PG&E's $107 million lie

Prop. H not only sets aggressive targets for renewable energy; it opens the door for a city-owned and city-operated electrical system

EDITORIAL The entire focus of the campaign against the Clean Energy Act is the claim that the measure will cost you money. This isn't rocket science: Pacific Gas and Electric Co. has clearly paid for expensive polling and focus groups, and concluded that this is the best way to attack Proposition H. It's brutally cynical. The PG&E strategy assumes that San Franciscans are essentially selfish and would be unwilling to spend a little more money on electricity in exchange for radically reducing greenhouse gases. In Marin County — admittedly, a wealthier area — polls showed the opposite to be true: residents were willing to pay more to save the planet. And if you asked San Franciscans the question honestly, most would probably answer the same way as their neighbors to the north.

But the most astonishing part of PG&E's claim is that it's utterly false.

As Amanda Witherell reports in this issue, Prop. H will save consumers money. It will save the city money. Like most modern clean energy proposals, it challenges the notion that greener has to be more expensive. Prop. H, our analysis shows, would allow the city to cut electric rates, dramatically shift away from fossil fuels — and still wind up with a surplus.

In fact, if the city cut rates 15 percent — saving the typical ratepayer $400 a year — a municipal utility would wind up with $107 million in surplus revenue every year — after paying off the cost of taking over PG&E's system. That's enough to fund massive investment in renewable energy, keep the power infrastructure well maintained, and leave extra money on the table to fund other city services.

If the city keeps rates at what PG&E currently charges, the surplus would reach $214 million.

The reason is simple. Prop. H not only sets aggressive targets for renewable energy; it opens the door for a city-owned and city-operated electrical system. And as the charts on page 14 show, residents of every community in California that has a publicly-owned electric utility pay lower rates than San Franciscans pay to PG&E. Most of those cites generate significant revenue from their publicly owned utilities.

Again, this isn't rocket science. PG&E is a private company that pays exorbitant salaries to top executives. Your rates cover that. The company also has to make a profit every year to satisfy shareholders; your rates pay for that as well. And as the San Francisco City Attorney's Office has shown in legal briefs, PG&E has taken millions of dollars of your money out of town and used it to invest in power projects (including many fossil fuel projects) all around the world.

PG&E will never have an incentive to shift to decentralized renewable energy (for example, solar panels on homes) because the company makes no money from that sort of generation.

City-run utilities pay more modest salaries to managers, are under public scrutiny, and aren't out to make a profit. The goal is to serve the public — and if the best way to do that is to encourage every resident and business to have renewable generation onsite, the public agency isn't forced to consider the impact on its bottom line.

It's no surprise, then, that public power systems like the Sacramento Municipal Utility District are leaders in alternative energy — and that PG&E, which operates a nuclear power plant and continues to build new fossil fuel generators, can't even make the modest state-mandated targets for renewable power.

This needs to be a central part of the campaign for Prop. H. PG&E calls the measure a blank check — but the truth is, PG&E gets the equivalent of a blank check nearly every year from state regulators, who allow the company to raise rates, pay luxurious bonuses to executives, and waste hundreds of millions of dollars on projects that have nothing to do with providing electric power to San Franciscans.


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