WITHIN THE NEXT two years, if things work out right, San Francisco residents and businesses could be paying lower electric rates, getting better service (including a real complaints center), and using energy from more renewable sources. In a few years more, the city could be generating and selling enough solar energy to power 60,000 houses, giving San Francisco the largest city-managed solar utility in the world. Pacific Gas and Electric Co.'s filthy Hunters Point plant could finally be shut down, and the private utility's stranglehold on the city's energy future could be broken. The city could be well on its way to creating a full-scale public power system, with hundreds of millions of dollars of badly needed revenue pouring into local coffers every year.

Think about it: The money that the city could make from solar sales and public power could dwarf the current deficits, providing funding for improved (not just adequate) public health programs, housing for the homeless, infrastructure repairs, recreation and park facilities, open space, and much, much more.

The first step, which will come before the Board of Supervisors in July, is called community-choice aggregation. Put simply, the system would allow San Francisco to create the equivalent of a buyers' co-op for electricity. The city would buy power in bulk from any number of competing suppliers, then resell that power to residents and businesses. A 2003 study by R.W. Beck and Associates, the highly respected Sacramento energy consulting firm, concluded that local customers would save anywhere from $10 million to $35 million in the deal.

Obviously, the supervisors ought to be moving forward on this. But they need to move carefully – because there's a risk to the plan as well. If the city officials who manage the community aggregation program screw it up – either willfully or because of bureaucratic bungling – customers will be furious, and the cause of public power may be set back a generation.

If CCA is going to work, it will have to be crafted to avoid any hint of secrecy, privatization, or PG&E-based corruption. That's a tough task for a city that's been so dominated by PG&E for so many years that even baby steps toward public power have been a bitter uphill struggle.

Here are some of the key elements that have to be in place:

. CCA is just a first step. It's crucial that everyone involved in writing the final legislation and setting up the system keep in mind that aggregation is just one step along the road to removing PG&E entirely from the local energy system. Under CCA, PG&E would still own the power lines in town, and the city would pay a fee to have its own bulk power shipped along those lines to customers. Ultimately, that's a waste of money. If the city owned the lines, the way public power systems in 11 other northern California cities do, vast sums of money that would otherwise go to PG&E could be used for city services. The legislation creating the CCA system needs to state clearly that it's in the public convenience and necessity for San Francisco to own and operate its own utility, and that this new system is being created as a step in that direction. Nothing in the CCA project can be allowed to delay or undermine a future city-owned utility system.

. Keep PG&E and the other private energy firms as far away as possible. San Francisco will have to buy power from private suppliers, but the relationship should begin and end there. The private companies should have no management, operations, or planning role. All facilities (including the new solar generating stations) should be run directly by the city. All contracts should be bid on competitively, with an independent review board evaluating the bids – and all records should be public. PG&E should have no role at all, except as a transmission vendor.

It's important the city handle all the billing, not only to avoid PG&E's horrible service but also to remind people that they're buying power from a city agency.

. Get ready now to fight PG&E treachery. It's a certain bet that as soon as the city sets up its own retail co-op, the giant utility will try to cherry-pick the best clients in town and keep them for itself. By offering big discounts to large industrial customers (which PG&E is already starting to do), PG&E can try to skim off the cream and stick the city with the smallest and most costly users. The idea: Undermine the CCA system's profitability and force it to raise rates, leading to public discontent (and a black eye for public power).

The mayor and the supervisors need to immediately contact the California Public Utilities Commission and demand that PG&E be barred from that sort of anticompetitive activity, and should ask Assemblymember Mark Leno and state senator Carole Migden to push for legislation preventing the practice.

. Prepare to market the city's program aggressively. The minute a city-run electricity program gets underway, San Francisco will be in direct competition with PG&E for customers. The private utility has a huge advertising budget and will make every effort to disparage the city system. So the city needs a well-funded program to explain to customers the value of a municipally run power system.

. Don't let the PUC mess this up. The San Francisco Public Utilities Commission has a long history of antipathy to public power and has been way too friendly with private vendors like Bechtel Corp. We agree with Sup. Ross Mirkarimi that management responsibility has to be under a city agency, and while we'd prefer a charter amendment creating a new Department of Municipal Power, for the moment the PUC is the only choice we have. But it's essential that the supervisors retain tight oversight. All final decisions on contracts and rates should go through the board. Either the Local Agency Formation Commission, which has taken the lead on this issue so far, should have a specific mandate to monitor CCA or the supervisors need to create a new committee to do that.

There will be tough decisions early on (how, for example, to keep rates low and still pursue an ambitious alternative-energy agenda). That's not the sort of thing the PUC should handle without extensive hearings, public input, and board oversight.

This could be a wonderful opportunity – or a costly diversion. The supervisors must be sure to set the right guidelines to keep CCA on track.

PS: If the supervisors want to see what happens when you let the private sector dominate a public project, just look at the Presidio, which the San Francisco Chronicle lauds in a June 19 story for its financial solvency. Look at the costs: Private commercial development forcing out nonprofits. Huge traffic and infrastructure issues as Lucasfilm opens a big, new office. Housing that goes to the wealthy, not the needy. Some national park.