Public power refers to electricity service provided by a not-for-profit, publicly owned utility. Public power utilities are typically community-owned providers of electric service that manage both power supply and delivery services. For over 150 years, local communities have exercised their right to own and operate public power utilities. Most public power utilities are owned by cities and towns, but many are owned by counties, public utility districts, and even states.

Today, the United States has more than 2,000 publicly owned utilities, which serve about 1 in 7 electricity customers. Public power utilities provide electricity to more than 49 million people and 2.6 million businesses and directly employ 96,000 people in the United States.

California alone has more than 45 public power utilities serving cities like Los Angeles, Sacramento, Palo Alto, Alameda, Redding, and Riverside. These not-for-profit, community-owned electric utilities currently power about 25% of California’s electricity needs.

Since publicly owned utilities are governed by locally elected officials, they are accountable to the community and are meant to reflect the decisions and values of their residents. Across the country, customers of public power utilities pay lower rates and experience better reliability on average than those of private utilities. In fact, in 2020, the most expensive publicly-owned utility within PG&E’s service territory provided service at an average rate that was 20% lower than PG&E’s average rate.

In San Francisco, there are currently two full-service electric utilities: Hetch Hetchy Power and Pacific Gas & Electric (PG&E). Hetch Hetchy Power is a publicly owned utility operated by the San Francisco Public Utilities Commission (SFPUC), a City department that also manages CleanPowerSF and provides water and sewer services across San Francisco. PG&E is a for-profit utility beholden to Wall Street investors.

Hetch Hetchy Power has been providing greenhouse gas-free public power to City services for over 100 years. This includes supplying and delivering power to essential services such as the airport, public hospitals, police stations, firehouses, schools, and the Muni public transit system. In 2020, Hetch Hetchy Power was California’s 14th largest publicly owned utility in California and is comparable in size to the publicly owned utilities that serve the Cities of Palo Alto and Pasadena.

The City of San Francisco also provides public power through a second program: CleanPowerSF. CleanPowerSF is a community choice aggregation (CCA) program that purchases clean, renewable electricity on behalf of its customers, but PG&E continues to be responsible for transmission, distribution, and collecting payment. CleanPowerSF currently serves more than 385,000 customer accounts in San Francisco, all of whom have chosen CleanPowerSF’s electricity supplies over PG&E’s supply options. Together, the SFPUC’s clean power programs, Hetch Hetchy Power and CleanPowerSF, provide more than 75% of the electricity consumed in San Francisco. The remaining 25% of electricity consumed in the City is provided by either PG&E or private marketers that serve commercial and industrial customers.

If the City expanded its public power service to meet all of San Francisco’s electricity needs, it would be the third largest publicly owned electric utility in California, behind LADWP serving Los Angeles and SMUD serving Sacramento.

In early 2019, Mayor London Breed directed the San Francisco Public Utilities Commission (SFPUC) to prepare a preliminary report on electric service options for the City to ensure that San Francisco residents and businesses receive safe, reliable, affordable, and sustainable power. In May 2019, the SFPUC issued a Preliminary Public Power Options Report which found that public ownership of PG&E’s grid in San Francisco would create durable and long-term cost savings and ensure electric service reliability and affordability. Public power expansion would also allow for timely and cost-efficient modernization of San Francisco’s electric grid, which would enable the efficient deployment of cost-effective local electricity sources and storage technologies and help the City electrify more energy uses to reduce reliance on fossil fuels.

After issuing the Public Power Options Report and conducting a financial feasibility analysis, the City made a $2.5 billion offer to PG&E to own and operate the electricity grid in September 2019. The City reiterated the same offer in August 2020.

PG&E rejected San Francisco’s fair offer both times, claiming that the offer is substantially below what PG&E believes to be the fair market value of its grid assets in San Francisco. However, PG&E has not provided any analysis or other evidence to support its claim that San Francisco’s offer is too low, nor is PG&E willing to offer or negotiate a higher value.

In July 2021, the City of San Francisco submitted a valuation petition to the California Public Utilities Commission (CPUC), the state utility regulator. The petition initiates a CPUC proceeding to establish a fair and impartial value for PG&E’s electric assets that serve San Francisco. This proceeding enables transparency, fact-finding and information sharing amongst PG&E, San Francisco, and other stakeholders, and moves the conversation forward to bring the parties together.

With unified support among the City’s policymakers, including Mayor London Breed and the Board of Supervisors, now is the time for public power expansion in San Francisco.

PG&E is the monopoly middleman between San Francisco’s electricity supplies and San Francisco’s management and use of those supplies. This is true for every streetlight, resident, business, and all other activities in San Francisco that rely on electricity to function. All electricity supplies that flow into San Francisco, all of San Francisco’s electricity needs, and all of San Francisco’s local energy storage and resources must, at some point, interconnect with each other, and today, that requires using, relying on, and paying for PG&E’s grid assets in San Francisco.

PG&E has used its position as the monopoly grid owner to frustrate, delay, and increase costs for both Hetch Hetchy Power and CleanPowerSF. For decades now, PG&E has obstructed public power projects in San Francisco. The corporate giant has a long history of throwing up costly roadblocks and charging exorbitant fees for basic power hookups, blocking everything from affordable housing to new public transit projects in San Francisco.

PG&E continues to demand huge payments on routine power grid connections. For example, the cost to comply with PG&E’s latest requirements for the City to use public power to connect streetlights, traffic signals and other small loads would exceed $1 billion. These requirements are being considered by the Federal Energy Regulatory Commission (FERC) in Washington D.C., which is generally unconcerned with the specific needs and interests of San Francisco electric customers.

The SFPUC regularly reports on these ongoing disputes in quarterly reports to our Commission and the Board of Supervisors. They can be found here. San Francisco spends extensive time and resources to dispute these actions with PG&E and its regulator, FERC.

We have known for a long time that full public power is the best option for San Francisco, especially as PG&E’s problems have grown. But today, we have reached the point where pursuing full public power in San Francisco is our only option to ensure that all of our residents, businesses, and municipal operations receive safe, reliable, affordable, and sustainable electric service today and for the decades to come.

San Francisco has been providing clean, reliable hydropower from our Hetch Hetchy Water & Power System for over 100 years. Today, the San Francisco Public Utilities Commission, through both its Hetch Hetchy publicly-owned utility and CleanPowerSF, is providing more than 70% of the electricity consumed in the city, providing full supply and delivery service to customers like San Francisco International Airport, the San Francisco Zoo, the San Francisco Library, Muni, City College, public schools, and San Francisco General Hospital.

The City of San Francisco’s successful history as a public power provider is in stark contrast to PG&E’s long record of safety failures, bankruptcies, and sky-rocketing rates. Without a profit incentive or shareholders to set priorities, electric service provided directly by the City of San Francisco would also be more transparent and accountable to customers. Local officials would set rates and provide policy direction through a public process, and community needs would dictate how customer funds are reinvested back into the local electric system to ensure reliable, affordable power delivery and to take advantage of grid-dependent innovations that move the city closer to its climate goals. Innovations that allow for distributed generation, robust vehicle charging infrastructure, smart grid technologies, energy resilience and decarbonization will be considered through a public, transparent process without the obstruction and added costs caused by PG&E’s control of the grid and for-profit business structure.

We believe that public power can deliver electricity at a lower cost than PG&E does. Currently, the City’s publicly owned utility, Hetch Hetchy Power, offers rates that are lower than PG&E’s. San Francisco also has one of the strongest credit ratings of any municipality in the country, and we do not have to pay taxes like PG&E. The City’s costs are also lower because the profit motive, which includes return on shareholder investment, is eliminated. We are not beholden to Wall Street investors, and we do not have to pay outsized executive salaries and bonuses. For example, PG&E’s CEO earned over $50 million in 2021. For a publicly owned utility, that’s money that could instead be reinvested into the system or returned to ratepayers in the form of lower rates. While PG&E has emerged from its latest bankruptcy, it faces billions in debt and, as usual, is looking to its customers, including San Franciscans, for the money it needs to repay its bond holders and shareholders.

Once the City acquires PG&E’s power grid in San Francisco, it will manage its electric system better and will reinvest the revenues received from its customers back into San Francisco’s electric system — to make it safer, more resilient, more reliable, and more affordable for the public, rather than ensuring shareholder profits.

The City’s expanded publicly owned utility will be able to direct the investment of ratepayer dollars in a way that reflects the goals, values, and needs of the local community. Our grid investments and program offerings will be determined locally and implemented without the profit motive and shareholder interest goals of a for-profit corporation like PG&E.

On average, public power is more affordable, in part due to the lack of private shareholder payments, profits, corporate salaries, or bonuses. Publicly owned utilities have lower financing costs due to their ability to issue low cost, and in many cases, tax-exempt, bonds to fund long-term repair, replacement, and upgrade needs.

The costs of acquiring PG&E’s electric grid in San Francisco would be paid back using revenues earned from delivering power to San Francisco customers and would not take away from City priorities like affordable housing and homeless services. The City would use low-cost, municipal bonds to raise the money needed to acquire PG&E’s local system. San Francisco will only raise that money if it acquires PG&E’s grid, and the money can only be used for that purpose.

Public power in San Francisco will also be cleaner and more climate friendly in line with San Francisco values. Without being hampered by PG&E, San Francisco will have a clearer and quicker path to achieving our aggressive climate action goals. Public power is also typically safer and more reliable. The City routinely makes substantial investments in its utilities and those investments have proven to be well-built, reliable, and have stood the test of time.

Finally, public power is a good deal for all PG&E ratepayers across California. PG&E is struggling with a huge debt load and is already trying to pass that cost on to ratepayers, as it must focus on strengthening and hardening its distribution grid in wildfire-prone areas. The City’s purchase of the delivery system in San Francisco will enable PG&E to meet its obligations, reduce its debt, and be better positioned to improve service to its 5 million electric ratepayers PG&E will continue to serve.

Yes! San Francisco has set aggressive climate action goals, while PG&E’s obstruction and delays will continue to have a real environmental cost to our city. Without PG&E in the middle, San Francisco has a much clearer path to achieving net-zero carbon emissions. The energy provided by the City’s Hetch Hetchy Power system is already carbon emissions-free. And San Francisco’s CleanPowerSF program has proven our commitment to providing renewable energy while still keeping rates competitive.

Once San Francisco owns and operates its own power grid, it will have much more control over managing its system and can develop ways to make it cleaner, greener, safer, and more affordable. We will be able to modernize our electricity systems and achieve higher levels of sustainability with greater electrification of transportation systems, building decarbonization, and reduction of natural gas use.

No. We have heard the concerns that San Francisco moving to public power would somehow harm PG&E’s remaining customers or delay payments to fire victims. Contrary to this, the cash from the City could be used by PG&E to compensate fire victims more quickly and to help PG&E refocus on the balance of its system outside of San Francisco — where most of its customers live. Some of the cash could even potentially reduce rates for PG&E’s remaining customers.

Local public power in San Francisco is entirely consistent with PG&E’s ability to succeed as a reliable, regional utility that serves most of the rest of Northern California. For decades, PG&E has served its customers with many smaller publicly owned utilities operating throughout its vast service territory. With San Francisco focused on our local power grid and making improvements to modernize and provide safe, affordable, and reliable power, PG&E could better focus on its service to the rest of Northern California and its provision of long-distance electricity transmission.

San Francisco is only a tiny part — about 5 percent — of PG&E’s service territory. PG&E will see only a modest reduction in revenues, and will also benefit from cost reductions due to its reduced service obligations. San Francisco will continue to be a customer of PG&E’s transmission service and will continue to pay its fair share of wildfire mitigation costs. In addition, public power for San Francisco means reductions in PG&E’s service obligations. Thus PG&E will no longer have any costs related to the upkeep — and future capital needs — of San Francisco’s aging electric grid.

Finally, the California Public Utilities Commission (CPUC) has the responsibility and authority to ensure that PG&E’s remaining ratepayers are not materially harmed by an asset purchase. The City’s offer is good for San Francisco, good for wildfire victims, good for PG&E’s remaining customers, and good for PG&E.

San Francisco views its original offer of $2.5 billion as an attractive one for PG&E. It is likely higher than what any other buyer would be willing to pay, with real, immediate value for PG&E’s shareholders. The $2.5 billion offer was developed over nine months of extensive technical and financial analysis conducted by City experts and outside advisers, including specialists in asset appraisal, financial feasibility, and engineering. San Francisco would welcome an open dialogue with PG&E to better understand PG&E’s claims that San Francisco’s offer is “too low.”

The money for acquiring PG&E’s assets will not come from San Francisco’s General Fund, which pays for things like police, parks, affordable housing, and homeless services. Instead, it would come from revenue bonds that would be paid back using the revenue the City would earn through its delivery of power to all of San Francisco’s electricity users (who in becoming customers of the City, would then pay their electric bills to the City, rather than to PG&E). The revenue bond money will only be available if and when San Francisco acquires our local power grid, and that money can’t be spent on anything else. It is a false choice to suggest this money would be better spent on a different City priority.

San Francisco has looked at all the relevant costs, including financing the purchase price and up-front transition costs, and covering maintenance, repairs, and modernization needs of San Francisco’s grid over time. City leadership is confident the new revenues generated will be more than adequate to cover all of these costs, both when San Francisco’s new services begin, and for the decades that follow.

San Francisco has a strong proven track record of treating workers fairly, hiring locally, and providing competitive benefits. For example, to operate the City’s current power, sewer and water services, the San Francisco Public Utilities Commission (SFPUC) employs over 2,500 highly skilled union employees.

To manage the local grid, the City will need to grow its workforce, creating opportunities for current PG&E employees. Competitive compensation packages and benefits will be offered, in stable union jobs — just like PG&E and other utility workers have now. PG&E workers can also have confidence in San Francisco as a strong, reliable employer — one that has provided electricity and other public services for more than a century without ever going bankrupt. It’s also important to note that San Francisco is only about 5 percent of PG&E’s service area, and that not all employees who work on the local grid are specific to San Francisco. Our power facilities stretch all the way to the Sierra Nevada, and so does our workforce.

Yes, and San Francisco is united like never before. Nearly 70 percent of San Franciscans said in a public poll that they favored shifting from PG&E to public power — citing more affordable rates, increased accountability, cleaner energy, better service, and the success of the City’s existing public power programs. The Mayor, the Board of Supervisors, clean power and community advocates, power experts, and the environmental community have come out in strong support for public power expansion in San Francisco.

This effort is a natural progression and growth of the City controlling its clean energy future and being able to achieve its climate action goals. That process started in 1918 when the City started generating clean power from the Hetch Hetchy Power System.

The establishment of CleanPowerSF was a recent major step taken by San Francisco to have more control over its electricity supply and carbon footprint, but CleanPowerSF must rely on PG&E’s grid and is limited by the for-profit, monopoly mindset that limits innovation, customer programs, and the ability to reduce rates. If the City acquired PG&E’s assets, the CleanPowerSF program would bring its innovative spirit and commitment to sustainable energy to San Francisco’s publicly owned utility. As a result, we will not only be able to continue to source cleaner energy, but we will also be able to manage how those supplies work together and alongside local energy resources, energy storage solutions, and the growing need to electrify transportation and building energy uses that today rely on fossil fuels.

By owning the grid as well as making our own supply decisions and determinations, we as the City would be able to do more innovative things to ensure that modernization of our grid and our future electricity supplies – whether sourced from within or outside of San Francisco -- will complement each other to accelerate achievement of our climate goals (see related FAQ #5). For example, the City would be able to work directly with non-profit housing providers to provide 100% renewable electricity to newly developed affordable housing sites and would not be stymied by PG&E disputes that cause delays and add additional and unnecessary costs to housing projects and other critical City services.

The City has a long-standing commitment to and history of providing workforce protections and workforce development opportunities, as seen by its project labor agreements, local hire policies, and the more than 30 employee agreements the City has with various labor unions.

In acquiring PG&E’s assets, the City would continue, and likely expand, workforce development and training programs to ensure that operations and infrastructure projects continue to provide equitable career pathways and opportunities for growth.

Both the City and the San Francisco Public Utilities Commission (SFPUC) are strongly committed to racial and social equity. Expanding our electric services within San Francisco will allow us to deepen and strengthen our ability to deliver on our racial and social equity commitments.

In 2009, the SFPUC initiated new policies to address racial and social equity in its operations. In 2019, the City created the Office of Racial Equity to guide City departments with implementing their own Racial Equity Action Plans.

To address energy equity and environmental pollution, City leaders worked with state agencies, paid for expert analyses, and developed action plans that made it possible to close the Hunters Point Power Plant in 2006 and the Potrero Power Plant in 2011 – two major environmental justice victories for communities of color.

Our expanded publicly owned utility will be governed by the same policies adopted by the Board of Supervisors and our Commission. We will continue to strive to meet our commitments and policies, and as an owner of the grid, we will be a local partner that leads with our values of equity and environmental justice when serving our customers and community.

Yes. The San Francisco Planning Department is currently conducting a public process for environmental review of the City’s potential acquisition of PG&E’s assets under the California Environmental Quality Act (CEQA). The purchase and sale transaction is the project under review. The physical changes associated with the project (e.g., physical separation of San Francisco’s purchased assets from PG&E's electric grid outside of San Francisco) will be identified and studied for CEQA.

The purchase of PG&E’s electric grid would include essentially all of PG&E’s electric transmission and distribution assets located within the City and County of San Francisco. As part of the transfer of assets, certain PG&E facilities outside of San Francisco’s boundaries will need to be physically separated from the facilities that will be owned by the City. The portion of the project requiring new construction or modifications to existing facilities (whether they be PG&E-owned or City-owned) would primarily be in the southern portion of San Francisco and along the San Francisco-San Mateo County border (including the northern portions of Brisbane and Daly City).

In order for the City to execute purchase of the grid, the Board of Supervisors would formally vote to adopt the findings of the environmental review, and from there, approve relevant transactions.

The overall timeline for San Francisco to complete the purchase of PG&E’s grid assets in San Francisco depends on several factors. The City would prefer to negotiate with PG&E as a willing seller, as was the intent when the Mayor initially sent PG&E our indication of interest to purchase PG&E’s electric assets. PG&E could “come to the table” prior to completion of the current valuation proceeding at the California Public Utilities Commission that will determine a fair price for PG&E’s assets. That proceeding is expected to move forward in mid-2022 and last until early 2024. Concurrently, the City is reviewing the potential transaction for compliance with the California Environmental Quality Act (CEQA), a process that is expected to continue until late 2023, but could last longer. Environmental review must be complete before the Board of Supervisors can approve a transaction and issue revenue bonds to complete the purchase.

If PG&E chooses to negotiate with the City during or upon completion of the valuation proceedings, those negotiations could take place over several months, but could last longer. Before any transactions between parties can be executed, the CPUC and Federal Energy Regulatory Commission (FERC) approvals would be needed. Construction to separate the San Francisco electric grid from PG&E’s would not commence until the approvals required are secured, and could take one to two years (or more). In parallel, there would likely be a multi-year period of transition while PG&E transitions full control of the grid in San Francisco to the City.

Various approvals from local, state, and federal agencies will be required to execute a transaction with PG&E, as well as to comply with policies and regulations meant to limit the environmental impact of a transition to City ownership of the local electric grid.

The CPUC will need to find that the City’s purchase it is “in the public interest” for the purchase to take place. The CPUC may also need to determine that utility workers impacted by the transfer of ownership are adequately protected. Further, the Federal Energy Regulatory Commission (FERC) would need to approve the change in ownership of electric transmission assets. At the local level, approval by the SFPUC Commission and the Board of Supervisors will be required; each will need to approve the transaction and adopt the findings of the City’s review of the transaction under the California Environmental Quality Act, and the Board will need to approve the issuance of revenue bonds to finance the purchase of PG&E’s assets.

The City’s current review of the environmental impacts associated with the transaction considers future construction, operations, and maintenance of the proposed project, including the physical separation from PG&E’s electric system that would take place along the southern border of San Francisco.