PG&E Archives — Page 4 of 20 — San Francisco Bay Guardian Archive 1966

PG&E’s history of blowups

Zelda Bronstein

-

September 10, 2010

By Noah Arroyo

We don’t yet know if the San Bruno fire is a horrific accident or an equally horrific mistake. But Pacific Gas and Electric Company, which owns and operates the gas line that ruptured, has a history of incidents that look a lot like this one. Some of these incidents have caused power outages. Others have blown things up, or injured people.

The company also has a history taking money that ought to go to maintenance and diverting it into fat corporate profits.

In December of 2003, a cable fire at the Mission Substation of the Golden Gate Control Center caused a more than 100,000 people to lose power. The California Public Utilities Commission inspected the incident and found that PG&E suffered from general procedural laziness, and that “PG&E failed to follow three recommendations made in its 1996 Root Cause Analysis Report following [a] 1996 fire.”

At the time, San Francisco City Attorney Dennis Herrera noted: “The evidence is clear that PG&E knew about problems that endangered public safety and threatened to cost San Francisco businesses millions—and yet did nothing to fix them.”

Then, in August 2005, something exploded underground the intersection of Kearny and Post. A manhole cover shot into the air and the escaping fire severely burned a passer by. The event’s catalyst was a failed transformer, owned and operated by PG&E.

In June last year, a fire peeked and then roared from a manhole with enough force to resemble an explosion to onlookers. The electrical fire, at O’Farrell and Polk, was coming from a PG&E vault. The impact? 8,600 customers lost power. This, like Thursday’s fire at San Bruno, was a fire bigger and more resilient than what emergency responders at first assumed. At least in 2009, nobody died.

Another difference: In 2009, leading up to the explosion, PG&E didn’t know about the problem beforehand.

Why hadn’t PG&E replaced this natural gas pipe (the San Bruno fire’s origin) since its installation in 1948? Was the problem one of cost? If so, would replacing such a pipe cost more than the $46 million the company spent trying to push Proposition 16 in June’s election?

Or could this be a replay of the Rough and Ready fire of 1994?

That year, an inferno raged through the small Nevada County town, destroying a dozen homes and causing $2 million in damage. The cause of the fire? Tree limbs that PG&E was supposed to trim brushing against the company’s power lines.

The local district attorney sued, and during the trial, evidence came to light that PG&E had taken $80 million from ratepayers — money that was supposed to be used for tree trimming — and diverted it to executive salaries and to pad the bottom line.

The company was found guilty of criminal negligence and fined $2 million.

So if PG&E in fact failed to maintain its facilities, at great cost to the public, it wouldn’t be the first time.

No smart meters in SF

David Talbot

-

September 7, 2010

0

EDITORIAL Smart meters are a dumb idea. That’s what The Utility Reform Network says, noting that the high tech devices are expensive (California utilities, including Pacific Gas and Electric Co., will be charging consumers $5.4 billion to install the meters), don’t save energy or money, and can lead to privacy risks. PG&E bills have soared unexpectedly in places where the meters have been installed in the past year, forcing an investigation by the California Public Utilities Commission, which concluded on Sept. 2 that the meters are okay, but PG&E’s customer service isn’t. Still, TURN and other experts say the report is inconclusive, and state Sen. Dean Florez (D-Shafter) wants legislative hearings before any more meters are installed.

San Francisco hasn’t faced the smart meter problem yet since the utility hasn’t been installing them here — but that will start soon enough, now that the CPUC (never known as a harsh critic of PG&E) has given the green light. TURN is urging customers to boycott the meters, so the San Francisco supervisors should tell PG&E that the city doesn’t want this flawed technology.

Smart meters are supposed to make it easier to save energy. The idea is that the devices will not only track how much electricity a customer is using, but give that customer the ability to monitor usage at different points in the day and cut back during peak periods.

But to take advantage of the gadgets, a customer would have to buy a bunch of expensive gear on the side — communications devices, thermostats, computer chips for energy-intensive appliances, etc. PG&E isn’t going to pay for that stuff.

Meanwhile, the "smart" part of the meter sends information about your energy usage through a wireless signal. Privacy advocates worry about that (as do people concerned with having yet another device in the house emitting low-frequency radiation).

And while PG&E denies that there are any problems with the accuracy of the meters, huge numbers of people in areas where they’ve been installed have reported huge — and otherwise inexplicable — hikes in their monthly bills.

So for most residents and small businesses, smart meters are just going to be a pain in the ass — a questionably accurate, potentially dangerous, and otherwise worthless device that PG&E is making money from by installing.

TURN has advice on its website (turn.org) for people who want to boycott the meters: to tell PG&E to leave the existing meters in place. If you put a sign on your meter saying you don’t want it changed — and if you tell the person coming to replace it that you don’t want a smart meter — you may stave off the new product for a while.

But San Francisco is in the process of creating a community choice aggregation (CCA) system that will put the city for the first time in the business of delivering retail electric power. That ought to give the city some authority over how local meters are going to operate — and at the very least, the city should tell PG&E to back off until CCA is in place and the city can do its own independent study.

The supervisors should ask City Attorney Dennis Herrera to investigate what authority the city has to block PG&E from installing smart meters, and to look at how the new CCA might avoid including the cost of the devices in the rates local customers pay for power. At the very least, the board can endorse the boycott and urge the CPUC to keep smart meters out of the city. Candidates for local office should oppose the smart meters. And if PG&E wants to force the issue, city officials just need to remind the utility that its local monopoly is illegal, that San Francisco has a federal mandate for public power, and that just three months ago, 68 percent of the city’s voters said they wanted to preserve a public power option.

PG&E CEO paints a rosy picture for CPUC

Sasha Cuttler

-

August 13, 2010

2

Pacific Gas & Electric CEO Peter Darbee’s address to the California Public Utilities Commission yesterday focused on his company’s national reputation as a corporate advocate for addressing climate change, largely ignoring PG&E’s $46 million waste of ratepayer money supporting June’s failed Proposition 16, which was designed to expand the utility’s monopoly in California and thwart local renewable power projects.

CPUC President Michael Peevey warmly introduced Darbee to the crowd, calling the CEO an upfront thought leader on climate change — a very different message from the same man who harshly criticized PG&E’s spearheading of Proposition 16 before its defeat in June.

“There is something fundamentally wrong with the idea that one company, spending $35 million can, by majority vote of the electorate, seek and obtain a two-thirds vote protection in our State Constitution,” Peevey wrote in an opinion published in the San Jose Mercury News in May. “The purpose of the Constitution is to protect our sacred rights as citizens. It is not to protect the narrow private interests of a particular utility company.”

Darbee’s only comment on Proposition 16 came near the end of his speech, when he attempted to justify PG&E’s spending on failed campaign that some have said should have cost Darbee his job. Referring to the company’s regular opposition to public power campaigns, he said, “$45 million versus $15 million a year – financially it made sense.” But it wasn’t news to anyone that PG&E had an economic interest in essentially killing public power start-ups.

Instead, the CEO chose to focus PG&E efforts in Washington D.C. to nationally address climate change and his company’s support of AB 32, a 2006 law that requires California to reduce its greenhouse gas emissions to 1990 levels by 2020, and PG&E’s opposition to Proposition 23, a November ballot initiative that would freeze AB 32 until California’s unemployment levels drop below 5.5 percent and stay there for at least one year – a rare occurrence in modern economies.

Local environmental activists call PG&E’s purported concern over climate change greenwashing and hypocrisy. “That’s complete crap,” San Francisco Green Party Sustainability Chair Eric Brooks told the Guardian. “For them to claim that they’re a green company is a joke. They do the same thing that tobacco companies used to do; they spread a little money around supporting renewables that aren’t even part of their energy portfolio.”

Brooks said that AB 32’s mandates were flexible enough not to really harm PG&E’s profit margins, so the company can oppose Proposition 23 without impacting its bottom line. Steven Maviglio, spokesman for No on 23 — Stop the Dirty Energy Proposition told the Guardian PG&E had reported no contributions opposing Proposition 23, a far cry from the more than $46 million the company spent championing Proposition 16 in June.

“Thing about Prop. 23 is [that] AB 32 doesn’t really box them in,” Brooks told us. “If we switch to localized, renewable energy, that puts PG&E out of business. Prop 16 would have been much more effective at eliminating green energy in California than anything else like Prop 23.”

Yet the main controversy aired at the CPUC meeting wasn’t about greenwashing or Prop. 16, but smart meters. About a dozen protesters gathered at the steps of the California Public Utilities Commission before Darbee started speaking. The group is concerned about PG&E’s construction of a “smart grid” of wirelessly transmitting electronic meters critics say can cause cancer due to electromagnetic radiation as well as immediate discomfort for those who are electrically sensitive.

Joshua Hart of Scotts Valley Neighbors Against Smart Meters interrupted Darbee near the beginning of his speech. “Mr. Darbee, your smart meter program is a false solution to climate change,” Hart shouted as he presented Darbee with a “dumb meter,” a cardboard box with photos of smart meters pasted to it in which the word “smart” was replaced with the word “dumb,” Hart told the Guardian.

Hart was escorted out by a CHP officer, but he was not arrested or cited. Darbee finished his opening remarks before addressing first concerns about false billing information that had been transmitted by a small percentage of the more than 6 million smart meters already installed in California, then radiation generated by the devices.

Darbee said residents of Bakersfield were confused about rate tiers in July 2009, which had more days with temperatures exceeding 100 degrees than the year before, but he insisted the meters were not to blame for high energy bills.

However, PG&E has acknowledged that some of its new smart meters malfunctioned and were broadcasting energy usage reports that resulted in higher bills for consumers. But the company insists that less than 1 percent of installed smart meters have malfunctioned.

San Francisco City Attorney Dennis Herrera petitioned the CPUC in June to immediately halt installation of smart meters until state regulators conclude an investigation into whether the meters are accurate. The CPUC has not stopped PG&E from installing the devices.

“This is Peevey’s legacy,” Hart told the Guardian referring to CPUC President Michael Peevey, “a ‘smart grid’ in California.”

Darbee next addressed the electromagnetic radiation generated by the smart meters’ wireless transmissions by describing a comparison PG&E did between the new meters and cell phones.

“Let’s be conservative,” he told the crowd. “Let’s assume the smart meter is 10 feet away, and there are no walls between you and the smart meter, which of course there are. And let’s assume the person is only on the cell phone 10 minutes per day … If you live in a home with a smart meter, you have to live in that home for 13,000 years before it compares to your use of a cell phone for one year.”

But Hart rejected PG&E’s study and said he didn’t believe the Federal Communication Commission’s limits on electromagnetic radiation were actually safe. “The FCC regulations on EMF [electromagnetic field] safety were written by the telecommunications industry,” Hart told the Guardian. “If the smart meters were being installed in Russia, they would be illegal.”

Sebastopol resident Janhavi Hubert attended the protest and speech as a representative of people who are “electronically sensitive.” “When they put a smart meter on my neighbor’s house 25 feet away, I didn’t expect to feel anything,” Hubert told the Guardian. “I had heart palpitations, which I’ve never had before, heart arrhythmia, and headaches, and when I go away from the house, it goes away.”

Rebecca Bowe contributed to this report.

SFBG Radio: A glorious future without PG&E

David Talbot

-

August 13, 2010

0

SFBG Radio: A glorious future without PG&E

In this week’s episode, Johnny and Johnny talk asinine budget impasse, Americans suckered into voting against their interests and a glorious future without PG&E.

VenomClassWarScrewPGE by jangel

Alerts

David Talbot

-

August 3, 2010

0

alert@sfbg.com

THURSDAY, AUG. 5

Power on

Gather with the public power supporters and advocates who brought us the No on 16 campaign, which blocked PG&E’s attempt to solidify its monopoly. Attend a workshop that will analyze the campaign and election victory, discuss current challenges to public power, and find common ground for the future push for true power to the people. The workshop is followed by a festive buffet, awards ceremony, music, and more.

1 p.m. workshop, 5:30 p.m. party; free

The Merchants Exchange Building

465 California, SF

www.celebrateno16.org

Zero waste lunches

Learn about the impact that your daily lunches have on the environment and become more informed about the amount of waste created by takeout food and prepackaged lunches. Find out how you can change your habits, including what to buy at farmers markets and how to pack your food to create zero- waste lunches.

Noon, free

Green Zebra Environmental Action Center

Suite 9, 50 Post, SF

www.thegreenzebra.org

FRIDAY, AUG. 6

Worker Cooperative Conference

The public is invited to attend this national conference on the increasingly celebrated concept of worker cooperatives (think Cheeseboard and Arizmendi). Workshops and speakers will look at worker cooperatives as a remedy for larger social and economic problems such as job loss and environmental damage and will present innovative approaches to common challenges cooperative businesses face in accountability and management, financing, governance, vision, and growth.

Fri. 9 a.m.–midnight, Sat. 9 a.m.–11 p.m.;

Sun. 9 a.m.–5 p.m.; $90–$300

Clark Kerr Conference Center

UC Berkeley

2601 Warring, Berk.

www.usworker.coop

SATURDAY, AUG. 7

"Choking on Oil"

Get together with others who are frustrated by the BP oil spill catastrophe and learn about the surrounding issues at this networking performance featuring poets, artists, special guest speakers, and a silent auction to help raise funds for charities. Hosted by Out of Our poetry magazine.

7 p.m., free

Viracocha

998 Valencia, SF

www.outofour.com

Lantern ceremony

Commemorate the 65th anniversary of the atomic bombing of Hiroshima at this Japanese-style peace event. Participants are invited to decorate candlelight peace lanterns that will be floated at sunset during a ceremony that includes reading a message sent by the mayor of Hiroshima and Japanese bamboo flute music. Materials provided.

6:30 p.m., free

Berkeley Aquatic Park

Addison at Bolivar, Berk.

(510) 595-4626

TUESDAY, AUG. 10

Chew on this

Examine the journey our food takes before it reaches our plates, in what ways the supply chains are broken, and what we can do to fix it. Hear about food justice best practices from local professionals, experts, and activists using a labor perspective. Presented by Pursue: Action for a Just World.

6:30 p.m., $10

Local Mission Eatery

3111 24th St., SF

www.fruitsofourlabor.eventbrite.com

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 437-3658; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

Deal time

Jesse Hawthorne Ficks

-

July 20, 2010

1

sarah@sfbg.com

Lennar Corp.’s massive redevelopment plan for Candlestick Point-Hunters Point cleared a critical hurdle July 14 when the Board of Supervisors voted 8-3 to affirm the Planning Commission’s certification of the project’s final environmental impact report, with Sups. John Avalos, Chris Daly, and Eric Mar opposed

Board President David Chiu called the vote "a milestone." Termed-out Sup. Sophie Maxwell, whose District 10 includes Candlestick Point and the former Hunters Point Naval Shipyard, saw the vote as evidence that city leaders support the ambitious plan. Yet many political observers saw the vote as proof that Lennar and its Labor Council allies have succeeded in lobbying supervisors not to support opponents of the project.

"I’m concentrating on pushing this over the finish line," Maxwell said at the hearing in the wake of the vote, which came in the wee hours of July 14 after a 10-hour hearing. Supervisors can still amend Lennar’s development plan during a July 27 hearing and project opponents are hoping for significant changes.

Mar said he wants to focus on guaranteeing that the city has the authority to hold Lennar responsible for its promises. "I want to make sure that we have the strongest enforcement we can," he said.

Lennar’s plan continues to face stiff opposition from the Sierra Club, the Golden Gate Audubon Society, the California Native Plant Society, San Francisco Tomorrow, POWER (People Organized To Win Employment Rights) and CARE (Californians for Renewable Energy).

Representatives for these groups, whose appeals of the EIR certification were denied by the board, say they are now weighing their options. Those include taking legal action within 30 days of the board’s second reading of and final action on the developer’s final redevelopment plan, which will be Aug. 3 at the earliest.

Supervisors are expected to introduce a slew of amendments July 27, when they consider the details of the proposal and its impacts on the economically depressed and environmentally polluted.

Michael Cohen, Mayor Gavin Newsom’s top economic advisor, admitted July 19 that all these various demands will likely delay project construction. "But 702 acres of waterfront land in San Francisco is an irreplaceable asset," Cohen reportedly told the San Francisco Chronicle. "It’s not a question of if — but when — it gets developed."

Chiu already has introduced five amendments to the plan in an effort to alleviate concerns about shipyard toxins, Lennar’s limited financial liability, a proposed bridge over Yosemite Slough, and the possibility that local residents will need more access to healthcare and training if they are to truly benefit from the development plan.

Sup. Ross Mirkarimi told the Guardian that he expects the board will require liquidated damages to ensure the city has some redress if the developer fails to deliver on a historic community benefits agreement that labor groups signed when Lennar was trying to shore up community support for Proposition G, the conceptual project plan voters approved in June 2008.

Mirkarimi said the board would also seek to increase workforce development benefits. "Thirty percent of the target workforce population are ex offenders. So while they might get training, currently they won’t get jobs other than construction," Mirkarimi observed.

He supports the health care access amendment and the public power amendment Chiu introduced July 21, pointing to Mirkarimi’s previous ordinance laying the groundwork for public power in the area. "This ordinance established that where feasible, the City shall be the electricity provider for new City developments, including military bases and development projects," Mirkarimi said. "PG&E was ripped when we pushed that through."

But Sierra Club activist Arthur Feinstein isn’t sure if additional amendments will help, given intense lobbying by city officials and a developer intent on winning project approvals this summer before a new board and mayor are elected this fall.

"Chiu’s amendments gave us what we asked for over Parcel E-2" Feinstein said, referring to a severely contaminated section of the shipyard for which Chiu wants an amendment calling for a board hearing on whether it’s clean enough to be accepted by the city and developed on.

But Feinstein is less than happy with Chiu’s Yosemite Slough amendment, which would limit a proposed bridge over it to a width of 41 feet and only allow bike, pedestrian, and transit use unless the 49ers elect to build a new stadium on the shipyard. In that case, the project would include a wider bridge to accommodate game-day traffic.

"The average lane size is 14 feet, so that’s a three-lane bridge. So it’s still pretty big. And it would end up filling almost an acre of the bay," Feinstein said.

Feinstein thanked Mirkarimi and Campos for asking questions that showed that the argument for the bridge has not been made. "But it’s disappointing that a progressive Board would be willing to fill the Bay for no reason," Feinstein said.

He concurred with the testimony of Louisiana-based environmental scientist Wilma Subra and environmental and human rights activist Monique Harden, who challenged the wisdom of the Navy digging out toxins while the developer installs infrastructure at the same site.

Subra said contamination is often found at Superfund sites after they have been declared clean when contractors to later dig into capped sites and expose workers and the community to contamination. Harden said the plan to begin construction on some shipyard parcels while the Navy removes radiological-contamination from shipyard sewers is "like a person jumping up and down on a bed that another person is trying to make."

But Cohen, who has aggressively pushed the project on Newsom’s behalf, countered that there is no scientific evidence to support such concerns. "It’s a very common situation," Cohen said. "It’s the basis for shipyard artists and the police being on the site for many years … It’s safe based on an extraordinary amount of data."

But Feinstein pointed to his experience working for the Golden Gate Audubon Society at the former Alameda Naval Station. He recalls how a remediation study was completed, but then an oil spill occurred at the site, which had been designated as a wildlife refuge.

"The military didn’t know about everything that happened and was stored on site, and it’s easy to miss a hot spot," he said. "And who’ll be monitoring when all these homes are built with deeds that restrict the renters and owners from digging in their backyards?"

Feinstein said he’s concerned that only Campos seemed to be asking questions and making specific requests for information around the proposed project’s financing

"Lennar is paying city staff and consultants and promising labor huge numbers of jobs. When you are throwing that much money around, it’s hard for people to resist — and the city has been co-opted," Feinstein said. "And how much analysis and resistance can you expect from city commissions when the Mayor’s Office is the driving force behind the project? So we don’t have a stringent review. The weakness of the strategy of ignoring our bridge concerns is that when we sue, we may raise a whole bunch of issues."

Arc Ecology director Saul Bloom says Chiu’s bridge proposal "screwed up the dialogue. We were close to a deal," Bloom claims. "But while that amendment allowed one board member to showboat, it prevented the problem from being solved."

Bloom is concerned that under the financing deal, the project won’t make any money for at least 15 years and will be vulnerable to penalties and bumps in the market — an equation that could lead the developer to build only market rate housing at the site.

"It’s a problematic analysis at best," he said.

"The bigger the development, the more it benefits people who have the capacity to address it — and that’s not the community," Bloom said. "So there’ll be more discussion of the bridge, and that’s where the horse-trading is going to be."

He also said the bridge has now taken on a symbolic value. "The thing about the bridge is that it’s not actually about the bridge any more," Bloom added. "It’s about Lennar telling people, ‘You will support us.’ If they get the bridge, it will give them free rein, an unencumbered capacity to do as they see fit. They are willing to make deals, but they have to have the bridge because it defeats the people who have been the most credible and visible — and then they have no opposition."

Mirkarimi wants state franchise fee change

Zelda Bronstein

-

June 28, 2010

1

Mirkarimi wants state franchise fee change

Sup. Ross Mirkarimi has introduced a resolution calling on the state Legislature to reform the law that allows Pacific Gas and Electric Company to pay a miniscule fee, in perpetuity, for the right to run its lines, poles and cables on and below the city streets.

The franchise fee was signed in 1939, and requires PG&E to pay just one half of one percent of its revenue to the city. Berkeley charges ten times that much. But since the deal has no expiration date, the supervisors can’t renegotiate it.

If San Francisco raised its fee to 5 percent for both electricity and gas the city would pick up an extra $50 million a year.

Both state Sen. Mark Leno and Assemblymember Tom Ammiano have told us they’re looking at ways the state Legislature could end perpetual franchise deals.

Lights out? I think not

Zelda Bronstein

-

June 23, 2010

0

The big bold headline on the front page of the Ex: Lights out for power project. The article actually isn’t that bad, although it’s framed as a setback for public power.

But that spin is completely wrong. A huge victory for public power — the defeat of Prop. 16 — gives the city a little breathing room to get a better contract. That’s all that’s happening.

Sup. Ross Mirkarimi was pushing hard to get the San Francisco Public Utilities Commission to sign at least a tentative deal to get the city’s community choice aggregation program locked in before June 8, just in case Prop. 16 passed. The artificial deadline set by Pacific Gas and Electric Company was, frankly, forcing the city to get the best deal possible in a short time frame. And even an imperfect deal would have been preferable to losing out on CCA altogether.

But now that threat is gone, and the city has a little breathing room to negotiate — and to nobody’s suprise, the SFPUC, with Mirkarimi’s full support, is taking advantage of it. CCA isn’t dead; it’s not “lights out.” It’s not even that far off schedule. If the PUC doesn’t drag its feet, the program can be up and running early next year.

So there’s no cause for alarm or panic. The city will probably get a better deal now, anyway.

How SF can get $50 million a year from PG&E

David Talbot

-

June 22, 2010

1

How SF can get $50 million a year from PG&E

EDITORIAL Sup. John Avalos, who chairs the Budget Committee, is looking for ways to bring another $100 million into the city’s coffers this year. There’s a hotel tax initiative headed for the fall ballot. He’s talking about an increase in the real-estate transfer tax for high-end properties. And he and his colleagues are looking into a tax on commercial rents.

Those are all valid ideas. But there’s another way the city can bring in as much as $50 million more a year — without raising anyone’s taxes. It just involves increasing the franchise fee Pacific Gas and Electric Co. pays to the city.

PG&E uses the city’s streets and rights-of-way to run its gas lines and electricity cables; the company doesn’t pay rent for that space. Instead, it pays an annual franchise fee to the city, a percentage of its gross sales. Other utilities pay, too — Comcast, for example, pays 5 percent of its gross to San Francisco every year for its cable-TV franchise.
PG&E pays 0.05 percent for electricity sales, and 1 percent for natural gas.

That deal was reached in 1939. The Board of Supervisors back then gave PG&E the lowest franchise fee in California, a pittance, a fraction of what other cities and counties charge — and the contract has no expiration date. It’s a perpetual deal, something highly unusual.

Sup. Ross Mirkarimi wants to open up the 72-year-old contract for renegotiation and raise the fee significantly. It seems like a perfectly reasonable idea — Berkeley charges PG&E 5 percent for electricity. San Diego charges 3.5 percent. If the city is desperately scrambling for money to close the budget gap, why are we leaving so many millions on the table?

The numbers are big. In 2008, according to the Controller’s Office, PG&E paid San Francisco $3.5 million for electricity sales and $3.16 million for gas. If the city raised both fees to the level that cable TV providers pay, the general fund would pick up another $50 million.

It seems crazy that a franchise deal signed seven decades ago, by a board that was in PG&E’s pocket, should tie the hands of elected officials today. Most legislative bodies have rules barring any laws that would tie the hands of future legislators forever.

It’s particularly ironic for this to happen in the only city in the United States that is mandated by federal law (the Raker Act) to run a public power system.

But according to City Attorney Dennis Herrera, raising the fee would be very difficult; California law allows perpetual utility franchises. If Herrera is right (and no city attorney has ever been willing to challenge PG&E on this), then the state Legislature needs to act.

One idea from Mirkarimi’s office: simply mandate that all perpetual utility franchises increase every year by the cost of living index, up to a maximum of, say, 5 percent. If all the years since 1939 were counted, the city would be at the max today.

An even simpler option: the state could outlaw perpetual franchise deals — something that should have been done years ago — and mandate that all existing deals expire on, say, Jan. 1, 2011. That would give San Francisco six months to negotiate a new deal with PG&E, and the money from that deal would save a lot of city services.

Both Assembly Member Tom Ammiano and state Sen. Mark Leno have expressed interest in a bill that would open up San Francisco’s franchise fee, and both told us that they’re looking into it. Leno already has a bill barring PG&E from using ratepayer money on political campaigns; potentially, a franchise fee amendment could be added to it. The deadline for introducing bills for this session has already passed, so it would be a little tricky to find a way to change state law in the next few months. But it’s worth a try: there’s never been a time when PG&E was less popular in Sacramento. The company violated its own agreement with the Legislature, promising to support the law authorizing local community choice aggregation systems then turned around and spent nearly $50 million to overturn it.

Leno and Ammiano should pursue a bill as soon as possible to get rid of one of the great scandals in city history, a sweetheart deal in 1939 that has saved PG&E billions and cost the city dearly.

How SF can get $50 million a year from PG&E

David Talbot

-

June 22, 2010

1

EDITORIAL Sup. John Avalos, who chairs the Budget Committee, is looking for ways to bring another $100 million into the city’s coffers this year. There’s a hotel tax initiative headed for the fall ballot. He’s talking about an increase in the real-estate transfer tax for high-end properties. And he and his colleagues are looking into a tax on commercial rents.

Those are all valid ideas. But there’s another way the city can bring in as much as $50 million more a year — without raising anyone’s taxes. It just involves increasing the franchise fee Pacific Gas and Electric Co. pays to the city.

PG&E uses the city’s streets and rights-of-way to run its gas lines and electricity cables; the company doesn’t pay rent for that space. Instead, it pays an annual franchise fee to the city, a percentage of its gross sales. Other utilities pay, too — Comcast, for example, pays 5 percent of its gross to San Francisco every year for its cable-TV franchise.

PG&E pays 0.05 percent for electricity sales, and 1 percent for natural gas.

That deal was reached in 1939. The Board of Supervisors back then gave PG&E the lowest franchise fee in California, a pittance, a fraction of what other cities and counties charge — and the contract has no expiration date. It’s a perpetual deal, something highly unusual.

Sup. Ross Mirkarimi wants to open up the 72-year-old contract for renegotiation and raise the fee significantly. It seems like a perfectly reasonable idea — Berkeley charges PG&E 5 percent for electricity. San Diego charges 3.5 percent. If the city is desperately scrambling for money to close the budget gap, why are we leaving so many millions on the table?

The numbers are big. In 2008, according to the Controller’s Office, PG&E paid San Francisco $3.5 million for electricity sales and $3.16 million for gas. If the city raised both fees to the level that cable TV providers pay, the general fund would pick up another $50 million.

It seems crazy that a franchise deal signed seven decades ago, by a board that was in PG&E’s pocket, should tie the hands of elected officials today. Most legislative bodies have rules barring any laws that would tie the hands of future legislators forever.

It’s particularly ironic for this to happen in the only city in the United States that is mandated by federal law (the Raker Act) to run a public power system.
But according to City Attorney Dennis Herrera, raising the fee would be very difficult; California law allows perpetual utility franchises. If Herrera is right (and no city attorney has ever been willing to challenge PG&E on this), then the state Legislature needs to act.

One idea from Mirkarimi’s office: simply mandate that all perpetual utility franchises increase every year by the cost of living index, up to a maximum of, say, 5 percent. If all the years since 1939 were counted, the city would be at the max today.

An even simpler option: the state could outlaw perpetual franchise deals — something that should have been done years ago — and mandate that all existing deals expire on, say, Jan. 1, 2011. That would give San Francisco six months to negotiate a new deal with PG&E, and the money from that deal would save a lot of city services.

Both Assembly Member Tom Ammiano and state Sen. Mark Leno have expressed interest in a bill that would open up San Francisco’s franchise fee, and both told us that they’re looking into it. Leno already has a bill barring PG&E from using ratepayer money on political campaigns; potentially, a franchise fee amendment could be added to it. The deadline for introducing bills for this session has already passed, so it would be a little tricky to find a way to change state law in the next few months. But it’s worth a try: there’s never been a time when PG&E was less popular in Sacramento. The company violated its own agreement with the Legislature, promising to support the law authorizing local community choice aggregation systems then turned around and spent nearly $50 million to overturn it.

Leno and Ammiano should pursue a bill as soon as possible to get rid of one of the great scandals in city history, a sweetheart deal in 1939 that has saved PG&E billions and cost the city dearly.

Mirkarimi to PG&E: We want our $46 million back

Sasha Cuttler And Mary Magee

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June 16, 2010

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Speaking at the June 15 Board of Supervisors meeting, Sup. Ross Mirkarimi introduced a non-binding resolution calling on Pacific Gas & Electric Co. to refund ratepayers for the $46 million it spent on a failed bid to pass Proposition 16, a ballot initiative dubbed the “Taxpayer’s Right to Vote Act” that would have impeded the creation of municipal electricity programs.

While PG&E has publicly stated that its campaign costs were covered by “shareholder funds,” the sole source of income for the parent corporation is money that the utility makes selling electricity, so the $46 million originated in ratepayers’ pockets.

At the meeting, Mirkarimi displayed a map of PG&E’s service territory beside a map of the California counties that rejected Prop 16, highlighting the striking similarity. In San Francisco, Prop 16 was rejected by more than two-thirds of the vote.

Mirkarimi’s resolution included several other improbable requests. He extended an invitation to PG&E CEO Peter Darbee to attend a Board of Supervisors meeting, to “discuss what it really and truly means to peacefully coexist,” he explained. “We look forward to Mr. Darbee coming to meet with us.”

The third aspect of the resolution deals with SFERS, San Francisco’s employment retirement system, which owns 106,348 shares of PG&E common stock valued at $4.38 million on the day the information was accessed. Institutional investors such as CalPERS and SFERS account for more than a 60 percent share of ownership of PG&E, according to the resolution.

Mirkarimi is calling on PG&E to refund SFERS, and “urges CALPERS and SFERS to consider divesting its holdings in PG&E stock” if the company refuses.

The resolution also asks the California Public Utilities Commission to carefully scrutinize PG&E’s requested rate hike.

PG&E didn’t return our requests for comment the last 10 times we called, but we tried again — even though the result is predictable.

Editorial: PG&E’s greed backfires

David Talbot

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June 15, 2010

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The defeat of Prop. 16 showed that unlimited corporate spending on a ballot initiative doesn’t guarantee victory.

EDITORIAL The single most important number to come out of San Francisco on election night was this: 67.49 percent. That’s how many people in this city voted against Pacific Gas and Electric Co.’s monopoly measure, Proposition 16. It’s a statistic that ought to be posted somewhere on a wall at City Hall to remind everyone in local government that the voters sided overwhelmingly against PG&E and in favor of a public option for local electricity.

It’s a landmark victory. On the state level, the defeat of Prop. 16 showed that unlimited corporate spending on a ballot initiative doesn’t guarantee victory, that an underfunded coalition can defeat a giant utility — and that a majority of those in PG&E’s own service area are unhappy with their electricity provider. Public power activists all over the state should take this as a signal that PG&E, and its once-formidable political clout, are on the wane.

In San Francisco — the only city in the nation with a legal mandate for public power — the vote was the most lopsided of any California county. It was the strongest local mandate for public power since the passage of the Raker Act in 1913.

That should be a huge boost for the city’s community choice aggregation (CCA) program. Sup. Ross Mirkarimi, who has been leading the fight for CCA, was pushing hard to get a contract signed before the June 8 vote; like a lot of observers, he feared that PG&E’s vast war chest would overwhelm the opposition. But now that Prop. 16 is dead — and nothing like it will be back in the near future, if at all — the city has a bit of a breather.

That doesn’t mean all work on the contract should slow down. The San Francisco PUC has been mucking around with this deal for more than a year, and needs to bring it to a close. And the city needs to start preparing to answer PG&E’s propaganda campaign with a concerted effort — from the mayor’s office on down — to remind San Franciscans that CCA power will be greener, safer, and in the long run, cheaper than the energy we’re now forced to buy from PG&E.

Any San Francisco politician who stands with PG&E and opposes CCA will do so at his or her peril.

And while San Francisco is moving to implement a modest public power program, state Sen. Mark Leno is moving in Sacramento to limit PG&E’s ability to try another Prop. 16 move — or to spend tens of millions of dollars trying to block local power initiatives. Leno has introduced a bill that would limit the utility’s ability to use ratepayer money on political or public relations campaigns.

The measure doesn’t have a number yet, but the language is brilliant. It directs the California Public Utilities Commission to disallow any political spending that PG&E tries to add into its regulated rates. And since the company has no source of income other that the money it gets from ratepayers, the impact would be to deny PG&E the ability to spend money working against the interests of ratepayers and the public.

"Over the past 10 years, PG&E has probably spent $150 million on political campaigns — and that’s money that came from the ratepayers," Leno said. "This bill is to protect ratepayers."

PG&E will howl about its First Amendment rights — and, indeed, the Supreme Court has of late given corporations who want to influence political campaigns and legislative issues a good bit of leeway. But the fact remains that PG&E is a regulated utility in California, and the state has every right to determine how much the company can charge its customers and to limit how that money is used.

Leno’s bill, of course, could radically change local politics. If PG&E couldn’t spend millions to defeat public power measures, the city would have far more options — and activists should be thinking about how a future campaign to take over the company’s infrastructure might work.

The Board of Supervisors should pass a resolution endorsing Leno’s bill, and the coalition that worked to defeat Prop. 16 should be working to get other cities and counties around the state to sign on.

PG&E’s greed in putting Prop. 16 on the ballot is starting to backfire — and it can’t happen too soon.

PG&E’s greed backfires

David Talbot

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June 15, 2010

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