February 5, 2003

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 LAFCO funds power study
Report will examine benefits of PG&E buyout

By Savannah Blackwell

The decades-old campaign to get San Francisco to provide cheap, reliable power to city residents marked a major victory Jan. 31 when the Local Agency Formation Commission agreed to start a study of whether the city should take over Pacific Gas and Electric Co.'s transmission and distribution system.

Three of the five commissioners – Sup. Matt Gonzalez, Sup. Jake McGoldrick, and Hope Schmeltzer – voted to pay R.W. Beck, a Sacramento-based consulting firm, $100,000 to begin a report on the possibility of municipalization. Sup. Tony Hall was opposed, and Sup. Tom Ammiano was absent because of illness.

The full cost of the study is tagged at $200,000. But LAFCO only has exactly that much left in its kitty – and the commissioners also committed to a $70,000 contract with R.W. Beck to study community aggregation. Under aggregation, 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 idea is that the commission would pay Beck to begin the municipalization study now and fund its completion during the next budget cycle, which starts in July.

For years the need for unbiased information on how much it would cost the city to get into the business of transmitting and distributing electricity has been a major issue in efforts to establish a public power system that would serve San Francisco residents and businesses.

PG&E spent nearly $3 million in its successful effort to defeat Proposition D at the November ballot. (Prop. D would have allowed the city to take over the utility's transmission system if a study showed doing so would reduce utility rates.) The company made all sorts of outlandish claims that rates would skyrocket – and without an official city study, supporters lacked ammunition to rebut PG&E's claims.

Hall argued that LAFCO shouldn't fund the study, saying it would help one side of the issue. Gonzalez countered that getting out the information is critical, even if it may inadvertently help or hurt one side or the other. Besides, he added, it is LAFCO's job to make government services more efficient. And exploring public power could be considered part of that mandate.

"Each side has been trying to sway voters – without this piece of vital information," Gonzalez said at the meeting. "If we don't [fund the study], we're not assisting the public with what the truth is."

For his part, Hall said he thought public power supporters should pay for the study. He told Bay Guardian editor and publisher Bruce B. Brugmann that he should have paid for the work.

"You've been a champion of public power. You know this is the element that's missing. Why didn't you do this on your own instead of asking government to pick up the tab?"

Brugmann and other public power activists at the meeting said the city should do the study as part of efforts to comply with the 1913 Raker Act – which granted San Francisco the right to build the O'Shaughnessy Dam in Yosemite National Park on the condition that it provide electricity generated by the system to the city.

Why, Brugmann asked, should the citizens – who have been forced to spend substantial amounts of their own time and money fighting ballot campaigns just to get the city to do its job and move the issue to this point – also have to pay for a study?

"We want to do what the Raker Act says and kick PG&E out," Brugmann said.

Other public power proponents, including Bob Boileau, Garrett Jenkins, Charles Kalish, and Richard Ow, urged the commission to move forward with the municipalization study. Brad Benson, Ammiano's chief aide, said the group should fund both the aggregation and the municipalization studies.

The mayor's chief energy advisor, Ed Smeloff, said LAFCO should not fund the takeover study at this time. He said he thought the city should focus on working toward aggregation and demonstrate to residents that it can handle that job before moving forward with other plans.

"It was a brilliant outcome," Sup. Tom Ammiano, who has pushed for public power at the ballot twice since 2001, later said of the vote. "We've paid our dues on this one. With this data, we'll get to see the rewards of all the public advocacy."

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