Keeping the lights on - Public power gives San Francisco the juice

By Medea Susan Benjamin

Opinion piece published in San Francisco Chronicle, Nov 1, 2001, Page A - 25 ©2001 San Francisco Chronicle

Well, apply that logic to San Francisco's power system. Right now, our landlord is PG&E, a company that took in $5.1 billion in profits in the past three years and squirreled it away in a newly created and unregulated "parent company." Then, when the utility company ran into debt, it refused to dip into the parent company's funds and instead declared bankruptcy on April 6.

It's a company that provides lousy service and has let its infrastructure go to pot. It's also a company that recently oversaw the state's stiffest rate increase ever -- socking us with the highest rates in the nation after Hawaii.

This is the company that has been spewing pollution from its Hunters Point plant for decades, severely compromising the environment and health of that community, while making no significant investments in renewable energy to replace our reliance on fossil fuels.

But on Nov. 6, we have a chance to move from renters to owners. With Proposition F and Measure I, San Franciscans have a unique opportunity to say good riddance to PG&E and set up a public power system. Why two initiatives? PG&E is bound to try to hold up these efforts in court, as it did after a similar initiative passed in Sacramento in 1923. As a protection, we have two possible roads to public power:

Measure I uses a statewide act to create a Municipal Utility District (MUD) run by an elected five-member board.

Prop. F amends the city charter to convert the city's Public Utility Commission into a Municipal Water and Power Agency (MWPA) run by an elected seven-member board.

If both measures pass, the MUD will take precedence unless it gets tied up in court for more than two years. In that case, the MWPA will deliver public power.

Public power is not a new, untested concept. It exists in more than 2,000 cities across the United States, cities that at some point in their history decided that electricity was too important a resource to be left to the vagaries of the market. Here in California, there are 31 public power entities,

including our state's largest city, Los Angeles, our state capital, Sacramento, as well as Palo Alto, Alameda, Glendale, Anaheim and Pasadena.

To scare away potential voters, PG&E is claiming it will cost taxpayers $3 billion to buy its assets. The state Board of Equalization sets the real cost as closer to $750 million. PG&E also fails to explain that we would finance this with revenue bonds that are repaid with income from electricity bills, not new taxes.

Public power would result in major savings for ratepayers. Historically, U. S. Department of Energy data show, public power is 31 percent cheaper for residential customers than investor-owned power. In Los Angeles, rates are 22 percent lower than PG&E rates; in Sacramento, they're 30 percent lower; in Palo Alto, they're 43 percent lower.

Where do the savings come from? Public power systems can get low-interest bonds and loans, don't pay federal income tax, don't pay shareholder dividends,

and don't shell out hefty salaries for managers. Last year, PG&E had 47 executives earning more than $250,000; public power agencies had, at most, one person at that salary. And PG&E outspent Sacramento's public power agency 16 to 1 for statewide lobbying.

Public power not only saves ratepayers money, it saves energy. Energy efficiency and conservation are by far the fastest and cheapest ways to meet our energy needs. Public utilities are there to serve consumers, not shareholders, so they can make saving energy a priority. Sacramento, for example, fulfilled its entire growth needs in the '90s through energy efficiency. But for PG&E, the more energy it sells, the more it makes for its stockholders.

Under public power, the mix of energy sources will change as well. Power from the Hetch Hetchy water and power system, much of which is presently diverted to Central Valley irrigation districts, could be used to supply up to 40 percent of San Francisco's demand. We will also reduce our dependence on gas-fired plants as we transition to solar and wind power.

So, Nov. 6 presents a once-in-a-lifetime opportunity. If you want power that is affordable, if you want to move from polluting fossil fuels to clean energy, if you want your energy system controlled by elected officials accountable to the public, vote yes on I and F.

Medea Benjamin, founding director of Global Exchange, is a candidate for the Municipal Utility District Board, Ward 4.