OPINION Achieving a more sustainable San Francisco means a city running on clean power. It also means maintaining our infrastructure to keep San Francisco functioning.
Right now, our city can do better on both fronts, and legislation we are sponsoring will help move us in the right direction by increasing our use of clean, hydroelectric power while generating more revenue for infrastructure investment in our streetlight and power systems.
San Francisco's Hetch Hetchy power system produces a massive amount of clean, hydroelectric power, yet our city uses very little of this energy despite our stated goal of moving toward 100 percent clean power by 2030. Moreover, the operator of this power system, the San Francisco Public Utilities Commission (PUC), has massive unmet infrastructure needs. Our streetlights, most of which are owned by the PUC, are badly in need of upgrade, and PUC's power delivery system has almost a billion dollars in deferred maintenance.
To address these challenges, we are authoring legislation to bring more revenue-generating, clean power to San Francisco.
For over 100 years, the PUC has provided 100 percent clean, hydroelectric power to municipal agencies, including Muni, the San Francisco International Airport, San Francisco General Hospital, police and fire stations, libraries, and our public schools. Using this clean public power saves taxpayers millions versus what we would pay if we were to purchase PG&E power. Hetch Hetchy generates 1.43 million megawatt hours of clean power a year and is 100 percent greenhouse-gas free. This is a tremendous asset, but it has been underutilized.
Any excess public power that the PUC generates and doesn't use for governmental customers is now sold on the wholesale market at a significantly reduced rate. Retail rates are around four times higher than wholesale rates. This means that with every megawatt sold at wholesale rates, the PUC is losing out on significant revenue to address its aging infrastructure needs.
If the PUC obtains more customers paying retail rates, we can generate more revenue to upgrade and improve our failing streetlight system and address the power system's massive deferred capital needs. The PUC estimates that for every 10 megawatts sold to new retail customers — rather than selling that power on the wholesale market — we will see a net revenue increase of $4 million per year.
That is why we are sponsoring legislation to bring the PUC more retail customers and hence more infrastructure investment. The legislation provides the PUC with the right of first refusal to be the power provider for new development projects in San Francisco, including large private projects. This will allow the PUC to determine if it feasibly can serve as the power provider for these new developments, and in doing so expand the agency's retail customer base.
Allowing the PUC the flexibility to add retail customers will move us toward a more financially sustainable public power system, while providing 100 percent greenhouse-gas free power to our city and generating significant resources for infrastructure investment, including for our streetlight system.
Some have raised questions about what this legislation means for the future of CleanPowerSF, our previously approved clean energy program that has been stalled by the PUC Commission's refusal to set rates. These two public power measures are not in any way mutually exclusive, and both can move forward. We are both supporters of CleanPowerSF, and we want it to succeed.
We know the PUC can provide reliable, greenhouse-gas-free power that works for its customers. Anyone who disagrees can just look at San Francisco International Airport. If the PUC can reliably provide power to serve one of the most significant airports in the world, powering new housing and commercial developments won't be a problem.