By Matthew Hirsch

By purchasing and selling electric power in place of Pacific Gas and Electric Co., San Francisco can deliver electricity that is cheaper, more reliable, and better for the environment, according to two reports issued April 15 to the Local Agency Formation Commission.

The release of the reports, one authored by the San Francisco Public Utilities Commission and the other by citizen activist Paul Fenn, puts public power back high on the agenda in City Hall. SFPUC officials are expected to meet with Fenn to highlight how the reports differ before an April 22 hearing at which LAFCo will vote on recommendations to the San Francisco Board of Supervisors.

The reports detailed community-choice aggregation (CCA), which would direct the city to buy up wholesale electricity and generate renewable energy on behalf of residents and businesses. Instead of PG&E executives, the Board of Supervisors would then make key decisions on electric rates, paying PG&E only for the cost of transmission.

Ratepayer savings over 30 years could reach close to $700 million, according to an estimate in the city's CCA report. The lower cost would result from cheap electric rates in the wholesale market and even cheaper rates for generating renewable energy once the initial investment is paid off.

Before the city can offer rate savings, the SFPUC report notes, monthly electric bills would be a few dollars higher because of surcharges required by the state government for opting out of PG&E's utility service. But Fenn says they don't have to be higher if the city spreads out the surcharge expense over time. "The fact that you have higher operating costs doesn't mean you have to have higher rates," he told the Bay Guardian.

Once the city files its CCA implementation plan, the California PUC will set the surcharge amount, which is expected to increase as PG&E purchases more electric power to sell in the San Francisco market before CCA can kick in.

The question for LAFCo at its April 22 hearing is how much to incorporate Fenn's report into the final recommendations that get forwarded to the supervisors. The SFPUC report lays out how to implement CCA, but it lacks some specific goals Fenn set forth. He says under CCA, San Francisco can build 360 megawatts of renewable energy in the next three years. Twelve years from now, he says, the city can be using 51 percent renewables.

Sup. Ross Mirkarimi, who chairs LAFCo, told us CCA and municipalization (buying up PG&E's transmission lines) are "intersecting but distinct paths" for taking local control from PG&E. Pursuing CCA would not forestall the move toward local ownership of the electric system, he said. "If anything, we may become more complacent, or lulled, by community-choice aggregation. It could invariably distract us from pursuing municipalization."

P.S. LAFCo holds a special meeting on CCA Fri/22, 2 p.m., City Hall, Room 263, 1 Dr. Carlton B. Goodlett Pl., S.F. For the meeting agenda and copies of the two CCA reports, go to www.sfgov.org/lafco. A Board of Supervisors hearing on CCA will likely follow on Tues/26 in the City Hall Legislative Chamber. Call the Clerk's Office at (415) 554-5184 for more information.

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