THERE'S NO GOOD reason for San Francisco residents and businesses to be paying higher water and sewer bills. If the San Francisco Public Utilities Commission hadn't been helping block public power for 80 years, the agency would have plenty of cash to cover the costs of upgrading and rebuilding the Hetch Hetchy water system. It's pretty basic urban math: cities make money selling electric power. Water isn't, and shouldn't be, a cash cow.

And the across-the-board water hikes the city is proposing are, in effect, a regressive tax. The PUC ought to suspend implementing those hikes until general manager Susan Leal can demonstrate that she's pursuing the other obvious revenue options.

There's no question that the San Francisco water system – which also serves 1.7 million suburban residents – is in bad disrepair. The pipes that carry the water from the dam and reservoir high in the Sierras aren't up to seismic standards (and cross three earthquake faults). Many of the local sewer pipes are 70 years old, and the treatment plants are a smelly health hazard. It's going to be expensive too: the city has already approved a $1.6 billion bond act, and the suburban users are putting up another $2 billion, and it still won't be enough.

This entire crisis, of course, is the legacy of the city's failure to comply with the Raker Act, the 1913 act of Congress that authorized the construction of the dam in Yosemite National Park and required the city to operate both a public water and a public power system. Public power could easily bring in $200 million a year in profits – and with that kind of annual cash flow, keeping the water pipes in good condition wouldn't be such a problem.

But Leal hasn't done a single thing to turn the PUC into what it should be – a leading advocate for public power – and is even dragging her feet on the modest proposal for community-choice aggregation (see Editorial, 3/23/05). Meanwhile, as we reported in August (see "Pirates of San Francisco Bay," 8/18/04) and budget analyst Harvey Rose confirmed in his recent agency audit, the PUC can't even collect the outstanding payments its owed: the Treasure Island Development Authority owes the PUC $1.6 million for water and power service. The Presidio and SBC Park also owe hundreds of thousands.

And Leal hasn't even given the PUC a detailed plan for how the regional water system will look when all the capital improvements are finished. Will there be new, larger dams (mostly to benefit suburban development and sprawl)? Will there be more talk of the ridiculous idea of tearing down the Hetch Hetchy dam? Nobody knows.

To its credit, the PUC has added one new source of revenue: for the first time in history, the commission wants to charge real estate developers a sewer-capacity fee for all new residential and commercial projects. But the current proposal – $2,604 for every new housing unit or the commercial equivalent – is far too low and should probably be doubled.

Water users (and the supervisors, who oversee the PUC's budget) should demand that the agency suspend the rate hikes until the commission has formally adopted a public power plan, passed a community-aggregation plan, collected its outstanding debts, and provided a written guarantee that the Hetch Hetchy dam will remain (and no more dams will be built). And Mayor Gavin Newsom, who appointed Leal and appoints the PUC commissioners, needs to hold his people accountable and call for a moratorium on these regressive and poorly conceived rate hikes.