By Rachel Brahinsky

SUP. TOM Ammiano introduced the final version of his public power measure June 17, and it's missing two key provisions that drew supporters to his public power campaign last fall: democratic management for a new power agency and broad authority to take over Pacific Gas and Electric Co.'s energy system. Instead, Ammiano wants to create a new public power agency run by an appointed board (which the mayor could easily control) and has limited rights to municipalize PG&E's grid.

The move comes just three days after a city consultant released an energy study demonstrating that the best way to ensure low prices and reliable power is for the city to own the local electricity distribution system while also controlling generation and transmission. That would mean either building a new system from scratch or taking over PG&E's wires, lines, and poles.

Ammiano and Sup. Sophie Maxwell, who is cosponsoring the measure, are selling the charter amendment as a means to close the aging Hunters Point power plant and a tool to achieve ambitious environmental justice goals for the city. And in fact, the measure has some extremely progressive components, including job development for disadvantaged residents, especially those living near polluting power plants. It sets a 2005 deadline for closing the Hunters Point plant. And it could help stop the expansion of the Potrero power plant by allowing the city to develop alternatives.

Still, critics argue that environmental justice should be an essential part of a more ambitious public power mandate – and that it's unlikely a system still owned in part by PG&E would be able to fully achieve those goals.

Consultants for R.W. Beck, who completed the draft study June 14, say full municipalization is more likely to bring greater benefits over the long term – although they were extremely cautious and did not recommend any single path. "Owning the distribution system is key to being successful and to getting integrated benefits," Ken Mellor, one of the report's two main authors, said. "Ultimately to get to 20 percent [savings], I think you have to own the distribution system."

Ammiano has been working for weeks to craft a measure that appeals to a broad constituency. Ownership of the grid and governance of the new agency have been the most contentious aspects of the debate so far.

But Ammiano said this week that he's been counseled to avoid a full takeover. "All the advice that we've gotten is that you don't really want to do it in the first three years," he said. He said he's not totally opposed to including broader language, but he didn't indicate that he would add such language himself. For now, the measure says that if the city arranges an agreement to use PG&E's wires, and if the city controller says that agreement is fair, the new power agency would not be able to issue revenue bonds to take over PG&E's system. That doesn't stop the city from moving forward with the takeover – but ultimately it creates a major obstacle. Revenue bonds are the best way to finance a utility takeover; without that option the city would likely find the move would be too expensive.

By deciding to go with a more moderate measure, Ammiano is hoping to secure support from groups like the San Francisco Planning and Urban Research Association and maybe even the Chamber of Commerce, both of which opposed the public power campaign last year.

Labor support is also key: last year the International Brotherhood of Electrical Workers, Local 1245, the largest PG&E employees' union, opposed two public power measures because of their strong acquisition language. This year the San Francisco Labor Council may be swayed by Local 1245's position (see "High-Voltage Debate," 6/12/02).

But PG&E is already against the measure, according to a utility spokesperson quoted in the San Francisco Chronicle June 17. That means there will almost certainly be a multimillion-dollar campaign to defeat the proposal. And generally Local 1245 takes its political cues from PG&E.

At the same time, Ammiano risks losing the vigorous support of public power supporters and progressive activists. Last fall's two measures, which went down to a narrow defeat at the polls, were driven by a passionate grassroots effort, not by a big campaign war chest. This time, while many are rallying around any improvement to the power system, some activists fear that last year's enthusiasm could harder to generate.

Outside factors

Ammiano's measure, and the success of any new agency it would create, also depends on the passage of a piece of state legislation, Assemblymember Carole Migden's Community Choice bill, which will be heard by a state senate committee next week (see "Power Alerts"). The bill, a similar version of which was killed by Gov. Gray Davis last year, would give the city the right to sell power to residents – even if PG&E retained ownership of the wires and poles.

In its current form, the bill would keep energy-efficiency planning and funding in PG&E's hands – so even if the city could sell power, it would not be able to control its portion of the $300 million spent annually statewide on efficiency programs. The author of the original bill, Paul Fenn, of Oakland-based Local Power, is lobbying legislators to rewrite the language to allow communities to control those funds, which he says is fundamental to the success of any municipal solar power or energy efficiency program.

If Fenn's effort isn't successful and the bill doesn't pass, Ammiano's agency could wind up with extremely limited powers.

Public power advocates aren't the only ones who say it's important for the city to control the local distribution system. The assessments in the R.W. Beck study, released June 14, suggest Ammiano's measure could go much further (see "The Beck Report").

"The Beck study goes beyond where political will has stopped short," San Franciscans for Public Power spokesperson Ross Mirkarimi said.

At a June 17 hearing on the study, Mirkarimi urged the commission to go further with its energy inquest, by asking a consultant to do a cost-benefit analysis of public power options, including a full-system takeover.

Some public power supporters are critical of the Beck report. "It provides good grounding for a public discussion, but it's weighted toward a more conservative and less comprehensive view," said Robin David, a former PG&E employee and cofounder of the Labor Task Force for Public Power.

"The report doesn't focus enough on how eliminating the profit motive saves money," said Dennis Mosgofian, a longtime labor leader and member of San Franciscans for Public Power.

Dan Berman, author of Who Owns the Sun? People, Politics and the Struggle for a Solar Economy, told us the study should delve deeper into the role of the federal government. "The winds of national policy are blowing against us," he said. "They're saying we need to continue to deregulate. The trend is toward federal control, or no control at all."