SAN FRANCISCO'S LOCAL Agency Formation Commission is set to consider a study of how to create the equivalent of an electricity-purchasing pool in the city. It's a good idea and could be a major new step toward implementing a full-scale public power system. But it's crucial that city officials continue to push toward the long-term goal: city ownership of the transmission lines and all other infrastructure necessary to operate a power system without Pacific Gas and Electric Co. or any other private utility.

As Savannah Blackwell reports, the latest move in the public power struggle comes as a result of a bill by former assemblymember Carole Migden, which was passed this fall. The measure allows cities to set up "community aggregation systems," which would buy power in bulk from private utilities and sell it to customers at retail rates. Although customers in San Francisco would pay their power bills to the city, the energy would be delivered along PG&E's lines. The bill requires the utility to lease space on its lines to deliver that power. The law also makes cities that implement community aggregation systems the default power suppliers – for example, all customers in San Francisco would automatically become city customers unless they chose otherwise.

The benefits would be immediate and obvious. San Francisco wouldn't have the sort of massive overhead PG&E has (or the costs of the company's bankruptcy proceedings). And the city wouldn't be shipping hundreds of millions of dollars out of town to fund subsidiaries and investments all over the world, as PG&E does (see "PG&E, the Evil Empire," 10/6/02). So it's virtually certain San Francisco could provide cheaper power than PG&E and still make some money for the General Fund in the process.

Creating a community aggregation system would, for the first time, put San Francisco in the retail power business. That means the city would be setting up some of the basic operations needed for a public utility. And city officials would have the opportunity to demonstrate that a public agency does have the ability to efficiently run an electric utility – which would undercut one of PG&E's main arguments against public power.

The city agency running the aggregation (most likely the Hetch Hetchy Department of Water and Power) could – and should – set up a complaint hotline for consumers to log their problems with service or billing and make sure those problems are promptly addressed. PG&E has a terrible customer service record, so good service would immediately create good will toward the new agency.

San Francisco would still have to pay PG&E a fee (set by state law) for the use of the company's lines, jacking up the rates customers would have to pay. And the city would still be forced to rely on PG&E's antiquated, unreliable, blackout-prone infrastructure – with no ability to upgrade or repair it. Aggregation would be a good first step, but it can't offer the same benefits as a full public power system.

Sup. Tom Ammiano, who is proposing the community aggregation study, has vowed to push for a second study: a long-term energy options assessment that would include a full analysis of the costs and benefits of taking over PG&E's local system. LAFCO has already taken a preliminary step: a study by R.W. Beck and Associates, commissioned by LAFCO last year, showed most public power agencies have rates 20 percent lower than PG&E's and offered some basic ideas about how the city could move toward public power. The next move is to direct a consultant (and R.W. Beck is the most logical candidate) to determine how much it's likely to cost to buy out and upgrade PG&E's equipment (or, maybe even better, to build a new, state-of-the art electricity distribution system), to look at how much revenue the city would get from running a full-scale public utility, and to determine how cost-effective it would be to replace PG&E with a city-run utility. The study should also evaluate the economic impact high PG&E rates are having on the city and how the economy would benefit from cheaper public power.

The lack of a solid city study demonstrating the benefits of municipalization made the campaign for public power this fall much more difficult. LAFCO should vote Dec. 20 to hire contractors to conduct both studies, as part of a coordinated plan to address the city's energy problems in the short and long term.

Public power is back – and the challenge is to keep it alive and moving forward properly, to enforce the Raker Act and the 1940 U.S. Supreme Court decision, and to end PG&E's costly monopoly for the duration.