Municipal Power.

But the SFPUC says they already have operating experience, serving City Hall, San Francisco General Hospital, MUNI, SFO and even the Presidio all powered by Hetch Hetchy, not PG&E.

And this time, it appears they finally have the political will of City Hall.

"We have a mayor and a board who are adamant that we pursue this," added Hale.

If PG&E declines the offer, the California PUC will then determine the estimated price of PG&E's assets in San Francisco and a takeover by San Francisco is possible.

It will be funded using a revenue bond.

It doesn't come out of taxes, it comes out of the revenue stream from selling the service," said Hale.

For Alioto, it's now a matter of '"seeing is believing."

"As Saint Francis of Assisi says, 'Try the impossible and make it possible,' that's public power, that is possible and it would be so great for our city. I just wish I could believe again that we have the elected official that had the guts to do it," insisted Alioto.

Besides, Alameda, Palo Alto, Pittsburg and Healdsburg have publicly owned power companies.

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