EDITORIAL The way the San Francisco Chronicle describes it, the city's new green power program "won't come cheap." That's a line that Pacific Gas and Electric Co. will use over and over again in the next few months as the city finally prepares to get into the retail electricity business, 98 years after Congress mandated public power for San Francisco. Clean Power SF will offer 100 percent clean energy — and yes, right now, this spring, it will cost a little bit more than buying nuclear and coal power from PG&E.
But that price differential will change dramatically in the next few years — if the city goes forward not just with buying and aggregating power from the commercial market but developing renewable energy on its own.
That's the key to the future of Clean Power SF — and as a proposed contract to get the system up and running comes to the Board of Supervisors, the need for a city build-out of at least 210 megawatts of energy generation capacity is, and must be, an essential part of the plan.
As Rebecca Bowe reports in the Guardian, there's some disagreement about the contract proposed by the San Francisco Public Utilities Commission. The deal with Shell Energy North America would have the energy giant buy green power wherever it can, deliver it to San Francisco customers along PG&E's lines — and charge enough to pay for the power and overhead expenses. That, initial reports say, could raise the bill of an average customer somewhere between $7 and $50 a month, depending on use. For most residential customers, the increase is going to be on the low end.
The problem is that the PUC estimates from the start that two-thirds of the potential customers will drop out of the program and stick with PG&E. That's an abysmal projection, reflecting in part the PUC's long reluctance to take the program seriously, in part a failure to plan an aggressive marketing campaign — and in part the lack of a long-term vision for the program.
The bottom line is simple: As long as the city is buying energy from somebody else, there are going to be problems. Right now, renewable energy demand exceeds supply, so prices are high. That's going to fluctuate over the next decade.
But it's entirely possible for the city to build its own renewable infrastructure and generate power that will beat PG&E's prices in the short-term future — and will be far, far less expensive a decade down the road. Clean Power SF will never work to its full potential unless the city owns a significant part of the generation system. (Ultimately, the city will never see the full economic benefits of public power until it buys out PG&E or builds its own delivery system.)
The PUC included — at the demand of public-power advocates — a clause in the contract stating that a city build-out was part of the plan. The proposal before the board only includes the contract with Shell — but the final deal should include specific plans for how much local power will be generated, how it will be funded — and how it will ultimately replace the power Shell is providing. The city should start right now looking for sites (there's lots of surplus city land) and seeking bids for construction, and if the PUC can't come up with enough revenue-bonding money, the board should put a comprehensive clean energy bond on the November ballot.
The Local Clean Energy Alliance estimates that building 210 megawatts of clean power in San Francisco would generate nearly 1,000 direct jobs and as many as 4,300 indirect jobs. That sort of program would be a boost to the economy and guarantee the city stable energy sources for the future. And it would allow the PUC to market Clean Power SF not as a plan that will cost consumers more today — but as a plan that the city can all-but guarantee will save you money, substantial amounts of money, over the next ten years.