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Months after Mayor Gavin Newsom announced his intention to get rid of San Francisco Public Utilities Commission general manager Susan Leal, his appointees on the SFPUC board finally made if official on Feb. 20.
But the reasons for the previously unexplained move that have finally started coming from Newsom and his surrogates have only added to the confusion and concern over why Leal got canned and whether Newsom has compromised this important agency’s work for political reasons.
Leal was terminated without cause and is thus entitled to the $400,000 severance package from the contract Newsom used to convince her to move from city treasurer to SFPUC chief in 2004. Nonetheless, in the days leading up to the Feb. 20 hearing, the Mayor’s Office made a series of unsubstantiated allegations, including the claim that Leal botched negotiations with JPower over combustion turbines in Potrero Hill, that she was too much of a political animal and not enough of a team player, and that she didn’t focus enough on Newsom’s environmental initiatives like tidal power.
At first, Leal tried to handle her termination gracefully: for example, she told the Guardian that tidal power "is really expensive, doesn’t generate much power, and is a difficult process to get approved, environmentally speaking."
But then Newsom told reporters that city officials had discussed terminating Leal for cause, so that the SFPUC could avoid paying her severance, but eventually decided against it to avoid potentially expensive litigation costs. At that point, with the implication that she had done something wrong, Leal’s gloves came off.
"I really wanted to go out on the high road," Leal told us after Newsom’s latest allegations hit. "It’s unfortunate that the Mayor had to resort to 11th hour innuendo to try and justify what he did."
Leal notes that city officials never undertook a performance evaluation of Leal or the SFPUC, which would usually form the basis for an expensive effort to remove a high-profile public official. So why did Newsom really dump Leal?
Was it her creation of public power projects that earned her the scorn of Pacific Gas and Electric Co.? Was it her environmental initiatives, ranging from a biofuels program to a ban on bottled water, which seemed to show up Newsom? Was it the fact that she was a strong and independent woman in a male-dominated political landscape?
One clue can be found during the agency’s Nov. 14, 2007, meeting — just before Newsom announced he wanted Leal gone — in which SFPUC president Dick Sklar ripped into Barbara Hale, the assistant general manager for power, after she made a presentation on the agency’s long-term energy goals.
Sklar objected to Hale’s presentation, claiming, "It implied adoption of principles stating that the SFPUC was going to be in the public power business and take over public power generation in the city, making statement of principles totally inconsistent with anything the commission had adopted."
Equally disturbing to staff was the abusive way Sklar delivered his message.
"It was very painful," Leal told us. "It got so bad I had to intervene. I’m not going to allow my staff to be yelled at."
At issue was the agency’s plan to underground gas lines in Bernal Heights and extend its transmission lines, which Leal described as "a gimme. We have the easement all up the peninsula."
Beyond her openly pro–public power stance, Leal speculated that her friendly working relationship with the Board of Supervisors, including board president Aaron Peskin and Sups. Bevan Dufty and Sophie Maxwell, tweaked the mayor, who at times has seemed to have a personal vendetta against his former board colleagues.
"Maybe the mayor thinks that I’m too close with them. But we did more than just talk about climate change. We actually addressed it," said Leal, who convened a world-renowned climate change conference in San Francisco last year — on the same day Newsom was confronted by his then campaign manager Alex Tourk about the affair Newsom had with Tourk’s wife, Newsom’s commission appointments secretary Ruby Rippey-Tourk.
"Why am I fighting back, not going quietly?" said Leal, whose removal is effective March 21. "Because this is too big not to. I actually really like this job and will be going in to work for the next 30 days."
Addressing allegations that she mismanaged the JPower negotiations, Leal explained that PUC staff drew up a term sheet with JPower and presented it to the commission’s governing body. And it was at that point, said Leal, "that Commissioner Sklar popped off," claiming that the contract’s terms were terrible and should be renegotiated.
In the end, all five commissioners approved a description of the contemplated transaction with JPower, including a brief description of Sklar’s preferred alternative, which, as it turned out, had problems of its own.
"So, there never was a deal," Leal told us. "JPower was pushing the city to pay more money up front because it knows PG&E will do everything it can to make the implementation of JPower’s contract tough, and the city was pushing to pay the money later and so reduce its own risks."
Today, the PUC continues to work with JPower on a contract that has taken years to formulate and that, Leal notes, will ultimately allow the city to own the plant.
"So, if we want to shut it down, or run it on alternative fuel, we’ll have control," Leal told us. "My goal was to make the PUC as viable and green as possible."
She believes Sklar didn’t turn against her leadership until she started to push things that infringed on PG&E’s monopoly. "Did PG&E get me fired? If I was PG&E, I’d want me fired," Leal said.
Maxwell is a strong advocate of the Newark-to–San Francisco transmission line Leal sought, not just because it would help reduce environmental burdens in Maxwell’s heavily polluted southeast district but also because it would give the entire City more ability to bring in cleaner power.
"We could do large-scale solar in the Central Valley, as well as wind and geothermal energy. It would allow us to hook renewable power into statewide grid," Leal said, noting that the link would also allow the city to import the electricity it generates at Hetch Hetchy without using PG&E’s expensive lines.
Leal noted that under her leadership, the PUC tripled the city’s municipal solar generation. "But we don’t control residential solar. PG&E does," she said, noting the city is lagging at getting solar panels on homes but leading at doing in on public buildings. "It’s too bad PG&E couldn’t have made it easier for people."
Maxwell says she’ll miss Leal.
"I don’t think we’re going to be better off without her," Maxwell told us. "Susan is independent, a straight shooter, a grown up woman trying to make a difference and listening to all sides. She knew we had to be involved regionally. She also understood we have to have relationships with both sides of the hall."
Convinced that PG&E had something to do with Leal’s demise, Maxwell also believes the stinky sewage digesters, which sit down the road from her own house, need to be removed, not retrofitted, as Sklar recently advocated.
"The digesters need to go," Maxwell told the Guardian. "No other place in the nation, to my knowledge, has digesters within 25 feet of people’s homes."
Noting that Controller Ed Harrington, whom Newsom has nominated as the next general manager of the PUC, has a financial background, Maxwell says the question of what to do with the digesters should not be about money.
"We need to do the best we can for people, in the most economic and financially prudent was possible, but people must come first, "Maxwell told us.
Maxwell said these recent power struggles at the PUC convinced her to join seven other Supervisors in placing a charter amendment on the June ballot that will make it easier for supervisors to block mayoral appointees to the agency and will also require that PUC nominees have appropriate awareness and skills.
With a proposed $4.3 billion program in the works to upgrade the aging Hetch Hetchy system, which provides water to 2.4 million Bay Area residents, will the newly nominated Harrington be able to address water conservation, efficiency and recycling, without causing further harm to the Tuolumne River — all while dealing with battles over public power and wastewater concerns?
Noting that he began his City Hall career as Assistant General Manager for Finance at the PUC, a position he held for seven years before becoming City Controller 17 years ago, Harrington told us, "This is not the perfect way to walk into a position. Susan and I are old friends, she’s been very gracious, and has made it known that I had nothing to do with her removal. And I’m trying to be gracious. There’s no need to criticize her."
Leal, who calls Harrington a friend, said she believes Harrington "will push a little bit, but how much independence he can take and preserve remains the question."
Neither Sklar nor representatives from the Mayor’s Office returned calls from the Guardian. But Sup. Chris Daly, who saved Sklar’s neck by leaving the board one vote short of the supermajority required to reject a PUC mayoral appointee, told us, "I don’t think Sklar is Newsom’s tool. He’s bigger than that. If I thought he was not independent from PG&E, I wouldn’t have voted from him."
In fact, he said perceived lack of PG&E independence was why he joined seven other supervisors in voting against reappointing Ryan Brooks, who Newsom then nominated to the Planning Commission on the same day Leal was fired.