PG&E

There are even more inappropriate PG&E emails

Sasha Cuttler And Mary Magee
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There are even more inappropriate PG&E emails

Even more internal Pacific Gas & Electric Co. emails – this time flagged by activists focused on safety concerns at a nuclear power plant – raise new questions about the company’s tactics of manipulating the state regulatory process.

PG&E – which is facing federal charges in connection with a 2010 fatal gas line explosion in San Bruno – has come under scrutiny in recent months due to a series of questionable email exchanges revealing a cozy relationship between company executives and members of the California Public Utilities Commission, the state regulatory body that monitors utility spending and rate setting.

Much has been made of emails spotlighted by San Bruno officials, revealing a relationship so cozy that one PG&E executive signed off on an email with a CPUC representative by writing, “love you.” 

Those exchanges were the subject of an Oct. 7 hearing at the CPUC, and could result in financial penalties if an administrative law judge cracks down on PG&E for negotiating with state officials in what’s been dubbed a “judge-shopping” scandal. On Oct. 6, PG&E self-reported even more questionable “ex parte” communications with CPUC officials, correspondence it revealed is being scrutinized by federal prosecutors.

Meanwhile, when it came to an earthquake risk assessment at Diablo Canyon, according to a legal brief filed at the CPUC by the nuclear watchdog group Alliance for Nuclear Responsibility, PG&E “brazenly ignored the commission’s requirements” for working with a state-appointed independent review panel.

The panel of independent experts was appointed because the CPUC lacked staff with the expertise needed to review seismic safety studies concerning the nuclear facility, which is located in proximity to several earthquake fault lines. 

Internal PG&E emails obtained by the Alliance for Nuclear Responsibility, which used discovery to obtain documentation through its status as an intervener in the CPUC rulemaking process, revealed that PG&E was concerned about how to field inquiries from the independent panel.

In one email, a utility executive suggested submitting “processed” data, rather than raw data, to demonstrate how it had arrived at certain conclusions.

Alliance for Nuclear Responsibility spokesperson David Weisman discussed why that matters with an analogy: “Why don’t they want anyone else to look at the raw numbers? It’s like saying, here’s the cake. You might find that it tastes a little funny, but we aren’t going to tell you what went into it.”

In another internal PG&E email, a government affairs representative went so far as to ask his coworker: “Do you believe we could get the [independent panel] ‘decommissioned?’”

Several weeks ago, PG&E announced that it had found no safety hazard at Diablo Canyon, essentially telegraphing that there’s nothing to worry about. But that determination was made before the independent review panel had a chance to review the company’s analysis, or weigh in on whether it agreed with the science supporting this finding.

“If you release a report without the panel’s review, that’s not science,” Weisman charged. “That’s propaganda.”

PG&E did not respond to a request for comment.

As the Bay Guardian previously reported, the discovery of previously undetected fault lines around Diablo Canyon six years ago set in motion a new risk assessment to determine whether a major earthquake near San Luis Obispo, where Diablo Canyon is located, would result in power plant equipment failure. State legislators passed a law mandating that these risks be analyzed – long before Japan’s Fukushima nuclear meltdown underscored the importance of taking such hazards seriously.

Now, the Alliance for Nuclear Responsibility is arguing that PG&E should not be allowed to recoup $64 million in ratepayer dollars that the CPUC agreed to set aside to fund the seismic study. “The CPUC granted PG&E ratepayer funding to carry out those seismic studies,” Weisman explained. “Our concern is that that the study itself is inadequate and poorly vetted.”

The Bay Guardian submitted several requests to speak with a knowledgeable CPUC staff member about the matter, but the agency did not grant an interview. Instead, public information officer Constance Gordon emailed a prepared statement that stated simply: “The Independent Peer Review Panel will review the seismic report and will hold a public meeting shortly to discuss it and receive public feedback.”

Interestingly, PG&E’s determination that Diablo Canyon is risk-free was issued on the very same day that the federal Nuclear Regulatory Commission publicly dismissed the concerns of Michael Peck, the former on-site safety inspector at the nuclear facility.

The senior NRC staff member made headlines for formally suggesting that the plant should be temporarily shut down until the science could prove that it would safely withstand a major earthquake. News of Peck’s “differing professional opinion” caused California nuclear activists to immediately file petitions calling for Diablo Canyon to be shut down. 

In a lengthy op-ed published in the San Luis Obispo Tribune, Peck said he stood by his conclusion.

“I have exhausted the NRC processes for raising nuclear safety concerns,” he wrote. “At every turn, the agency reinforced that their original conclusions and actions had been correct. From my perspective, I applied the same NRC inspection standards and agency rules to the Diablo Canyon seismic issues that I’ve used to disposition many other design bases issues during my 20-plus years as an inspector. Because the [differing professional opinion] was reviewed by the highest levels of agency management, I was left with the impression that the NRC may have applied a special standard to Diablo Canyon.”

Exposing PG&E’s other “cozy relationship,” with Mayor Ed Lee

Erica Hanna
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Exposing PG&E’s other “cozy relationship,” with Mayor Ed Lee

News outlets from Sacramento to Los Angeles are crowing about Pacific Gas & Electric Company’s alleged “cozy relationship” with the utlity that oversees it, the California Public Utilities Commission.

At least 41 emails obtained by the city of San Bruno reveal an intimate, friendly arrangement between the monopolistic power company and the regulators that are supposed to keep them in line. Where the public would expect a separation as hard and fast as church and state, the emails reveal a buddy-buddy relationship.

This is of no surprise to long-time Guardianistas, who may remember Rebecca Bowe’s cover story three years ago “The secret life of Michael Peevey, [5/11]” chronicling the CPUC president’s extravagant trips to Madrid, Spain and Germany with top energy officials, as well as other activities that may seem strange for an official who’s supposed to be a watchdog against PG&E malfeasance.

But if world-trekking trips to pricey hotels aren’t enough to raise eyebrows about the relationship between PG&E and its regulators, now we have suspicious emails to add to the pile.

As the San Jose Mercury News revealed:

In an April 2013 email, Carol Brown, chief of staff for Commissioner Peevey, wrote to PG&E executive [Laura] Doll and offered advice about how to handle one of the proceedings related to the San Bruno explosion. In the email, Brown said she had talked to one of the PUC administrative law judges about the matter.

“Send back a sweet note” to the PUC about the matter “and then wait for them to throw a fit” was part of Brown’s advice. Brown also said she was “happy to chat” about the matter with PG&E to help guide company officials through the PUC process.

Doll replied to Brown, “Love you. Thanks.”

Even Peevey himself emailed PG&E, offering them public relations advice. It’s like an umpire sneaking around between innings to coach a first-baseman — unseemly, and totally strange.

All of this should ring alarm bells in The City. The city of San Bruno obtained the emails through settlement of a lawsuit, which are now revealing potential corruption at top levels of the CPUC. But here in San Francisco, Mayor Ed Lee flouts public records laws and, as we revealed, drafted a policy allowing him to delete his own emails.

There’s no way we can check what Lee is saying to PG&E in emails, making exposing any alleged “cozy relationship” much more difficult than PG&E’s alleged romance with the CPUC.

And the consequences for The City are very real, as well as potentially fatal. As we’ve covered before, there are PG&E pipelines aplenty in San Francisco (including one right along Bernal Hill). When San Bruno’s pipeline exploded, eight lives were lost and many more homes destroyed.

As the San Francisco Chronicle reported last month (and as we’ve said for years), Lee already has suspiciously close ties with PG&E.

From the Chronicle:

However, multiple city officials say that Lee’s administration has consistently, and quietly, raised objections about legislation and policies that PG&E opposes. They also point to the utility’s charitable giving to the city and some of Lee’s pet projects as an example of how PG&E tries to exert its influence.

…

Critics of Lee’s relationship with PG&E extend from the political left to at least five current and former high-level city officials. In some cases, several of the sources said, that relationship appeared to be inappropriate. PG&E officials regularly went to the mayor’s office when they were unhappy with city staff members, said the sources, who requested anonymity because of their relationship with the mayor.

“They were in his office all the time, meeting with either the mayor or his staff, and seemed to directly intervene in city decisions,” said one official. “It isn’t normal for most businesses in the city to always have meetings with the mayor.”

Lee, in several interviews, dismissed the idea that he was doing PG&E’s bidding as “a little off base.”

“I look at PG&E like any other company in the city,” Lee said. “I don’t think I have any special relationship with them.”

But in the case of the mayor, we may never know how close he is with the utility, as long as his off-kilter public record laws allow him to delete any paper trail. The CPUC is discovering what Lee long ago learned from former-Mayor Willie Brown: The “E” in e-mail stands for “evidence.”

tearing up emails

Dangerous delays

Michael Redmond
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Dangerous delays

rebecca@sfbg.com

Since we at the Bay Guardian published a story flagging Pacific Gas & Electric Co.’s odd behavior of stonewalling a developer who had basic questions about a high-pressure gas pipeline running beneath his Bernal Heights building lot (see “Bernal blows up,” May 20), we’ve heard from others concerned about the company’s practices regarding safety.

PG&E has undertaken a massive pipeline improvement project to correct the underlying problems that led to a disastrous 2010 natural gas explosion in San Bruno, which destroyed a neighborhood, killed eight people, and injured 58 others.

But the repairs have been complicated by a number of factors, including inaccuracies in records that provide a foundation for the whole undertaking. Meanwhile, a fascinating document obtained by the Bay Guardian raises troubling questions about whether state regulators are taking seriously PG&E’s shortcomings in this endeavor.

Established in 1905, PG&E is California’s largest utility company. It wields tremendous political influence, particularly in San Francisco, where it’s headquartered. But the utility giant has been in hot water lately. It was indicted by federal authorities on charges of criminal negligence earlier this year in connection with the San Bruno explosion, and may soon face additional charges in a superseding indictment, the company noted in a recent regulatory filing.

PG&E’s safety upgrade project, known as the Pipeline Safety Enhancement Plan, was launched to address the underlying problems that led to the unanticipated pipeline rupture and explosion in San Bruno. That disaster brought the powerful utility under intense scrutiny, exposing a deeper pattern of negligence and sloppy record-keeping. The PSEP was rolled out as a corrective measure, in response to regulatory demands.

 

SHIFTING TARGETS

The detailed PSEP outlined how the utility would go about strength testing, replacing, and retrofitting its vast network of natural gas transmission pipelines, which comprise 6,750 miles traversing the utility’s Northern California service territory. The hefty document was submitted for CPUC approval in 2011.

However, things haven’t gone exactly as planned. Phase I of this plan was supposed to have been completed by the end of 2014 — but that’s now behind schedule, and some of the original targets have been revised.

The Bay Guardian attempted to contact both PG&E and the CPUC for this story, but did not receive responses. However, regulatory filings reveal quite a lot about the company’s progress.

A comparison of the work PG&E proposed to complete in 2011, versus what it reported having completed as of March 31, 2014, demonstrates how the massive safety upgrade project has shifted over time.

In a document submitted to the CPUC on May 22, PG&E reported that it had completed 541 miles of strength testing, as compared with 780 miles of strength testing originally proposed to be completed by the end of 2014. PG&E said it had replaced 105 miles of pipeline, as compared with the 186 miles of pipeline replacement it initially said would be done by the end of the year. It also reported installing 141 automated valves — but in 2011, PG&E told regulators that by the end of Phase I, “228 gas shut-off valves will be replaced, automated, and upgraded to enable PG&E to remotely or automatically shut off the flow of gas in the event of a pipe rupture.”

In hefty technical documents, PG&E provides reasons for why some of the targets have shifted, often the result of new information coming to light. In a June 6 CPUC filing, PG&E noted that nine scheduled pipeline replacement projects included in Phase I likely would not be completed by the end of the year, as originally planned.

This formal acknowledgement of a delay seems to substantiate the account of a Guardian source familiar with the pipeline safety upgrade work, who asked not to be identified. Work crews hired by PG&E contractors and subcontractors to perform the safety upgrades have found themselves in a holding pattern of waiting to be called out to job sites, our source said, despite the extensive planned work.

The utility typically sends work crews out to perform maintenance work during spring and summer months, so it can be wrapped up in time for winter, when there’s higher demand for gas heating.

The cost of these upgrades is shared between PG&E shareholders and revenues collected from utility customers.

 

PROBLEMS REVEALED

A major obstacle to the goal of improving safety has yet to be resolved: PG&E’s pipeline records still aren’t in order, despite a major push to iron out data in the wake of San Bruno.

Since these records are the foundation for making safety upgrade decisions, these informational gaps threaten to undermine the project. The implications of this glaring problem are outlined in a CPUC document obtained by the Bay Guardian which was circulated on an internal “service list,” but not made publicly available.

First, some background: In October 2013, PG&E submitted an update to its PSEP plan to the CPUC, which included reporting on its effort to collect and analyze pipeline records. The regulatory agency’s Safety and Enforcement Division conducted an audit of this reported progress.

The audit, which made headlines when it was released in April, commended PG&E for its work but also noted, “PG&E does not have traceable, verifiable, and complete records for every pipeline component in its transmission system.” The audit also found errors in the work papers submitted by the company to back up its claims. Nevertheless, the Safety and Enforcement Division concluded, “no imminent safety concerns arose” from the findings.

But this proclamation isn’t the final word on the matter. The Office of Ratepayer Advocates is a small division within the CPUC, which functions as a watchdog looking out for the interests of utility customers. Its comments on the audit tell quite a different story, raising questions about why the enforcement division didn’t seem to place much weight on its own findings.

In its comments, reflected in the document that was circulated internally, the ORA sharply questioned the Safety and Enforcement Division’s overarching conclusion. It should “reflect the actual findings of the audit,” the ORA wrote, recommending that the Safety Division “define what is meant by … ‘no imminent safety concerns.’

“In common language,” the ORA went on, “this would be interpreted to mean there is no situation that puts the public in immediate risk of death or serious physical harm. If that is the meaning, please confirm. If not, please clarify the meaning.”

The ORA goes on to note that such a statement is “contradicted by findings within the body of the report,” and that “it is difficult to understand how the SED Report could reach this conclusion.”

The Safety Division’s audit “documents errors that ORA would define as safety risks,” the ORA notes, such as the discovery of a pipeline that has a maximum operating pressure nearly 20 percent higher than it should be, based on the pipeline feature data, or the discovery that PG&E had been “inappropriately operating a pipeline with a reduced margin of safety.”

PG&E responded to the Safety Division’s audit, and “they view their report as final,” noted ORA spokesperson Nathaniel Skinner. As far as addressing the problems uncovered in the audit, “It’s unclear to us what the next step is for the Safety and Enforcement Division.”

SF may go through Marin County to bypass CleanPowerSF subversion

Sasha Cuttler
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106
SF may go through Marin County to bypass CleanPowerSF subversion

Just in time for Earth Day, a renewed effort to reduce the city’s carbon emissions was introduced at the Board of Supervisors yesterday [Tues/22]. Sup. John Avalos introduced a resolution calling for a study of San Francisco joining Marin Clean Energy, which provides renewable energy to that county’s residents.

The move is seen largely as an effort to circumvent Mayor Ed Lee’s opposition to implementing a controversial renewable energy plan called CleanPowerSF.

“Mayor Lee and the Public Utilities Commission objected to CleanPowerSF, but they have offered no other solution to provide San Franciscans with 100 percent renewable electricity,” Avalos said in a public statement. “With this ordinance, we can either join Marin or we can implement our own program, but we can no longer afford to do nothing.”

The resolution is the latest effort in the long saga to implement CleanPowerSF, San Francisco’s proposed renewable energy alternative to PG&E, whose current energy mix is only 19 percent renewable. Much of PG&E’s current mix is dirty and directly contributes to half of San Francisco’s carbon footprint, according to the city’s own recent Climate Action Strategy.

Joining Marin under a Joint Powers Authority would provide a vehicle for San Francisco to enact CleanPowerSF’s goals, long blocked by the mayor. San Francisco’s renewable energy effort may have lingered in legal limbo for years, but Marin made the switch to renewables in 2010.

“It’s something people want, and it also reduces greenhouse gas emissions,” Marin Clean Energy Executive Officer Dawn Weisz told the Guardian. Much of Northern California, she noted, has little choice but to use PG&E for their electricity.

“The people never chose to have a monopoly in place,” she said. “People like having choices.”

Marin chose to switch to renewable energy in 2010, and MCE offers two energy mix options: A 100 percent renewable energy option, and a less expensive 50 percent renewable option. MCE officials told the Guardian they have a 75 percent customer adoption rate, meaning most of Marin County is running on clean, renewable energy.

Using an energy bill calculator on MCE’s website, the average homeowner pays about $80 a month for their renewable energy in the summer, just $2 more than their dirty PG&E power. The program has been so successful for MCE’s approximately 125,000 customers that other cities have joined with Marin under what is called a Joint Powers Authority, allowing those cities to access MCE’s grid.

The City of Richmond joined into a Joint Powers Authority with Marin County in 2012, and Napa County also expressed interest in providing renewable energy through MCE.  That large adoption rate may be what has PG&E running scared.

“We faced very strong opposition from the incumbent utility during our launch,” Weisz told the Guardian, referring to PG&E. “Fortunately, we have a much better relationship with them now, and they serve as a good partner.”

The renewable energy is distributed along PG&E’s existing infrastructure, so the utility still has a role to play in providing electricity to Marin. But the utility certainly has worries when it comes to generating electricity, as Marin is building new sources of renewable energy up and down California.

“We have 24 different power supply contracts,” Weisz told us. This includes new solar facilities in San Rafael and the Central Valley, and renewable energy sources in Roseville and and Placer County.

Though other cities have signed on to receive energy through Marin County’s MCE program, San Francisco joining would be another ballgame entirely, Weisz said.

MCE has a policy of incremental expansion, she told us, and defines potential affiliate cities and counties as having fewer than 30,000 customers who are less than 30 miles away. Though San Francisco is a stone’s throw from Marin County, the potential customer base is huge: San Francisco has a population of over 800,000 people.

“It would require some analysis,” Wisz said dryly.

MCE’s analysis to include Napa County in its energy mix took 60 days, she said. Notably, San Francisco may produce its own power and use its own mix, and simply use MCE’s billing setup. Basically, San Francisco would provide energy through CleanPowerSF, but MCE would be a contractor that administers San Francisco’s program.

But joining into Marin’s renewable energy program has more hurdles than just figuring out the mix. Clean Power SF is a Community Choice Aggregation program, defined by state law as exactly that — part of the community. Jumping over to Marin may create a legal mess for San Francisco, but there is hope.

Assembly Bill 2159, introduced by Assemblyman Tom Ammiano, would allow a county’s Board of Supervisors to approve joining a Joint Powers Authority with another municipality, in this case, allowing San Francisco to join up with Marin, while still creating its own CCA program.

The bill just cleared the Assembly Utilities and Commerce Committee yesterday, and has a ways to go.

If that sounds like a legal headache, it is. But advocates say its necessary because Mayor Ed Lee has “stacked the deck” at the San Francisco Public Utilities Commission, hiring people friendly to blocking CleanPowerSF on his behalf.

“The main purpose of passing it is to get through the mayor’s log jam,” clean power advocate Eric Brooks told the Guardian. “We want San Francisco to go faster and make more green jobs.”

And, of course, to reduce greenhouse gas emissions. Avalos’ office estimates that in the time the mayor has stalled Clean Power SF, San Francisco has generated 80 million pounds of CO2.

Federal criminal indictment of PG&E doesn’t go far enough

Sasha Cuttler
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83
Federal criminal indictment of PG&E doesn’t go far enough

  A federal grand jury in San Francisco yesterday issued a criminal indictment against Pacific Gas & Electric for negligence in the 2010 gas pipeline explosion in San Bruno that killed eight people and destroyed an entire neighborhood. That’s significant and serious, but it also falls far short of what this rapacious company and its conniving executives — none of whom face personal criminal charges — should be facing.

The indictment and media reports on it omit key details of what happened leading up this tragic and entirely preventable explosion, buying into the fiction that there is a meaningful difference between PG&E Co., the regulated utility, and PG&E Corp., the wealthy and powerful Wall Street corporation. This is a stark example of how corporations are given all the rights of individuals, but accept few of the responsibilities, with the complicity of the political and economic systems.

The 12-count indictment focused on violation of the Pipeline Safety Act, which requires companies to maintain their potentially dangerous pipelines, including keeping detailed records and doing safety inspections that would detect flaws like the faulty weld that caused the San Bruno explosion on Sept. 9, 2010 – work the company negligently failed to perform.

But PG&E’s wanton disregard for public safety, combined with the greed and shameless self-interest of then-CEO Peter Darbee and other executives, goes far deeper than that. A report by the California Public Utilities Commission released in January 2012 found that $100 million in ratepayer funds that had been earmarked for pipeline maintenance and replacement, including this section in San Bruno, was instead diverted to executive bonuses and shareholder profits.

“PG&E chose to use the surplus revenues for general corporate purposes,” the audit said, noting that the company was flush with cash at the time and there was no good reason to neglect this required maintenance.

And in 2010, those questionable corporate purposes included spending more than $45 million to write and promote Prop. 16, a June 2010 ballot measure that would have required approval by two-thirds of voters whenever cities wanted to start community choice aggregation programs such as San Francisco’s proposed CleanPowerSF. California voters rejected that outrageous ruse by more than a 2-1 margin – so Mayor Ed Lee and his appointees were forced to kill CleanPowerSF on their own last year.

PG&E maintains the explosion was just an accident.

“San Bruno was a tragic accident. We’ve taken accountability and are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so,” PG&E CEO Tony Early, who was hired after the explosion, said in a prepared statement. “We want all of our customers and their families to know that nothing will distract us from our mission of transforming this 100-plus-year-old system into the safest and most reliable natural gas system in the country.”

But this “tragic accident” was foreseeable and preventable, particularly if PG&E was spending our ratepayer money on the system maintenance it was allocated for, instead of trying to fool us with a deceptive and myopic political campaign. Those were decisions made by real people, including Darbee and others, decisions that killed innocent people – and they should be held accountable. Neither this indictment nor a previous civil settlement go far enough.

PG&E’s employee union, IBEW Local 1245, continues to act as an apologist for the company executives, issuing a statement that in part says, “The federal indictment filed April 1st against the company says that PG&E willfully failed to identify and evaluate threats to its transmission pipelines. We know of nothing that would rise to the level of willful. It is possible there are things we don’t know. But based on what we do know, the company failures that led to the San Bruno explosion were not willful.”

Meanwhile, even some PG&E shareholders are siding with the company’s federal prosecution while bringing a shareholder lawsuit seeking to recover some of the diverted funds. Their high-powered attorney, Joe Cotchett, issued a statement today that said, “We welcome yesterday’s indictment by the federal grand jury of PG&E on criminal charges that it violated federal pipeline regulations. It is clear the federal government agrees with us that PG&E chose profits over safety. The indictment comes as no surprise, as it closely mirrors the detailed complaint we filed months ago against PG&E’s officers and directors, after our own extensive investigation.  The indictment states that PG&E ignored and failed to properly identify potential threats to gas pipelines, failed to gather relevant data, maintained flawed records, and as a result, was unable to accurately assess the dangers related to its lines that could have prevented the explosion. On behalf of the shareholders of PG&E, we intend to amend our complaint to add some additional facts stated in the indictment.”

“Our complaint alleges that PG&E’s executives dropped the ball and failed to implement safety measures despite numerous red flags raised by Company insiders with risk management responsibilities. We allege PG&E has already incurred charges of about $1.83 billion related to the San Bruno accident and natural gas matters. In its annual report, PG&E admitted that this criminal investigation could expose the Company to even greater losses. Our complaint also alleges that PG&E’s Board sponsored reviews of its risk management practices revealing that PG&E was in ‘crisis’ mode prior to the accident, and that, in 2007, PG&E’s newly-hired Senior Vice President of Engineering and Operations determined that the Company’s Enterprise Risk Management program ‘seems unactionable because almost everything is broken.’”

This is the company that Mayor Lee praises as a “great company that gets it,” supporting its continued monopoly control of San Francisco’s energy system and subverting a city proposal to provide renewable energy to city residents, even as the threats posed by global warming increase, as this week’s report by the United Nations Intergovernmental Panel on Climate Change warns.

This is a sick system, and something needs to change.

Clean Power SF still moving forward

Erica Hanna
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Clean Power SF still moving forward

news@sfbg.com 

Dec. 19 marked the 100th anniversary of the Raker Act, federal legislation that specifically called for San Francisco to directly distribute the water and electricity generated by the O’Shaughnessy Dam to its residents and for their benefit. The city does so with the water, through the San Francisco Public Utilities Commission, but Pacific Gas & Electric used its power and connections to take control of the electricity and keep it, corrupting the political system for nearly a century in the process.

“The result: San Francisco has paid through the nose to PG&E for its power and the city loses about $30 million a year in profits it would get from a public system,” journalist J.B. Neilands wrote in the March 27, 1969 issue of the Bay Guardian, the first of dozens of stories we’ve written on the topic, spanning many unsuccessful public power campaigns, each one dominated by millions of dollars in PG&E spending.

Meanwhile, San Francisco’s longstanding effort to develop a municipal renewable energy program has been stymied by politics, but certain aspects of the plan are advancing nevertheless.

At a Dec. 13 meeting of the Local Agency Formation Commission (LAFCo), a committee comprised of members of the Board of Supervisors that has been working to develop CleanPowerSF for years, Sup. London Breed called for putting out a Request for Proposals to develop a concrete plan for building out local renewable energy infrastructure. LAFCo adopted the motion.

With plans for solar panel arrays or wind power facilities that would generate hundreds of megawatts of electricity for the municipal energy program, the build-out is a key aspect of the plan that could lead to job creation and stable electricity rates in the long term.

Earlier this year, members of the San Francisco Public Utilities Commission, a body composed of mayoral appointees, refused to approve a not-to-exceed rate for the program, effectively obstructing any forward progress.

“This does not get around the political problem we have,” said Eric Brooks, a longtime advocate of CleanPowerSF. “On Aug. 13, from [the SFPUC’s] standpoint, they put the program on hold.” Nevertheless, “the idea is to work on all the other things, and get those things done.”

Project proponents plan to bring on a consultant to hash out more tangible goals with regard to job creation, and then use those shovel-ready plans to bring trade unions on board.

The political pressure against CleanPowerSF, fueled by groups associated with PG&E in political alignment with Mayor Ed Lee, is formidable. Yet Breed and others remain undeterred. “We want labor to be a partner on this,” Breed told the Bay Guardian. “We want to make sure that it’s clear, and more importantly, we want it to be a strong proposal. … My goal is to make it difficult for them to oppose it.”

A century after the Raker Act, San Franciscans are still illegally denied public power

Sasha Cuttler
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27

The San Francisco Examiner has a good story on today’s 100th anniversary of the signing of the Raker Act, federal legislation that allowed San Francisco to build a dam in Hetch Hetchy Valley, a campaign championed most fervently at the time by the Examiner’s then-Publisher William Randolph Hearst.

The article was a good roundup of issues related to the Raker Act, and it included ongoing efforts by the group Restore Hetch Hetchy to try to tear down the dam, but there was a key aspect of the Raker Act that the Examiner left out, one that has been championed by the Bay Guardian over the years.

The Raker Act specifically called for San Francisco to directly distribute the water and electricity generated by the O’Shaughnessy Dam to its residents and for their benefit. The city does so with the water, through the San Francisco Public Utilities Commission, but Pacific Gas & Electric used its power and connections to take control of the electricity and keep it, corrupting the political system for nearly a century in the process.

“The result: San Francisco has paid through the nose to PG&E for its power and the city loses about $30 million a year in profits it would get from a public system,” journalist J.B. Neilands wrote in the March 27, 1969 issue of the Bay Guardian, the first of dozens of stories we’ve written on the topic, spanning many unsuccessful public power campaigns, each one dominated by millions of dollars in PG&E spending.

Section 6 of the Raker Act says that the city “is prohibited from ever selling or letting to any corporation or individual, except a municipality or municipal water district or irrigation district, the right to sell or sublet the water or the electric energy” generated by the dam.

That long-standing violation could become an issue that threatens San Francisco’s control over its main source of clean water and power if Save  Hetch Hetchy gains traction in the courts with a lawsuit that it is pledging to file.

While PG&E doesn’t wield the same strong influence that it once did at City Hall, thanks partly to years of aggressive overreach that soured many local officials on the powerful utility, it does still retain close ties to former Mayor Willie Brown (an attorney who has been on retainer with PG&E for years) and current Mayor Ed Lee, who has sabotaged the latest half-step toward public power, CleanPowerSF.    

Mayor Lee supports PG&E’s monopoly

Sasha Cuttler
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21
Mayor Lee supports PG&E’s monopoly

After watching Mayor Ed Lee and his appointees subvert the launch of CleanPowerSF and support PG&E’s illegal monopoly control of local energy users — and PG&E’s regular attempts to greenwash its dirty power portfolio — artist Michael Ortlieb developed and submitted this editorial cartoon. Enjoy. 

Is Art Torres helping PG&E, helping his son’s political career, or both?

Sasha Cuttler
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54

As I’ve been reporting on how CleanPowerSF is being blocked by Mayor Ed Lee and his political appointees on the San Francisco Public Utilities Commission, one piece of the puzzle that I couldn’t quite figure out was why SFPUC President Art Torres took the position he did, offering little public explanation for his stance.

“His opposition to the rate vote was strange because he didn’t give clear reasons,” Eric Brooks, who has been led the grassroots campaign in support of CleanPowerSF, told us. Torres also hasn’t returned Guardian calls on the issue, and he refused a formal request from Sup. John Avalos to explain his position.

As a former state senator and longtime former chair of the California Democratic Party, Torres certainly has connections to Pacific Gas & Electric and the array of politicians that support it, include Willie Brown. But that just didn’t seem like enough for a senior statesman with a decent environmental record to sabotage San Francisco’s only plan for building renewable energy projects.

But some of my political sources have clued me into another possible motive, and it seems to make sense. Art Torres’ son is Joaquin Torres, who works in the Mayor’s Office and who Lee in February appointed to the Housing Commission, where Torres now serves as president.

And here’s the kicker: those sources also say that Joaquin Torres has already started running for the District 9 seat on the Board of Supervisors, which is now held by Sup. David Campos, who is running for Tom Ammiano’s seat in the California Assembly. And if Campos wins that race next year, Mayor Lee will get to fill it, possibly naming Torres to one of the most progressive seats in the city.

So dad gets to score political points with some powerful friends, and help launch his son’s political career in the process. These motives are beginning to add up.

Joaquin Torres is now deputy director of the San Francisco Office of Economic and Workforce Development, “where he leads Mayor Lee’s Invest In Neighborhoods Initiative to leverage City resources across city departments to maximize positive economic and social impact in low-moderate income neighborhoods and throughout San Francisco’s commercial corridors,” the Mayor’s Office wrote in February when Torres got appointed to the Housing Commission.

Sounds like the perfect job for someone being groomed for the Board of Supervisors, where he could have a serious impact on this city’s political dynamic, tipping policies in the neoliberal to moderate direction of expanding corporate welfare programs and speeding up gentrification.

Neither Torres has returned our calls, but I’ll update this post when and if they do. And while this is clearly just political speculation and conjecture, I have a feeling that I’m onto something here. So remember where you read it first.  

Mayor Lee distorts reality in defending CleanPowerSF obstruction by his appointees

Sasha Cuttler
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Mayor Lee distorts reality in defending CleanPowerSF obstruction by his appointees

Mayor Ed Lee yesterday answered a series of five questions from the Board of Supervisors about CleanPowerSF, the renewable energy program it approved last year on a veto-proof 8-3 vote, but which three of Lee’s appointees on the San Francisco Public Utilities Commission are now blocking.

Lee reaffirmed his opposition to the program and support for the three commissioners who are refusing to approve a maximum rate for the program, while making a series of statements that were misleading, contradictory, and, according to Sup. John Avalos, some outright falsehoods.

CleanPowerSF would group tens of thousands of city residents into a renewable energy buying pool, a system called Community Choice Aggregation authorized by state legislation, which would compete against Pacific Gas & Electric’s illegal local monopoly. Initally, the energy would be purchased under a contract with Shell Energy, but the main goal of the program is to build city-owned renewable energy facilities by issuing revenue bonds supported by the program’s ratepayers.

Yet the program Lee described has little resemblance to CleanPowerSF — and his statements of support for the concept belie his longstanding opposition to the program and support for PG&E, whose union is leading the campaign to kill CleanPowerSF.

“I know that many members of the Board of Supervisors are upset,” Lee began in his first answer to similar questions posed by Sups. Eric Mar, David Chiu, London Breed, David Campos, and John Avalos, who all represent the odd-numbered districts whose turn it was to submit questions to the mayor for this month’s appearance.

Lee then explained that one of the duties of  the SFPUC is to protect ratepayers, which he called “the overriding concern they have when faced with any issue,” adding that, “The commission ultimately decided that the rate wasn’t a fair rate.”

Ironically, the top rate that the commission is being asked to approve in order to finally launch CleanPowerSF was just 11.5 cents per kilowatt-hour, only slightly more than current PG&E rates and a substantial reduction from the rate that was discussed last year when supervisors approved the program.

PG&E, Lee, and other critics of the program had attacked its high cost, so SFPUC staffers tweaked the program to allow the initial use of Renewable Energy Credits, which support the creation of renewable energy projects, rather than being purely juice directly from solar, wind, and other renewable sources, which is more expensive.

So Lee criticized that change as a departure from what the board approved last year, telling the supervisors that the program should be at least “95 percent renewable on day one,” saying that, “This is what a green power program should look like.”

Yet when it did look like that, Lee opposed it, something he didn’t mention yesterday. And yet he still made the argument that the SFPUC was simply exercising its fiduciary responsibility in blocking a program that has gotten cheaper than when the board approved it.

“The San Francisco Public Utilities Commission did its job in protecting ratepayers,” Lee said. “I agree with the majority of the PUC.”

So, on one hand, Lee said that CleanPowerSF has “gotten progressively more expensive as time goes on,” citing statements made years ago about the goal of trying to meet-or-beat PG&E’s rates, which have been subsidized by taxpayers over the years.

And when the program then got close to matching those rates, he criticized the use of RECs to get there, saying the climate change benefits “need to be real and tangible and not based on vague promises.”

Yet even city-commissioned studies have shown that San Francisco won’t meet its own greenhouse gas reduction goals without substantially changing the energy portfolio of city residents, and CleanPowerSF is the only plan on the table to get there, except for PG&E’s vague promises to offer more renewable energy in the future.

While Lee touted city efforts to improve the energy efficiency of commercial buildings and the recent launch of a regional bike share program — neither of which will come close to meeting city climate change goals — even he acknowledged the “need to expand our in-city renewable energy generation,” citing the $4 million SolarSF as an example.

But Lee never made reference to CleanPowerSF’s plan to build up to $1 billion in renewable energy projects whose impacts would be far more impactful. Instead, he said the program “creates no local jobs,” which wouldn’t be true during the buildout phase.

While praising PG&E, Lee also glossed over the fact that a majority of supervisors still support CleanPowerSF, and that the SFPUC vote was supposed to be on the rate and not these ancillary issues, raising fundamental democratic issues when three mayoral appointees can override the decision of elected supervisors who represent all city residents.

“When a final project is so vastly different than the original intent, the San Francisco Public Utilities Commission has to intervene,” Lee said.

Avalos called many of Lee’s statements “lies,” so I followed Mayor Lee back to his office after the hearing and we had the following conversation as several reporters from other media outlets listened in:   

SFBG: Supervisor Avalos just said that you’ve made a number of statements that are not factually accurate, and certainly misleading, including saying that the program has changed substantially. Given that you opposed the program initially, and you seem to make statements that criticize those changes, and clearly the majority still supports it, how can you make the argument that the PUC is acting against it because the program has changed?

Mayor Lee: Well, you know, I know that elements of this are somewhat complicated cause you have to actually read a lot of volumes of materials to understand the choice aggregation program, cause it has those three aspects and I would….

SFBG: As guidelines, not as rates….

Mayor Lee: I would point to those numbers that were discussed at the board and presented to the [SF] Public Utilities Commission, because that’s what I’m quoting from. I’m taking it, not from even verbiage, I’m taking it exactly from facts that were presented at the commission at the Board of Supervisors and I specifically lifted quotes from the board about their comments about local jobs and all the other things, so, I don’t think I’m inaccurate at all. I think I’m actually quite on point.

SFBG: But the rates have come down from when they approved it and you made it sound like the rates have gone up.

Mayor Lee: The rates were up and they came down in trade off with less green.

SFBG: Right…

Mayor Lee: That’s about the point I was trying to make is that we wanted these other goals to happen and they couldn’t happen cause people were trading off things in order to set the rates and that was going to become a bigger and bigger gap as to what the original goals were. That’s the way…

SFBG: But the board clearly wants this program. Why, as a matter of policy, as a matter of city procedure, why isn’t the elected body the one to make this decision, instead of your appointees?

Mayor Lee: Well, I think that’s the whole reason why they presented it to the Public Utilities Commission. They’re charter mandated to set these rates. It’s not just an automatic acceptance of what the board says. They also independently review what the board has said. And in their independent review, they said they had gone well beyond what they stated their goals were and so they couldn’t set the rates and still honor all the goals that the board was suggesting.

SFBG: But those rates are less than what the Board has approved. How can they be exercising fiscal oversight… I mean, it doesn’t make any sense.

Mayor Lee: I think we have a big disagreement there. They’re mandated by the charter to set those rates responsibly, not just to follow what the board has stated and so, in their independent review, they went and reviewed all the goals that the board has said and said ‘This is not the program that they have stated should be fulfilled.’

SFBG: Even though the majority of the Board of Supervisors disagree with that statement that you just made?

Mayor Lee: Well, you know, then again, are we not respecting peoples’ right to disagree over what is being done here?

SFBG: But your argument that the program changed from what they approved, a  majority is saying ‘that’s not true,’ that you’re misrepresenting that.

Mayor Lee: No, I don’t think that I’m misrepresenting that. I disagree with that.

SFBG: A majority of the Board of Supervisors who approved it says you are.

Mayor: Well, I disagree with that assessment.

 

 

 

Supervisors to grill Mayor Lee over CleanPowerSF sabotage

Sasha Cuttler
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Supervisors to grill Mayor Lee over CleanPowerSF sabotage

Mayor Ed Lee will be on the hot seat for his unqualified support of Pacific Gas & Electric Co. and his related opposition to the CleanPowerSF renewable energy program, which his appointees to the San Francisco Public Utilities Commission are trying to sabotage, when he shows up for the monthly mayoral question time at the Board of Supervisors meeting on Tuesday.

Hopefully the boring, scripted question time format that Lee created in collaboration with Board President David Chiu will finally give way to what the voters intended when they required the mayor to engage with the legislative branch: an actual, substantive, back-and-forth policy discussion meant to illuminate issues of public concern.

Because that’s what’s needed on this important issue. After more than a decade in the making, the board last year cast a historic vote to create the project on a veto-proof 8-3 vote. But the SFPUC is now refusing to set the maximum rate for the program, which should be a fairly technical and pro forma action, instead raising unrelated issues that the supervisors have already considered. In other words, unelected mayoral appointees have decided to veto a hard-won democratic gain, creating something akin to a constitutional crisis in a city that values public process and input. 

So for the first time ever, all the of the supervisors scheduled to ask questions (it rotates because odd- and even-numbered districts each month) have focused various aspects of a single important issue. Even though Lee has mastered the politicians’ dark art of speaking without saying anything, this one should still be a doozy as supervisors ask the following questions:

1. Mayor Lee – As you know, San Francisco has set ambitious goals to combat climate change. In many ways, the City is making great strides in this direction, from increasing bicycling, to pursuing zero waste goals, to hiring a new, excellent environmental policy advisor in Rodger Kim who has a strong background in environmental justice and community engagement. However, the Public Utilities Commission has repeatedly failed to set rates for CleanPowerSF, the most impactful local proposal yet designed to curb carbon emission. This program was adopted by the Board of Supervisors, the legislative body of the City. However, there are some allegations that your office is stalling its implementation. What specifically are you doing, as the City’s head executive, to implement this policy in a timely fashion? (Supervisor Mar, District 1)

2. Mr. Mayor, can you please outline your objections to the CleanPowerSF program as approved last year on an vote 8-3 by the Board of Supervisors? (Supervisor Chiu, District 3)

3. Recognizing the constraints imposed by state law, particularly with respect to opt-out provisions, how would a clean power program need to be structured in order for you to support it? Are you willing to work with the Board of Supervisors, and have your staff and commissioners work with the Board of Supervisors, to revise CleanPowerSF so that you can support it? Can we come to the table and make clean power a reality without any further delay? (Supervisor Breed, District 5)

4. The Board of Supervisors has been very supportive of CleanPowerSF. Do you think it is appropriate for a City Commission to go against the policy the Board of Supervisors set when it approved CleanPowerSF? (Supervisor Campos, District 9)

5. Days after the one-year anniversary of the 2010 PG&E San Bruno pipeline explosion, you called PG&E a “great local corporation” and a “great company that gets it.” However, the examples of PG&E’s immoral, illegal, and greedy behavior are legion:

– PG&E avoided admitting fault in the San Bruno explosion, failed to cooperate with the investigation, fought against paying a fair fine, and hopes to make ratepayers pay for the fine.

– PG&E’s current electric mix is only 20% California-certified renewable.

– Outages of PG&E-owned streetlights have increased over 400% in recent years, and PG&E wants to increase by $600,000 a year the amount it charges the City for streetlight maintenance without committing to improved service.

– Despite the fact that PG&E already has some of the highest electric rates in the country, PG&E is seeking to further increase rates in each of the next three years.

– While PG&E has proposed a new Green Tariff program, it remains only a vague proposal and there is no guarantee that it will ever be implemented.

– PG&E’s previous green campaigns-such as ClimateSmart and “Let’s Green This City”-have proven to be short lived and ineffective public relations stunts. Multiple public surveys conducted by the PUC to gauge the level of support for CleanPowerSF have all found that a substantial number of San Franciscans want the opportunity to pay a slight premium for a 100% renewable alternative to PG&E.

Why does your office continue to oppose providing City ratepayers with an alternative to PG&E’s monopoly by implementing CleanPowerSF? (Supervisor Avalos, District 11) 

Fizzling energy

Michael Redmond
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Fizzling energy

A plan for a municipal power program that would offer 100 percent green energy to San Francisco customers was stalled on Aug. 13, prompting Sup. John Avalos to explore what legal options might be available to bring the program to fruition without further delay.

Prior to that San Francisco Public Utilities Commission hearing, supporters of CleanPowerSF rallied on the steps of City Hall, urging Mayor Ed Lee and members of the commission to approve a not-to-exceed rate, a technical hurdle that must be cleared before the program can advance. SFPUC staff cannot formalize a contract for purchasing power on the open market until that maximum rate has been formally established, so as long as it goes unapproved, CleanPowerSF lingers in limbo.

“We call on the Mayor’s Office to stop impeding progress with heavy-handed politics,” said Shawn Marshall, executive director of Local Energy Aggregation Network (LEAN) — a group that assists with clean-energy municipal power programs. “And we ask the San Francisco Public Utilities Commission to stay focused on its job of implementing a program that was approved by the San Francisco Board of Supervisors last September. That’s almost a year ago, folks.”

But after more than two hours of public comment in which dozens of advocates voiced support for moving ahead with the program, SFPUC commissioners voted down a motion to approve the rate, leaving CleanPowerSF in limbo with no clear path forward.

 

COMMISSIONER CONCERNS

Commissioners Francesca Vietor and Anson Moran were the only ones on the commission to favor the rate approval, while Ann Moller Caen, Vince Courtney, and President Art Torres shot it down.

“I feel like today is a historic moment for the SFPUC as well as the city of San Francisco,” Vietor said as she introduced the motion at the beginning of the meeting, “to become a leader in combating climate change.”

Rather than focus on the question of whether or not to establish a top rate of 11.5 cents per kilowatt-hour (a reduced price from an earlier proposal that sparked an outcry from critics because of the sticker shock), Torres and Caen criticized CleanPowerSF before casting “no” votes.

Caen said she’d “always had problems with the opt-out situation,” referring to a system that will automatically enroll utility customers into the program, while Torres criticized the project for changing shape since its inception, saying, “at the end of the day, this is not what San Franciscans had anticipated.”

But after straying well beyond the scope of a discussion about the not-to-exceed rate, commissioners who shot down CleanPowerSF didn’t provide SFPUC staff with any hints on how to allay their concerns. Some might interpret the hearing outcome as a death knell for CleanPowerSF, but Avalos has taken up the cause of pushing for implementation.

Unable to attend the hearing in person, Avalos sent legislative aide Jeremy Pollock to convey his concerns. “We all understand the politics of the situation,” his statement noted. “The Board of Supervisors and every major environmental group in the City support this program. The Mayor, PG&E, and its union oppose it. I know you are feeling a lot of pressure from both sides. But we cannot afford further political gamesmanship to cause additional delays in an attempt to kill this program.”

The effort to implement CleanPowerSF is mired in politics. For Pacific Gas & Electric Co., Northern California’s largest utility, the enterprise represents an encroachment into prime service territory and a threat to the power company’s monopoly.

PG&E has long been highly influential at San Francisco City Hall. It has funded many political campaigns and curried favor with powerful figures (former San Francisco Mayor Willie Brown, known to be a frequent dining companion of the mayor, has been richly rewarded for his consulting services, for instance). Mayor Ed Lee opposes the program, and holds the authority to appoint commissioners to the SFPUC.

 

CLASH OF CITY BODIES

The City Charter gives the SFPUC the responsibility of establishing fair and sufficient rates for the city’s utility operations. But Avalos charged that “any further delay will essentially show that we are in a constitutional crisis caused by a city department failing to carry out a policy approved by a veto-proof supermajority of the Board of Supervisors.”

The supervisor added that if the rate failed to win approval at the hearing, he would call upon the City Attorney to explore legal options “to resolve this type of stalemate—including the possibility of drafting a Charter Amendment. CleanPowerSF is too important and the threat of climate change is too significant to allow this program to die on the vine. It is time for leadership.”

Pollock said on Aug. 15 that Avalos was still awaiting a response from City Attorney Dennis Herrera’s office.

Meanwhile, activists who’ve attended countless meetings with SFPUC staff to move the program forward expressed frustration in the aftermath of the vote. “Things are in this holding pattern, and the dissenting commissioners did not provide a way forward,” noted Jed Holtzman, an advocate with climate group 350 Bay Area. “They just kind of said, ‘no.'”

The weekend before the hearing, mailers paid for by International Brotherhood of Electrical Workers Local 1245, a union representing PG&E employees, blanketed Noe Valley residences with fliers. Depicting seashells besmirched with oil, the mailers seized on the involvement of Shell Energy North America, an oil giant with a contract pending with the SFPUC to administer power purchases for the first four and a half years of the program.

Shell’s involvement presents something of a challenge for advocates, who have long advocated for a program that would be run entirely by the SFPUC with a centerpiece of renewable power generation facilities that could double as a source of local job creation.

The initial program phase looked quite different: Shell would purchase green power on the open market, making CleanPowerSF significantly more expensive than PG&E. To address that concern and lower rates, SFPUC staff recently allowed the use of Renewable Energy Credits (RECs), more affordable units accounting for green power produced somewhere in California as opposed to electricity coming straight over the power lines.

Despite the drawbacks of a more watered down start to the program and the involvement of a notorious fossil fuel company, progressives and major environmental organizations strongly advocated for moving forward with the Shell contract to give the SFPUC a shot at positioning itself financially to float revenue bonds for build-outs of a local green energy infrastructure.

“The plan is to completely replace this with the build-out,” noted John Rizzo, who sits on the executive committee of the San Francisco Bay Chapter of the Sierra Club.

 

BUILDING LOCAL PROJECTS

A 134-page report prepared by Local Power Inc. described in careful detail how the city could use wind, solar, geothermal, energy efficiency, and other measures for a viable program. While SFPUC representatives have indicated that some of those recommendations will still be implemented, the agency is no longer working with Local Power.

“Our draft model was 1,500 jobs per year,” Paul Fenn, founder and president of Local Power, wrote in an email to the Guardian. “But earlier runs show as many as twice that many jobs, and we projected the higher end for the final model.” In the end, though, “SFPUC declined to continue with completion of this work, so we are in limbo — apparently an organization without allies,” Fenn added. Asked about this, Kim Malcom, the SFPUC’s director of CleanPowerSF, told the Guardian that Fenn’s analysis was based on the assumption that the agency would issue bonds totaling $1 billion. “We have no confidence that we could issue a billion dollars worth of bonds in the first few years of the program,” she said, noting that the highest the agency expected to go was closer to $200 million. And at this point, it remains to be seen whether CleanPowerSF will move ahead at all. “One of the difficulties we face is that we can’t move forward without a rate,” SFPUC spokesperson Charles Sheehan noted. “In terms of launching and implementing, we can’t do that until we have a rate structure,” and now that the utility board has blocked that from happening, there is no clear path forward. Still, activists who are serious about CleanPowerSF believe it’s key for positioning San Francisco as a leader in the fight against climate change. “CleanPowerSF is a crucial step for achieving California’s 2020 greenhouse gas goals,” Bill Reilly, chairman emeritus of the World Wildlife Fund and a former EPA administrator, wrote in a letter to Lee. “It’s also an essential model &ldots; as cities and communities are compelled to address the problems fueled by climate change.”

PG&E union spreads lies about CleanPowerSF

Sasha Cuttler And Mary Magee
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PG&E union spreads lies about CleanPowerSF

San Francisco’s municipal power agency is gearing up to launch one of the most climate-friendly alternative energy programs in the country, but the forces behind a misleading opposition campaign seek to torpedo that effort.

This past weekend, glossy ads depicting seashells and spilled oil blanketed the doorknobs of Noe Valley residences. Paid for by IBEW 1245, the union that represents employees of Pacific Gas & Electric Co., the door hangers conveyed the fear-mongering message that CleanPowerSF “isn’t clean. It’s dirtier than our current power.”

To put it bluntly, that’s bullshit.

Taking them at face value, you might conclude that Shell was about to begin drilling offshore in the San Francisco Bay and that city officials were planning to meet the city’s energy needs with a polluting power plant run solely off tar sands oil. They might even club some baby seals while they were at it.

What’s really happening is that the San Francisco Public Utilities Commission is gearing up for a hearing on Tue/13 to discuss rate setting for CleanPowerSF, a municipal green energy program that’s been in the works for years. As the power agency inches closer to a full program launch, PG&E and its employees are worried they’ll lose business when San Francisco customers are automatically enrolled in the CleanPowerSF program.

The new power program will continue to use PG&E infrastructure and its existing billing system, but customers’ homes will be powered with a greener electricity mix procured through the city-run program, which is contracting with Shell Energy North America to purchase electricity on the open market from a variety of green power sources.

Naturally, San Francisco is teeming with savvy environmentalists who aren’t buying the slick oppositional blitzkrieg. On Aug. 13, some will band together to set the record straight when a host of representatives from the Sierra Club and others rally at City Hall at noon to express support for immediate implementation of CleanPowerSF.

“Clean energy aggregation is on the rise across the country, making an immediate and direct impact on climate emissions,” said Shawn Marshall, Director of LEAN Energy US. LEAN works with organizations that use the municipal power-purchasing model that CleanPower SF is based on. “The only thing blocking progress in San Francisco is corporate politics, and we encourage the city to deliver on its environmental promises by pressing ahead with CleanPowerSF.”

In a letter to San Francisco Mayor Ed Lee, former EPA administrator and World Wildlife Fund Chairman Emeritus William K. Reilly emphasized that CleanPowerSF “is a crucial step for achieving California’s 2020 greenhouse gas goals. It’s also an essential model for California and the rest of the country as cities and communities are compelled to address the problems fueled by climate change.”

Back to those misleading ads. While it is true that Shell is an oil company with a shoddy track record of human rights abuses, it is not true that the energy supplied by CleanPowerSF will be dirtier than electricity provided by PG&E.

To the contrary, only 20 percent of PG&E’s energy mix is derived from green power sources, while the majority of its electricity is generated by nuclear facilities or natural gas power plants. PG&E is also the company responsible for the hexavalent chromium groundwater contamination in the California town of Hinkley, in the Mojave Desert, which provided the basis for the movie Erin Brockovich.

And more recently, PG&E was responsible for the deadly pipeline explosion in San Bruno, which leveled an entire neighborhood. In comparison, CleanPower SF will offer a 100 percent renewable energy mix out of the starting gate.

Some of that mix will initially be derived from renewable energy credits. Called RECs, they’re cheaper because they are “credits” accounting for green power generated somewhere, as opposed to actual green power coming straight over the power lines.

But it’s important to note that the initial use of RECs is a pricing strategy designed to put the agency in a financial position to support green power projects here in San Francisco a little further down the road.

The long-term plan of constructing green power facilities locally would create permanent, decent-paying jobs. It would also supply San Franciscans with electricity generated with technology that can harness the unlimited power potential of the California sun, or the wind that blows in off the Pacific Ocean. This is the outcome that PG&E affiliates seek to thwart, because they fear profit loss.

A few months ago, in an interview with the Guardian, SFPUC spokesperson Charles Sheehan emphasized that it had taken many conversations to get to the point that the agency has finally reached.

“We’ve lowered the rate, we’re now more competitive with PG&E’s baseline offering, and we’re on parity with their potential green tariff program,” he explained. Speaking of a dedicated revenue stream that would go toward funding local clean-power projects, he said, “That line item is really critical to get us to the build-out that we’ve all collectively envisioned as a staff, and as a community.”

Key CleanPowerSF facts matter more than myriad details

Sasha Cuttler
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It’s great to see our colleagues down the hall at the Examiner and SF Weekly covering the evolving details of CleanPowerSF, San Francisco’s plan for offering renewable energy options to city residents. And we’re all sure to see another barrage of confusing and arcane details being blasted in all directions by Pacific Gas & Electric and its union as they try to derail the program and maintain their monopoly.

These details do matter, but not nearly as much as a couple of important central facts that are too often overlooked or are given short shrift. One, this is the city’s only plan for meeting its greenhouse gas reduction goals, the one proposal out there to actually build renewable energy capacity. There is no other plan, as a recent city study (that’s been buried, but which we unearthed and publicized) shows. We can build all the green buildings we want and fill the roadways with electric vehicles, but if we’re still using PG&E’s fossil fuels to power them, that doesn’t take us very far.  

Two, meeting our greenhouse gas reduction goals requires people to just sign up for CleanPowerSF, even if the plan isn’t perfect, because that customer base is what allows the city to issue revenue bonds to build these projects going forward. The more people there are in the program, the more clean power projects we can build for them, the less greenhouse gases we emit, period.

As the Examiner reported in its cover story today, the San Francisco Public Utilities Commission has found a way to drastically lower the cost of CleanPowerSF so that its monthly bills will now be on average about $6.50 more than PG&E’s. That relies on using some renewable energy credits, such as those created in the state’s cap-and-trade program, instead of purely the juice directly from renewable energy projects.

That change is now being criticized by some of the same people who criticized the plan for being too expensive, but it’s either one or the other, folks, because renewable energy simply costs more to purchase than the energy that PG&E buys from coal plants or generates at its taxpayer-subsidzed nuclear power plant.

But again, the point that the article gets to in its bottom half is what’s important here: you gotta get people to sign up for the program, then the city will be able to bond against that customer base and build its very own renewable energy projects, which the public will control throughout their lifetimes.

The alternative is abandoning our climate protection goals, or trusting that PG&E is going to benevolently act against its financial interests after scuttling CleanPowerSF and invest a bunch of money in renewable energy projects without jacking up our bills even higher than what the city is proposing — all evidence, history, and common sense to the contrary.

And that means believing that a company that spent a whopping $50 million unsuccessfully campaigning for an audacious ruse, when it should have been using that money on promised system repairs that would have prevented the deaths of eight people — a tragedy that regulators have blamed entirely on PG&E negligence — is going to selflessly act in the public interest.

So, yes, let’s all cover the details of CleanPowerSF, which has an important hearing next month, and make sure this program is as good as it can be. But let’s also not be distracted from the crucial central point: this is about empowering San Francisco to take care of its people and the planet.

PG&E can’t survive solar energy

Zelda Bronstein
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PG&E can’t survive solar energy

Years ago, in the middle of the boom in nuclear power plants, we used to say, only half in jest, the private utilities would never accept solar energy because you can’t put a meter on the sun. Turns out that’s pretty close to true.

A new report by The Energy Collective argues that Pacific Gas and Electric Company may be the first utility in the country to go under — because of competition with cheap solar in sunny California. Once solar becomes competitive with PG&E, more and more customers will install panels, forcing PG&E to raise rates on the remaining customers, who will then have even more reason to go solar. The groundwork is already there:

PG&E’s marginal prices cannot compete with solar. Large residential customers pay 31¢-35¢/kWh [kilowatt-hour], the same prices that cause the solar revolutions in Hawaii and Australia. Even worse, according to PG&E, “By 2022, PG&E’s top residential rate could reach 54 cents.” Residential customers represent about 40 percent of PG&E’s retail electric revenue. Commercial customers experience high rates, too. Unlike residential customers, who need a commercial third party to own the solar panels to take advantage of the accelerated depreciation, commercial customers can keep that advantage for themselves, making solar more financially attractive. Commercial customers represent about 46 percent of PG&E’s retail electric revenue.

If it happens soon, it will happen here:

“There is nowhere else in the U.S. with the same confluence of events,” says Short: “High and rising marginal prices, good sunshine, and inability to respond to changed competitive circumstances. If ever an electric utility was set up to fall to solar, it is PG&E.”

This is a great argument for promoting CleanPowerSF (and a good explanation for why PG&E wants to kill it), and shows the need for an eventual municipal takeover of the grid, because even with widespread solar, there’s going to be a need to power to move around between generators and users at different times of the day. And if PG&E is headed for collapse, the city ought to be able to get the infrastructure cheap.

 

Why the PG&E settlement is lame

Zelda Bronstein
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Why the PG&E settlement is lame

One of the factors that the state regulators took into account when they decided how much PG&E should be fined for the San Bruno blast was the company’s financial situation — that is, how much of a fine could the utility “safely absorb.” That’s the first sign that something screwy is going on here.

If I run a red light, the traffic court doesn’t ask how much of a fine I can “safely absorb.” A crook who embezzles money not only has to pay the money back, but suffer a financial penalty that can greately exceed what he or she can afford. A murderer doesn’t get to go before a judge and say, gee, two years in prison is all I can “safely absorb.” That’s not how it works.

PG&E is a giant company that has a guaranteed annual rate of return exceeding ten percent on everything it spends. It’s shareholders are large investment banks and stock funds. Its executives are very well paid. And gross negligence — that is, intential mismanagement at the level of criminal activity — on the part of the company led to the deaths of eight people and the destruction of an entire neighborhood.

The penalty ought to be MORE than the company can “safely absorb.” It ought to be enough to make shareholders wonder whether PG&E is a good investment. It ought to really, really hurt PG&E.

Instead, the CPUC staff is just telling the company to spend $2.25 billion doing what it should have been doing all along, and needs to do anyway: Fix the pipelines.

Sure, that money will come from profits, not from the ratepayers. But again, as the mayor of San Bruno pointed out on KQED’s Forum this morning, PG&E, as a regulated monopoly utility, has a guaranteed rate of return — and can borrow money at less than half that rate. The company reported revenues of $15 billion and profits of $830 million for 2012. PG&E seems to have plenty of money to fight CleanPowerSF and offer its own “green energy” program for less than the city will charge — and that’s guaranteed to be a money-loser, covered by some of those profits.

The CPUC ought to order the company to fix the pipes — then assess a fine high enough to wipe out all profits for, say, five years, which is how long it’s going to take San Bruno to fully repair the damage and recover from the explosion.

That would be a suitable “punishment.” Would it drive PG&E into bankruptcy? No — lots of companies operate with little or no profit margin these days. Let the killer utility cover its costs, do its job, pay its employees … and nothing more. The staff report is scathing; the penalty sounds stiff. But it’s not going to send enough of a message.

 

City-owned electricity generation works

Zelda Bronstein
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7
City-owned electricity generation works

I remember years ago a loser of a supervisor named Bill Maher tried to make a lame joke in opposition to a public-power measure. “If the city tries to run an electric system,” he said, “every time I throw a light switch my toilet would flush.”

Ha. Ha. Ha.

But it’s a common refrain: We can’t even run the Muni on time — how can we run an electricity system?

Which is why it’s worth noting that the San Francisco Public Utilities Commission and the Department of Public Works have managed, all on their own, to build successful solar generating facilities –– without contract scandals or any other apparent problems. The School District is happy; when they throw the light switch, the lights turn on — and the price of electricity is really, really low (far less than half what Pacific Gas and Electric Co. charges), so there’s more money for classroom instruction.

This is the future of green energy in San Francisco: Small-scale renewable projects, either owned by the city or financed by the city and placed on residential and commercial rooftops. It’s why CleanPowerSF is so important. PG&E is never going to support distributed generation; that kind of project makes PG&E irrelvant and undermines its business model. Once the city has enough generating facilities, it can start buying its own distribution system.

So yeah: Public power works. On a small scale, to be sure, but if the city can build one solar project, it can build more.

PG&E: Profits over safety

Zelda Bronstein
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6
PG&E: Profits over safety

You have to love the way the lawyer from TURN (The Utility Reform Network) put PG&E’s Vice President Jane Yura on the spot during hearings on the San Bruno pipeline disaster. There was lots of back and forth about the company’s ad campaign and whether PG&E had “lost its way,” which is what the Chron played up, but here’s the bigger issue, buried deep in the story:

 Long also asked Yura about PG&E’s reaction to the findings of a blue-ribbon panel that the utilities commission created to look into the disaster. The panel concluded that PG&E had been more concerned about profits than safety. “I would say I personally don’t know that we disagree or agree,” Yura said. “We have accepted it.”

I could go futher: PG&E was more concerned about executive compensation that safety, being as money that we earmarked for gas-line upgrades instead went to bonuses for the top people.

You wonder how long it’s going to take for people to realize that the needs of consumers, alternative energy, and safety are never going to be the priority for a private utility. Remember what happened when the state Legislature gave PG&E its way and deregulated electricity in CA? I do. I lived through the rolling blackouts, when Enron stole about $40 billion from California and the electricity grid almost collapsed.

That’s what happens when you worry more about profits (and pay) than public service.

Editor’s notes

Andrew Lam
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0

tredmond@sfbg.com

EDITOR’S NOTES The San Francisco Local Agency Formation Commission is holding a hearing Dec. 7 on the Mayor’s Renewable Energy Task Force report. That may not sound like the most exciting moment in any of our lives — but it’s actually worth talking about, a lot. Because the city has a goal of reaching 100 percent renewable energy in just eight more years, and the task force think it can be done — and the report, while it has its moments, completely screws up the central tenet of any long-term renewables policy.

Background: Former Mayor Gavin Newsom, who was prone to making sweeping press statements about things he never really intended to do, proclaimed in 2010 that San Francisco would be free of all fossil fuel electricity in 10 years. Then he went on his merry way to the Lieutenant Governor’s Office.

It fell to his successor, Ed Lee, to figure out how to make this happen, so Lee appointed a task force to study the situation. A lot of the members were environmental activists; some were experts in solar energy. One, Ontario Smith, worked for Pacific Gas and Electric Co., hung up five minutes into the first phone-conference meeting, and took his name off the final report.

If you don’t think this is serious business, you haven’t been looking out the window this past week. Scientists are now saying that it’s already too late to prevent the surface temperature of the Earth from rising three degrees, which means volatile and dangerous weather patterns are going to be part of the future anyway, and things might get way, way worse. San Francisco’s energy policy isn’t going to prevent China from burning coal, but it’s a step — and a 100 percent renewable portfolio would be a signal to other cities (and countries) that this is economically and technically feasible.

The report has 39 recommendations, many of them simple, practical, and laudable. It talks (correctly) about the importance of distributed generation — that is, small-scale solar and other renewable systems on houses and commercial buildings. It gives a nod to CleanPowerSF, the city’s community-choice aggregation system.

And it never once mentions public power.

In fact, from the tone of the report, the city plans to get to 100 percent renewable generation with the support and assistance of PG&E.

Let me give you a ring on the clue phone, folks: It isn’t going to happen.

Private utilities don’t have any interest in distributed generation, because it, quite literally, destroys their business model. If I have solar panels on my roof that meet my family’s energy demands, I have no need for PG&E anymore (except to use the company’s grid as a storage battery system, but soon we won’t need that, either). The only functional path to 100 percent renewables in a dense city is small-scale generation — and PG&E stands directly in the way.

I’ve always been a proponent of public ownership of essential services — water, power, streets and roads, firefighting and police operations, broadband, etc. But when it comes to electricity, this is more than a financial and resource-control issue. I see no path to a carbon-free (and nuclear-free) future, in San Francisco or anywhere else, as long as private companies make profits generating power in one place, shipping it along their private lines, and selling it someplace else.

Public power is not sufficient to create Newsom’s energy dream — but it’s absolutely necessary. And I hope the members of LAFCO make that point — and suggest that the task force update its report to reflect economic and political reality.

The missing element of the Renewable Energy study

Zelda Bronstein
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36
The missing element of the Renewable Energy study

Since San Francisco’s Local Agency Formation Commission is meeting Dec. 7 to talk about renewable energy, I went and read the 100-page report of the Mayor’s Task Force on Renewable Energy, which offers 39 different suggestions for meeting the goal of 100 renewable electricity in the city by 2020.

That’s a pretty ambitious goal. The guy who set it, Gavin Newsom, loved lofty, ambitious projects, particularly when he was never going to be the one to carry them out. So too here: Newsom announced the city’s goal in 2010, shortly before he left for the Lieutenant Governor’s Office. Ed Le convened the task force earlier this year, and the members, most of whom have legitimate qualifications for the job, got right to work.

The most important conclusion of the report: Yes, it’s financially and technologically feasible to generate all of San Francisco’s electricity from reneweable sources, and we can get their in a short eight years. One key element: More distributed generation — that is, the city needs to create financial and regulatory incentives for people to put solar panels on their roofs. In San Francisco, with sun much of the year (and small houses), a rooftop solar installation can pretty much power the average single-family home and can pick up a fair share of the load of the typical four-unit building.

But while the report gives a shout-out to CleanPowerSF, which will soon be offering 100 percent renewable energy service (for a slightly higher price), and talks about the need for the city to build its own renewable generation facilities, which have to be a part of the plan. But it has a glaring omission — it doesn’t once mention public power.

Why is that an omission? Because San Francisco is never getting to 100 percent renewables while Pacific Gas & Electric Co. still controls the grid.

Right now, with today’s technology, you can’t get close to 100 percent without a significant amount of distributed generation. Lots and lots of people have to generate their own power — at which point, they no longer need PG&E (except that, by law, the grid is the default storage battery, but that’s going to change soon, too). In simple terms, distributed generation puts private utilities out of business. So they won’t ever go for it, and will — quietly, behind the scenes — so everything possible to keep if from happening.

Likewise demand management, something the Renewable Energy Task Force discusses at length. San Francisco already gets about 40 percent of its electricity from the Hetch Hethcy hydro project; If the city could reduce its energy use by 20 percent, that’s 20 percent we don’t have to generate. And reducing use is way cheaper than building new generation facilities.

But why would PG&E want to sell less electricity? There are all sorts of state laws mandating efficiency, but no PG&E CEO is going to make that a big push; it costs the company money. A PG&E that sells 20 percent less electricity is a smaller PG&E, with smaller staff, smaller revenue, and smaller profits. 

That’s why the only way the key components of distributed generation and demand management are ever going to work is if San Francisco gets rid of PG&E and sets up a municipal system. Around the country, the munis are leading the way in renewables, because they have no stockholders to satisfy.

At least that ought to be part of the report, no?

 

Diablo Canyon: What else do we need to know?

Zelda Bronstein
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2
Diablo Canyon: What else do we need to know?

So PG&E wants to frighten, deafen, and kill a whole lot of marine mammals and fish by blasting sound waves at the Ocean floor — to discover exactly what? That there are, indeed, a lot of earthquake faults right near the Diablo Canyon nuke — and that a serious quake risks cracking the containment facility or toppling the whole thing into the sea, contaminaing much of the coast and poisoning a huge population area?

Don’t we already know that?

Don’t we already know that the plant was a terrible idea when it was built and is a worse one now?

It’s well established that a major strike-slip fault (the Hosgri) runs right offshore, and that another one (the Shoreline) is even closer. The whole Morro Bay area is riddled with faults. If one of them goes, it could cause others to go, and that could create a whole lot of shaking, quite possibly more than the aging plant could handle.

Nuclear power plants of Diablo’s vintage were designed to operate for maybe 40 years. PG&E wants to relicense it for another 25. Why not? The company paid about $7 billion to build the thing, and the longer it runs, the more money comes into the corporate coffers.

But one would think that, given what we now know about nuclear plant disasters, that the existence of such a precarious seismic zone so nearby would be ground to shut the thing down, or certainly to let its current license expire without renewal. I’m sure PG&E’s scientific study will show that there’s no danger to the public — that’s what every study the company has done on Diablo has shown — but really? Don’t we know better?

So-called DV group doing PG&E’s dirty work

Zelda Bronstein
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34
So-called DV group doing PG&E’s dirty work

Any pretense that the group called San Francisco Women for for Responsibility and an Accountable Supervisor is anything more than a downtown sham vanished with the arrival in District 5 mailboxes Nov. 3 of a mailer attacking Sup. Christina Olague for supporting public power.

The mailer uses pictures of Olague and Julian Davis — and that alone is a not-so-subtle attack on Olague. Davis has lost all credibility in the race, thanks to a string of allegations that he groped women.

It then goes after the two for “support [ing] a $20 million taxpayer giveaway to Big Oil.” The utterly misleading line is based on Olague’s vote to support Clean Power SF, a community choice aggregation program that has the support of public power advocates all over California.

Olague’s not supporting Shell Oil; she just realized, as did a supermajority of the board (including both left stalwarts David Campos and John Avalos and the far more conservative Scott Wiener) that the program makes sense for San Francisco and will lead in the long term to much greater energy self-reliance. The only ones putting out the Shell Oil line are PG&E and its house union, IBEW Local 1245.

Oh, and now a group that supposedly advocates for domestic violence victims.

This is a disgrace, an embarassment to the district and the city. Ron Conway and Thomas Coates are attacking Olague because they’re afraid she’ll vote against their development and landlord interests, not because they care about domestic violence.

This election matters, a lot. It’s clear where the big-money interests are; I hope D5 residents reject this attempt to buy the election.

 

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