IN 1939, with U.S. Interior Secretary Harold Ickes demanding San Francisco comply with the Raker Act and create a public power system (and the U.S. Supreme Court about to hear the case that would cement in law the city's obligation not to let Pacific Gas and Electric Co. control the local electricity grid), the San Francisco Board of Supervisors approved a scandalous deal to give PG&E a perpetual franchise to sell power in the city. Under the deal, the company paid the city $200,000 cash and agreed to pay just one half of 1 percent of all power-sale revenue.

Sixty-six years later, San Francisco's still stuck with this rotten franchise. While other cities are making tens of millions of dollars a year off their utility franchise fees (San Jose pulls in $13.5 million; San Diego, $40 million), San Francisco gets just $3 million.

It's time for the city to take legal action to amend the franchise deal.

It won't be easy: PG&E will fight bitterly, and the city will rack up significant legal expenses. But as Matthew Hirsch reports on page 12, S.F. lost almost $1 million this year in franchise payments – and if the city could get even half of what San Jose does, it would cover a huge legal bill in just the first year.

There are bold options: The city could buy back the franchise for $200,000 – which remains the city's right – and tell PG&E officials they need to negotiate a new deal. In theory the company could threaten to turn off all the city's power; in practice that would never happen (and it's unlikely the courts would allow it).

There are obvious political options: City Attorney Dennis Herrera could threaten to get a court order mandating enforcement of the Raker Act, which would put PG&E squarely on the defensive. And there are any number of tactical legal approaches that could drag PG&E to the table.

The damage to the city since 1939 runs into the hundreds of millions of dollars. The supervisors should direct Herrera to move forward, with all due dispatch, to undo it.