Public power's hour

Experts urge S.F. to kick out the private profiteers and win energy independence

By Rachel Brahinsky

"Commit yourself. Buy a bulletproof vest. Grow fangs and sharp nails. And get ready for the toughest fight of your life."

Tom Habashi, director of Roseville Electric, a small public power agency, wasn't mincing words. At a historic Feb. 22 hearing, he told the five-member San Francisco Local Agency Formation Commission that Pacific Gas and Electric Co. won't give up its private monopoly easily – but the battle will be worth it.

"You were told that you'd have 20 percent lower rates," Habashi said, referring to the broken promise of California's electricity deregulation law. Instead, he said, "you have higher rates, you can't buy your own power, and your service provider is bankrupt. I can't think of a better circumstance under which you should do this."

Habashi was one of seven energy experts who spoke at San Francisco's first-ever full-day, local government-sponsored public power hearing. The landmark event (thus far entirely ignored by the local daily papers) demonstrated how far the public power movement has come from the days when PG&E controlled the city hall agenda, keeping public power safely out of sight.

These days the gold-domed building is a far less friendly place for the utility. A majority of the Board of Supervisors favors public power and endorsed two public power ballot initiatives last year. Both measures narrowly failed in the November 2001 election, but supporters plan to place a new initiative before voters again this year.

The hearing was the first in a series organized by LAFCO and featured experts from the public power cities of Anaheim, Sacramento, and Roseville, as well as local advocates. The speakers said that public control of electricity slashes power rates, curtails blackouts, and protects consumers from profit-seeking utilities like PG&E.

"PG&E is not going to save you from an energy crisis. The only thing that's going to save San Francisco is to own your own resources," said Linda Davis, a member of the Sacramento Municipal Utility District board of directors. Davis said SMUD kept rates from skyrocketing during the power crisis last year because it maintains a rainy-day fund to preserve its financial health. "We don't have to pay dividends. We put money back into the system [or] back in the bank to prepare for a power crisis. PG&E is not saving their money in the bank for the city of San Francisco."

A key benefit to public power, the experts said, is control over energy reliability. Ed Smeloff, San Francisco's power chief, warned LAFCO that if the current plan to expand the Potrero Hill power plant is carried out, the city could be captive to the Mirant Corp., which owns the plant.

"Under the current design," he said, "a single failure would trip off the whole plant," potentially causing widespread blackouts.

The choice for San Francisco, he said, is whether to leave the city's energy plans in the hands of a private corporation or to keep them under city control.

There was some debate over whether the private sector could in fact serve the city better. Sup. Tony Hall, a LAFCO member, suggested that it would be cheaper for PG&E to fix San Francisco's aging wires and poles than for the city to do it, because PG&E has managed the system for so many years and has the necessary expertise.

Speaker Don Dame disagreed. "There is no mystery to electricity," he said. "A third of the power sold in the country is through a public power agency. The expertise you need to do it well exists." Dame is assistant general manager of the Northern California Power Agency.

The other speakers were Mary Tucker from the city of San Jose, California Power Authority CEO Laura Doll, and energy consultant Edward Aghjayan. Future hearings will likely feature representatives from the California Public Utilities Commission and PG&E. Hearing dates have not yet been set.

The majority of LAFCO commissioners support public power, and most endorsed the November 2001 initiatives. Commissioners said the expert testimony offered at the hearing backed up their assertions that public power will likely be an economic and social boon for the city, as it has been in communities statewide. "There are members of the public who are [frightened by] public power. So when they see people coming forward from such diverse communities talking about how they've been doing it for decades, it's a very powerful thing," LAFCO chair and S.F. supervisor Matt Gonzalez told us.

The next step for the commission is to select a consultant to prepare a full study of the city's public power options. Five firms have applied for the job.

In other business Feb. 22, LAFCO appointed two new members. Hope Schmeltzer, an environmental lawyer at the University of California, has worked for the state's renewable energy program, as well as for private law firms on environmental and land-use cases. Diane Fellman, of the San Francisco-based Energy Law Group, has 25 years of experience with energy law and has worked with both the private and public sectors. Schmeltzer fills the seat left vacant when Neil Eisenberg resigned from the commission last year. Fellman will serve as a commission alternate.

P.S. Another kind of blackout: Although city hall is paying attention to public power and public dissatisfaction with PG&E continues, the local dailies blacked out this key story. Not a word has appeared in the San Francisco Chronicle or the San Francisco Examiner; in fact, we couldn't find a single reporter from either daily present at the hearing. For video- and audiotapes of the hearing call LAFCO clerk Monica Fish at (415) 554-7702.

E-mail Rachel Brahinsky at rachel@sfbg.com.