Desi Valdez [00:00:40] Haven’t been able to do anything I needed to do. So I’ve just been sitting around in the dark, trying to find motivation, but it’s hard when there’s nothing to turn on.
Alan Montecillo [00:00:51] San Francisco residents, especially on the city’s west side, are furious with PG&E. And all this chaos has some people wondering whether it’s time for the city to go even further and take over the investor-owned utility.
Scott Wiener [00:01:07] It’s time for us to move forward, for San Francisco to be able to break away from PG&E to form our own public utility. We’ve got to get this done.
Alan Montecillo [00:01:17] Today, what it would take for San Francisco to break up with PG&E.
Laura Klivans [00:01:26] On December 20th, there was a fire at a substation, like a power substation PG&E in Soma, Mission and Eighth Streets, which led to power outages for roughly a third of San Francisco customers.
Alan Montecillo [00:01:42] Laura Klivans is a climate reporter for KQED.
Laura Klivans [00:01:47] The neighborhoods that were most affected were Richmond, sort of the west side, Presidio, parts of the sunset. We even saw some of the Fillmore, some of Hayes Valley, some parts of downtown. For different people, it lasted for different time periods. So if you talk to somebody in the Richmond, they really got it the worst. They got it for sustained periods of time, some up to two or three days, and then multiple outages.
Alan Montecillo [00:02:15] I remember that first one that lasted for some residents 48 hours maybe, and there were several more after that, right?
Laura Klivans [00:02:23] Yeah, there were several others after that, not lasting as long. PG&E attempted to fix and restore power. They put in these diesel generators in the Richmond district, which were extremely loud and residents didn’t like those either. And then the impacts on people were significant. A lot of people lost the stuff in their fridge. There was all sorts of regular nuisances. And for businesses too, it was a holiday week, a lot of people were going out to restaurants and stuff and they were losing all their produce or fish or whatever it might be. PG&E has offered to give people money for this stuff, 200 bucks for residents on your credit on your next bill and 2,500 for businesses and you could apply for even more. But for some people, it’s more than just like a nuisance and an inconvenience.
Kai Spencer-Martin [00:03:15] I’m in a wheelchair. I’m gonna power wheelchair. I wouldn’t be able to charge my chair. I wouldn’t be able get out of my building or into my building.
Laura Klivans [00:03:24] I talked to San Francisco residents, including Kai Spencer Martin, about this latest power loss.
Kai Spencer-Martin [00:03:29] If the power went out, I wouldn’t be able to go out and buy new groceries because my groceries went bad. We’d go hungry. My family. And it’s not just me. It’s me, my husband, my teenage son.
Laura Klivans [00:03:40] Luckily, she said the lights all around her building went out and hers didn’t. And she found out later that they have a backup generator in her building. So she was really lucky. But she’s an example of like how it’s more than just an inconvenience, right? Like it’s just more than eating a weird meal and trying to keep your fridge closed. She also has medications that need to be refrigerated, uses a nebulizer for asthma, and her husband uses a CPAP machine for sleeping.
Kai Spencer-Martin [00:04:08] I have other friends that have disabilities that live in some of the downtown SROs that were out of power, um, for days, some of them just went hungry.
Alan Montecillo [00:04:25] How much anger were you seeing, and are still seeing, as a result of this power outage and the ones that came after?
Laura Klivans [00:04:34] Yeah, I mean, I think many people are familiar with how people already feel about PG&E. And if you look at like any Reddit forum about this power outage, it’s just like full of livid people, understandably, and people saying, how is this our one choice? People are upset for how much they’re paying for this power that isn’t very reliable. And all of this anger has led for calls for the city to take over PG&e.
Scott Wiener [00:05:07] PG&E is too large. It’s not adequately maintaining its infrastructure as we saw this weekend yet again with the substation that caught on fire.
Laura Klivans [00:05:17] State Senator Scott Wiener, he has just recently in the last few days introduced legislation that would make it easier for cities to break away from PG&E.
Scott Wiener [00:05:29] When giant corporations put profits over the public interest, it is time for us to act.
Laura Klivans [00:05:36] And then we have other local officials supporting it, like San Francisco Supervisor Matt Dorsey. Why is that the solution that many people are thinking about now? Because PG&E is an investor-owned utility, which means it is motivated by profit in part, because they have investors and they need to offer them a return to make it worth them investing in the company. If PG&e were public, it would not have that motivation.
Alan Montecillo [00:06:03] Is the idea that a takeover would lead to cheaper and better?
Laura Klivans [00:06:11] That’s the idea, yeah. So if you look at some other examples, there are some places that have public power and they are paying way lower rates than people who have PG&E. And also, by having local control, you have more control of the grid that’s in front of you and the priorities in your smaller area.
Alan Montecillo [00:06:33] So how does this happen exactly? Can San Francisco just make PG&E an offer? I mean, is PG&e even for sale in San Francisco or anywhere?
Laura Klivans [00:06:42] PG&E is not for sale, and they are not interested in selling all their infrastructure in San Francisco, but through a process called eminent domain, it could be possible. And what this would mean would be that San Francisco, it’s within their purview to take private property for public use as long as it pays fair compensation. So it would mean buying the part of the grid that PG&E owns and also paying for the cost of separating that out. We would need to have regulators involved. The California Public Utilities Commission would be involved. This would likely involve a variety of lawsuits because PG&E isn’t interested in this, we’d also need some sort of environmental review. If this all happened and the city and county of San Francisco was able to take over all of these poles and wires that currently belong to PG&E, then you need to staff the organization and run the organization. And I don’t know, who knows how to do that? Former PG&e workers. Maybe you find a whole bunch of new people. There’s just a lot that goes into this.
Alan Montecillo [00:08:05] When Sacramento took over its utility and lessons for the rest of us. That’s coming up after the break. Are there examples of other California cities doing this that we can point to? That would be instructive here.
Laura Klivans [00:08:30] So, in 1923, Sacramento residents were really fed up with PG&E. They were fed up high rates and poor service, does that sound familiar? So they voted overwhelmingly, 87%, to establish what is called SMUD, the Sacramento Municipal Utility District, which is a public utility.
Mohit Chhabra [00:08:53] In 1923, Sacramento residents voted to establish SMUD, and voters finally approved a $12 million bond to do that in 1934.
Laura Klivans [00:09:05] So I spoke to Mohit Chhabra. He’s an analyst at the Natural Resources Defense Council. He focuses on energy and economics and climate about how this played out in Sacramento.
Mohit Chhabra [00:09:16] And then it took them 23 years after that to start serving customers as SMUD. Because there were legal battles. PG&E challenged Sacramento’s eminent domain claim in state and federal courts. And you have to figure out exactly how much you need to pay to buy them out and so on. And it took 23 years.
Laura Klivans [00:09:40] There were operational challenges. SMUD inherited aging infrastructure, poorly maintained infrastructure. They had trouble recruiting workers. They actually had their prices increase around the 70s and 80s. And then now, here we are today, and SMUD is actually doing very well. Their prices are way cheaper than PG&E’s. People seem more happy with it, but it’s taken quite some time.
Mohit Chhabra [00:10:12] Are the gains from owning the utility public, worth the amount of money, time and effort that San Francisco would spend to buy out a section of PG&E and start running its own public utility? That’s the key question.
Alan Montecillo [00:10:38] I mean, I can’t imagine if you’re PG&E right now and you’re seeing all of this anger towards you and you are seeing talk of taking over, buying out your infrastructure in San Francisco. I can imagine they’re thrilled about the idea of this. What has PG&e said about this?
Laura Klivans [00:10:55] Right. So I reached out to PG&E. They provided me with a statement. You know, they don’t intend to give away or sell their infrastructure in San Francisco. They want to continue to serve San Francisco They also bring up that San Francisco offered to buy PG&Es electric grid in San Francisco in 2019. But that is still in process. And they have said that San Francisco has failed to sort of provide a bunch of things that. Are needed to move forward with that process.
Alan Montecillo [00:11:28] So we’ve established that taking over PG&E would be very expensive. It would take a lot of time. Um, but if San Francisco was able to do this, what could that mean for the rest of the state?
Laura Klivans [00:11:41] There could be a lot of impacts on our neighbors. So for one, if San Francisco opts out of PG&E, prices for the rest of Californians will likely increase. And that’s because some of the more expensive parts of the system and what we’re spending on right now is protecting against wildfires, paying for past wildfires protecting against future ones. And those areas that we need to work on are in more fire prone areas, that’s not San Francisco.
Mohit Chhabra [00:12:12] Someone needs to pay for the shared part of the grid. If different parts of the state start doing that, and it’s likely going to be the wealthier cities, it’s the less wealthy cities that are left footing the bill for the grid
Laura Klivans [00:12:26] This is something Mohit Chhabra has thought a lot about.
Mohit Chhabra [00:12:29] The wealthiest cities can buy themselves out. They have the densest grid. They stand to gain the most.
Laura Klivans [00:12:38] We’d also be removing this source of income for these programs that help offset the cost of PG&E. So about 30% of PG and E customers get reduced bills through programs like one’s called CARE. But that comes from subsidization from everybody paying in. And so if you’re taking off like a wealthier city, then again, those costs are gonna be distributed throughout the rest of the customers that aren’t part of that public power.
Alan Montecillo [00:13:14] All this said, Laura, the argument, right, is that if we take over PG&E, we can have more affordable power, more reliable power that isn’t beholden to increasing profits for investors. Do we know whether public power is better?
Laura Klivans [00:13:28] So it’s really a mixed bag. It’s like, if you look at SMUD, it’s like works really well. And then if you at Puerto Rico, it hasn’t worked really well, so it just, it depends on implementation.
Alan Montecillo [00:13:43] Whether or not San Francisco or even the state of California can take over PG&E, there is this public anger, like now. So where does this, you know, public pressure, where does this anger go in the meantime?
Laura Klivans [00:14:00] Yeah. So this anger, you know, even if it doesn’t lead to a public power takeover and, you know, San Francisco power or whatever we would call it, it can go somewhere. This all this public pressure and this intensified scrutiny on the power grid in places where we don’t have wildfire could actually be useful.
Mark Toney [00:14:19] Maybe it will take a credible campaign to wake up PG&E to what they need to do.
Laura Klivans [00:14:29] I spoke to Mark Toney, he’s the executive director of the Utility Reform Network. And while his organization doesn’t take a position on local campaigns to create public power entities and believes, you know, communities, this is in your purview to do, he brought up the point that it could increase accountability for PG&E.
Mark Toney [00:14:50] I don’t want to discourage this campaign, public power campaign, and I’ll tell you why. Because if there is a real threat that they may lose the franchise, maybe that will provide the motivation to do a better job, to bring the rates down, to increase the of their facilities.
