Open Forum: SF takeover of PG&E would make things worse

A city takeover of PG&E would complicate, not fix, the energy challenges we face. IBEW union members work at nearly every publicly-owned utility in Central and Northern California — we are in no way opposed to public power. But, let me remind you, the voters of San Francisco have twice rejected the city purchasing and administering the power grid — for three main reasons.

First and foremost, is the risk associated with running a utility under California law. The very same punishing state laws that have pushed PG&E to the brink of bankruptcy would clearly apply to a city-run utility. Under the law, if a power line or any equipment owned by a utility is involved in starting a fire — even if the utility did nothing wrong — that utility is liable for and must pay the costs associated with the fire.

For example, if there is an earthquake, and a power line owned by the city falls and sparks a fire — a city-owned utility would be on the hook for the damage (which has run into the billions of dollars in semirural areas in Northern California). Supporters of a city takeover should be prepared to answer the question: “How will you pay the billions of dollars in claims that will surely come from operating this utility in earthquake country?” Answers will no doubt revolve around asking San Franciscans to pay higher rates or a special fee — escalating the problem of affordability for working families in the city.

The second is financial. Based on what we know, the San Francisco segment of PG&E’s business may well be a cash-losing proposition. Power usage is moderate because it is an energy-conscious city in a mild climate (and thus with low air-conditioning demand), so revenue is lower than from much of the rest of the system. And a utility owned and operated only in San Francisco would mean the end to many common practices that keep costs manageable. For example, PG&E can bid jobs from Bakersfield (Kern County) to Buellton (Santa Barbara County) and Eureka (Humboldt County) to Burney (Shasta County). A municipal utility would be tied to San Francisco, which has far fewer trained utility workers because it is so expensive to live there.

Purchasing PG&E’s infrastructure in San Francisco would run, according to a Stanford energy expert, between $3 billion and $5 billion. The last time the city considered taking over PG&E, the bill was roughly $4 billion for the purchase alone (and not including the infrastructure).

That was before we recognized the full force of climate change upon California, driving the need for billions of dollars of new investment to make our electric grid more resilient.

That was before PG&E was weighed down by upward of $10 billion (or more) in fire liabilities, which would be factored into the purchase price of any piece of the utility.

Most of all, that is before policymakers fully understood the punishing burden of operating under laws that make utilities financially liable for acts of God.

San Francisco is a rich city — but even San Francisco isn’t rich enough to buy PG&E, pay all the costs of upgrading a grid not designed to meet the dangers of changing climate, and pay all fire claims arising from grid operation.

The third, and perhaps most important, is that balkanizing California’s energy infrastructure will make it much, much more difficult to effectively reduce the carbon emissions driving climate change.

Our big utilities have been tasked with leading the transition to renewable power — and they are succeeding. PG&E already delivers more than 30 percent of our power from sources the state calls renewable (which does not include large hydro facilities or rooftop solar). The company is on track to meet or exceed ever increasing renewable goals. Its scale is a key factor in helping to make the transition to 100 percent renewable energy that we know is necessary.

Even if a number of small utilities were linked or networked in some way, small companies acting independently would be hard-pressed to upgrade our state’s electric grid while continuing on the complicated path to 100 percent renewable energy.

Our union members know the energy world. And when it comes to delivering green, safe, affordable and reliable energy — we know making our utilities smaller and weaker will make power more expensive and less reliable, and would stop progress on climate change in its tracks.