No more stalling on CCA

Pub date April 27, 2010

EDITORIAL There’s nothing wrong with city officials taking tough stands in negotiations with private contractors. Hundreds, thousands of times in the past few years, San Francisco department heads have rolled over and given away the store in sweetheart deals that put the city on the hook for all the money, make the public take all the risk, and give a private outfit all the profit. Pacific Gas and Electric Co. (remember the Tulock-Modesto sellout contract?), Lennar Corp., Recurrent Energy, and countless other developers, builders, suppliers, and service providers have easily taken the public to the cleaners with contracts that never seemed to get stuck in the due diligence process.

But when there’s a looming deadline, hundreds of millions of dollars, and the city’s energy future and environmental footprint at stake, why is the San Francisco Public Utilities Commission moving so incredibly slowly to hammer out a deal for the city’s community choice aggregation (CCA) program? And why is PUC general manager Ed Harrington doing everything in his power to make sure that nothing happens that might put the city in the power business until after PG&E’s initiative, Prop. 16 — which would block public power efforts — passes at the polls?

It’s infuriating — and the supervisors need to tell the PUC that they won’t approve anything the agency does or wants to do until this contract is completed.

Harrington’s shop has known for more than a year that it needed to work out a business deal with a supplier that could replace PG&E and manage a program to buy greener, cheaper power in bulk and resell it to San Francisco residents. Marin County is setting up a similar program and is far ahead of San Francisco. The city has chosen a vendor, Powerchoice Inc., run by people completely qualified to handle the business.

And now there’s a absolute, drop-deal mandate: the city has to complete negotiations and get the program underway before the June 8 election. That’s because PG&E is spending $35 million to try to pass an initiative that would mandate a two-thirds vote of the public before any new CCA can begin selling power to customers. If San Francisco wants to present a solid legal case that its CCA is already in business, the contract with Powerchoice needs to be completed and signed, now.

But Harrington has, to put it kindly, been dragging his feet. The negotiations are hung up on a few points, although none are deal-breakers; Powerchoice already has agreed to assume some of the financial risk, which was the biggest obstacle to a deal. Now it’s just a matter of hammering out the details — but the PUC staff isn’t acting as if there is any time pressure at all.

In fact, last week Harrington circulated a draft press release all but announcing that he was tossing the whole deal under the bus and postponing negotiations until after the June election. He wanted to say that the "uncertainly" surrounding Prop. 16 made a deal impossible.

But Powerchoice isn’t walking away or complaining about the initiative. The company’s CEO, Sam Enoka, made it clear to us in an interview April 26 that he is eager to move forward. If Harrington — an experienced negotiator with a large staff at his disposal — and his boss, Mayor Gavin Newsom, wanted a deal, it could be finished well ahead of the deadline.

Instead, Harrington showed up at the Local Agency Formation Commission meeting April 23 with charts and a PowerPoint presentation purporting to show that renewable energy is too expensive to sell at rates comparable to what PG&E charges local customers. That misses the point — PG&E’s rates are going up every year and renewables are coming down, and the greatest risk to the city, the ratepayers, and the planet is sticking with the unreliable private utility that relies on fossil fuels and nuclear power for much of its electricity portfolio.

If the city has legitimate issues with Powerchoice, fine: Sit down and begin working them out. Now. But the only thing we can see at this point is the administration of a mayor who wants to be lieutenant governor intentionally delaying the process and giving PG&E exactly what it wants. (We called the PUC April 26, our print deadline, to ask why there were no talks scheduled that day, but Harrington wasn’t available; he was taking the day off.)

Sups. Ross Mirkarimi and David Campos suggest that the board simply refuse to sign off on any contracts, appropriations, or other approvals for anything the SFPUC does until this contract is completed. That’s a fine idea; they should start today.