January 29, 2003

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LAFCO set to fund power study

Three members say they support review of municipalizing PG&E

By Savannah Blackwell

A majority of the members of San Francisco's Local Agency Formation Commission say they will vote to fund a comprehensive study on the city's energy options that would include a review of the costs and benefits of taking over Pacific Gas and Electric Co.'s local distribution system.

Sups. Tom Ammiano, Matt Gonzalez, and Jake McGoldrick have all told the Bay Guardian they are committed to studying whether the city should take over PG&E's system or build a new, publicly owned system. Such a move would put San Francisco in compliance with the 1913 federal Raker Act, which granted the city the right to build the O'Shaughnessy Dam in Yosemite National Park on the condition that it provide electricity generated by the system to San Francisco, and it would get PG&E out of the business of selling electricity to residents at rip-off rates.

"We've got to do it," McGoldrick said.

At its Jan. 31 meeting, LAFCO is scheduled to consider funding two studies by Sacramento-based energy-consulting firm R.W. Beck: one, a $70,000 report to figure out the best way for San Francisco to become a community aggregator (whereby the city would organize residents and businesses into a pool of customers in order to get a cheaper deal on electricity than individuals can get from PG&E); the other, an estimated $200,000 study of whether it would make environmental and economic sense for the city to either take over PG&E's transmission system or to build its own.

The problem is, LAFCO only has about $200,000 total available for studies. Given the severity of the city's financial crisis, it may be difficult for commissioners to convince other supervisors to free up money from the General Fund to pay for both studies.

The five-member commission is likely to unanimously support paying for the aggregation study.

But one member, Sup. Tony Hall, is adamantly opposed to studying whether the city should municipalize PG&E outright, and another, Hope Schmeltzer, may not go for it either.

Schmeltzer helped put together a list of spending priorities for LAFCO in December that said the commission should split the $200,000 it has available for professional studies on the aggregation report and reports on other matters, such as ways to generate electricity from ocean tides (see "Keeping the Light On," 12/25/02).

But it's also possible the LAFCO commissioners may work out a deal with R.W. Beck under which they agree to fund as much work on the municipalization study as they can and then pay for further study later as funds become available.

"It sounds like we may get into some discussion such as, 'Can we do one and start the other?' " Mike Bell of R.W. Beck told us. "It will be interesting to see what happens."

Schmeltzer did not return a phone call seeking comment.

E-mail Savannah Blackwell at savannah_blackwell@sfbg.com.