SF CHRONICLE: Three years in, SF power program reaping cost, environmental benefits

Dominic Fracassa | January 1, 2020

San Francisco has managed to reap some considerable environmental and economic benefits since launching its duo of municipal electricity just over three years ago — CleanPowerSF and Hetchy Hetchy Power — according to new data from the city’s Public Utilities Commission, which runs both programs.

Both programs allow San Francisco to purchase electricity from a variety of sources, including solar, wind and hydroelectric suppliers. At the time, city officials envisioned supplying San Francisco with a cleaner mix of electricity compared with what had been supplied by Pacific Gas and Electric Co., and at competitive rates.

“When we were launching these programs ... it was important to ask ourselves, ‘Could we maintain affordability? Could we meet or beat PG&E’s rates?’ And we succeeded in doing that,” said Barbara Hale, the SFPUC assistant general manager in charge of power.

Combined, the programs serve roughly 80% of San Francisco’s total electricity demand.

The Hetch Hetchy program powers San Francisco’s municipal buildings, the Muni system, San Francisco International Airport and Zuckerberg San Francisco General Hospital, among other customers, with greenhouse-gas-free electricity.

From April 2016 to October 2019, the Hetch Hetchy program saved the city and its additional customers $137 million, compared to what they would have paid if they stayed connected to PG&E, according to the San Francisco Public Utilities Commission. Because the SFPUC bought the power from carbon-free sources, customers also avoided pumping nearly 723 million pounds of greenhouse gases into the atmosphere.

That’s the equivalent of removing nearly 70,000 passenger vehicles driving more than 813 million miles from the road for a year, according to the Environmental Protection Agency.

The SFPUC automatically enrolled swaths of San Francisco in its CleanPowerSF program in stages. It wrapped up this year with about 360,000 dwellings participating in the program. Savings for CleanPowerSF have been comparatively modest.

Since it launched in May 2016, the program has saved customers more than $11 million, compared to what they would have paid with PG&E, according to the city. Rates are adjusted year-to-year, but currently, CleanPowerSF customers each save $21 annually compared with PG&E’s rates.

“It’s not a huge amount, I acknowledge that,” Hale said. “But all costs are going up for households, so anything we can do to slow down those increases is helpful.”

The savings would have been greater, Hale said, if the city didn’t have to pay to use PG&E’s last-mile infrastructure.

While the power is sourced and purchased by the SFPUC, the city still relies on PG&E’s vast network of infrastructure to distribute the power to homes, businesses and government buildings.

In recent months, both power programs have been thrust into the center of the city’s attempts to reimagine its energy future, particularly around achieving its ambitious climate goals. The city has pledged to rid the city’s energy supply of greenhouse gases by 2030 and become entirely net-zero emitters by 2050.

San Francisco officials — including Mayor London Breed and members of the Board of Supervisors — have signaled a desire to lessen the city’s reliance on PG&E by buying chunks of the company’s infrastructure, which would likely cost billions of dollars. The company has rejected San Francisco’s initial overtures, but city officials insist the proposal remains a possibility.

The desire to divorce from PG&E has deepened in the face of repeated spats between the city and the utility company that arise when officials try to hook up power to city-owned facilities. SFPUC officials maintain that PG&E has mandated arbitrary technical requirements that force designers to retool their projects, leading to cost overruns and significant delays.

Programs like CleanPowerSF also have to pay PG&E’s so-called “exit-fees” when they siphon customers away from the utility. The fees are meant to offset the costs that utilities incurred to purchase energy contracts and for other investments, many of which were inked before programs like CleanPowerSF launched.

“It’s challenging in part because state regulations require us to continue to pay for so much of PG&E’s costs, as well as our own costs,” Hale said. “The savings would definitely be deeper if we didn’t have to pay for costs PG&E is incurring.”

Dominic Fracassa is a San Francisco Chronicle staff writer. Email: dfracassa@sfchronicle.com Twitter: @dominicfracassa