San Jose Mayor Proposes Creation of Public Utility in Wake of PG&E's Power Shutoffs

PG&E's Metcalf Transmission Substation near Highway 101 in Coyote, southeast of San Jose. (Craig Miller/KQED)

San Jose Mayor Sam Liccardo says he wants the city to buy PG&E's power lines to create a municipal utility. He announced the proposal on Thursday, in the wake of last week's power shutoffs by PG&E in an effort to reduce the risk of wildfires.

About 60,000 residents in San Jose lost power during the shutoffs, according to Liccardo.

In his proposal, Liccardo said the city simply can't rely on PG&E "to act in our resident's best interest."

The California Senate and PG&E's state regulator are now investigating the shutoffs.

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Liccardo's proposal calls for San Jose to investigate what it would take financially to create a public utility, and what resources are required to run it.

"What I have proposed is that we push harder along those lines, that is to ensure that we have a city with more resilient infrastructure, by taking matters into our own hands," Liccardo said. "We got into this mess through decades of challenges between investor-owned utility and state regulators and it's increasingly apparent to cities like San Jose that we need to step up to fix this. And we can't wait for the state or PG&E to do it for us."

The proposal also calls for the city to invest in microgrids, self-contained electrical systems that will allow neighborhoods to continue to have electricity even if the larger power grid shuts off. Liccardo also suggests that the city invest in programs that would enable low-income residents to buy solar panels and other electric storage equipment.

Liccardo wants to poll residents this fall on whether there is interest from the public to buy local PG&E power lines and create a public utility. The poll would also ask if voters are willing to approve a bond measure to finance the effort.

The proposal also urges state support for the city supplementing PG&E inspection teams in an event that more power shutoffs take place in the future.

Liccardo said if the company won't accept help, the state should mandate it to accept local assistance.

"I'm urging that the state recognize the role of local communities in providing solutions to this crisis that we all face together," he said.

Liccardo essentially said he believes the city is better equipped to provide power for its residents.

"We think there are inherent advantages we have, not to mention the fact that we think we have a unique and special interest in safety in our community, that an investor-owned utility that has responsibility for many communities and responsibilities to shareholders may not have inherent risks," he said.

PG&E released the following statement in response to news of Liccardo's proposal: "We have not seen the proposal. However, our San Jose-based facilities are not for sale, and to do so would not be consistent with our charter to operate or our mission to serve Northern and Central California communities."

San Jose is among a slew of cities looking to take more local control over electric services and become less dependent on PG&E for energy. San Francisco offered the utility $2.5 billion to buy local infrastructure, but PG&E rejected it, saying the offer was too low.

San Francisco Mayor London Breed said PG&E's rejection won't deter the city.

"We're not gonna give up," Breed said Thursday. "We're gonna continue to have discussions and look at moving forward and seeing if they're open to additional negotiations. We don't want to give up on this because we want to make sure that our residents have a reliable, clean power system and that the distributor of that power is such that we can depend on them making good decisions, and we're gonna continue to try to work with them on that."

KQED's Peter Jon Shuler and Kate Wolffe contributed to this report.

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