Cleaner and cheaper

The Clean Energy Act could mean lower carbon emissions — and lower electric bills
Illustration by Wong Illustration

>>Click here for our chart explaining how San Francisco can take over PG&E's system -- and wind up with $214 million a year in extra revenue. (PDF)

>>Click here for a comparison of public power and investor-owned utilities on rates and renewable energy. (PDF)

>>Click here for a comparison of Mark Leno's Sacramento PG&E and SMUD (public) bills. (PDF)

Pacific Gas & Electric Co. has been saying that if the Clean Energy Act passes, it will cost the city $4 billion — and electricity bills will go up $400 a year per household to cover the costs.

But according to a Guardian analysis, a publicly owned utility could cover the costs of taking over PG&E's system, finance enough renewable energy generation to make the local grid 50 percent green, and still generate $214 million a year in surplus income — without raising rates a dime.

In fact, the city could cut electricity rates by 15 percent — so that the average San Francisco home using 1,000 kWh a month would save $400 per year — and the system would still make $107 million profit annually.

Our analysis is based on conservative assumptions, and probably underestimates the city's potential revenue. The figures all come from publicly available sources.

The bottom line: PG&E's campaign materials are, at best, gross distortions of the truth.


The Clean Energy Act, which will appear as Proposition H on the November ballot, mandates that the city undertake a study to determine the most cost effective and expeditious way to achieve 100 percent renewable energy by 2040.

If the study determines that a publicly owned utility would provide the cheapest, cleanest energy, the first thing the city would need is a distribution system — the wires, poles, substations, breakers, and all the other physical infrastructure required to provide power. The legislation authorizes city officials to issue revenue bonds to build a distribution system or to buy PG&E's, either through a negotiated sale price or eminent domain.

In 2001, the last time the city voted on a public power measure, PG&E said its system was worth $1.4 billion. Seven years later, although much of the system has deteriorated, the price has jumped to $4 billion. But utility officials freely admit they have no hard numbers: in a letter dated July 24, David Rubin, the director of service analysis, wrote, "PG&E has not done an inventory of its system, but it is readily apparent that the fair market value of PG&E's electric system exceeds $4 billion ... "

There are, in fact, hard numbers on the value of the system — numbers that both PG&E and state tax officials have used and agreed on for years.

The state Board of Equalization is tasked with determining property values on utilities and levying taxes accordingly. In 2007 the board reports, PG&E paid taxes on property worth $1.2 billion in San Francisco. That's what the state auditors say is the value of everything PG&E owns here, including both the electricity and gas distribution lines, the buildings on Market and Beale streets, the service center, vehicles, desks, computers — much of which the city would have no interest in acquiring.

According to documents acquired through a public records request, the city controller's office assumed in its ballot analysis of the cost of Prop. H that 50 percent of the assessed value was utility related.

We'll make the same assumption.