San Francisco and PG&E are back, this time with city officials fighting what they believe to be costly changes to the way their infrastructure connects to utility poles and utility lines.
City guides say the changes Pacific Gas and Electric Co. are seeking are far too costly and could force the government to install unnecessary devices, such as meters on street lights, that are not currently available.
The San Francisco Public Utilities Commission estimates that the upgrade cost could exceed $ 1 billion and that PG & E’s monthly electricity bill could ultimately increase by several million dollars.
However, PG&E says it is merely updating certain electricity tariffs and terms of service, and making the way San Francisco is treated more in line with utility industry standards. The company denies the changes would require unnecessary and expensive infrastructure improvements, including meters on street lights.
Still, the dispute before federal energy regulators is fueling renewed cries from some San Francisco leaders to take over PG & E’s local power lines – the city attempted in 2019 and failed.
“The utility is trying to drive the city out of the electricity business by imposing extreme fees and technical requirements,” said City Attorney Dennis Herrera, who recently appointed Mayor of London Breed to head the SFPUC. “This is just one example of the current relationship with PG&E becoming increasingly untenable.”
San Francisco has tens of thousands of street lights, traffic lights, and other small power consumers connected to the PG&E system without a meter. City officials say PG & E’s revisions to wholesale deadlines could require them to add extra meters to each mast, an unnecessary and in some places impractical requirement that, along with other infrastructure work, could cost more than $ 1 billion.
The city is currently buying electricity for many of its residents through a municipal electricity program called CleanPowerSF, which distributes energy through PG & E’s masts and lines. But the city also generates and powers city-owned buildings and infrastructure, including street lights and traffic lights, which would be affected by changes in PG & E’s wholesale prices and terms. City officials fear such links could become PG&E retail accounts as a result of the changes.
“We will not be able to use our own electricity to power the street lights we own,” said Barbara Hale, SFPUC deputy general director for energy companies. “It’s a ridiculous amount of equipment that isn’t needed for safety or reliability. It is just an engineered economic barrier to providing low cost street lighting services. ”
PG&E spokeswoman Jennifer Robison said in an email that the company is putting an end to “the anachronistic concept of unmeasured load service between two utilities.”
“Inadequate service was originally offered to San Francisco as a lodging by PG&E decades ago because San Francisco had no utilities and it was prohibitive to measure very small loads,” said Robison. “Times have changed and it is no longer good practice not to measure loads, which can lead to operational blind spots and administrative challenges.”
However, she said San Francisco doesn’t need to install a meter on every street lamp. Rather, the city will switch to the same type of wholesale tariff as other jurisdictions next year – and it will still be able to power meterless streetlights through CleanPowerSF, Robison said.
Still, San Francisco officials believe the change would be far less beneficial than the current regime. In a statement, the SFPUC said PG&E appeared to have tried to make its wholesale power terms “so uneconomical or physically impracticable that customers will be forced to use PG&E retail services.”
Even if CleanPowerSF provided power to street lights, much of the revenue from the electricity bill would go to PG&E – unlike the current setup, where the city controls that infrastructure and reinvests the bill proceeds back into the system, the SFPUC said.
The dispute began in September when PG&E petitioned the Federal Energy Regulatory Commission to revise the tariffs and terms for the wholesale power distribution services that San Francisco and other public utility customers receive from the company.
In accordance with the regulator’s process, the proposed changes to PG&E took effect immediately, subject to later refunds if regulators override the company. San Francisco and several other major electricity customers have protested the changes in front of the agency, but the issues could take a year or more to resolve, the city says.
PG&E says the changes being sought are the first revisions to wholesale distribution tariffs since 2013. It claims San Francisco and other customers subject to these tariffs have not paid their fair share, forcing other customers including households and businesses that source retail power from PG&E to make up the difference. PG & E’s plan brings wholesale customers in line with current costs and provides a formula for future changes, the company said.
San Francisco officials say one of the major changes could force city facilities to connect to corporate infrastructure at the more expensive primary voltage level, rather than the less expensive secondary voltage level the city now has in more than 2,000 locations.
The change would apply to all new projects when the city connects its equipment to PG & Es, as well as to the existing urban infrastructure when it is upgraded. City officials say primary connections require a lot more electrical equipment compared to secondary connections, which can add hundreds of thousands of dollars in price and take up significantly more space.
Robison, the PG&E spokeswoman, said the move to primary voltage service at all locations was “appropriate for utility-to-utility connections.” San Francisco is one of only two government agencies receiving secondary voltage services from PG&E, and the other, the Western Area Power Administration, has an agreement with the company that allows secondary service to continue through 2024, Robison said.
“I think it’s also important to keep in mind that with the move to primary voltage connections, PG&E is moving towards industry standards followed by utility companies nationwide,” Robison said in her email. “Primary connections improve the safe and reliable operation of any utility’s systems and facilities by making it easier to keep track of equipment ownership and isolating it for emergency repairs and other maintenance and service issues.”
San Francisco has been skeptical of PG & E’s arguments about the abolition of the secondary voltage service, in part because the city believes PG&E did not fully justify the changes and their potentially dramatic effects.
In any event, both Hale and Herrera, the city attorney, said PG & E’s revisions highlight the need for the city to purchase PG & E’s local electrical infrastructure. But it’s a challenging option to pursue. San Francisco made a $ 2.5 billion offer in 2019 to acquire PG & E’s masts and lines that serve the city, but the proposal was immediately rejected by the company, which said its assets in the city were not for sale and the offer is too low anyway. San Francisco renewed its offer last year, again without success.
Herrera said he hoped the PG&E leaders “come back to the table” to discuss a purchase in San Francisco, but noted that the city had other legal options – he said it was premature to discuss them – if this is not the case.
Michael Wara, director of Stanford University’s climate and energy policy program, said the city could try at any time to use its pre-eminent domain powers to force PG&E to sell its local power system. But it would be a costly endeavor that could drag on for a decade, especially if PG&E resisted.
“That would be a huge undertaking,” said Wara. “If the city really wants that, it can. But it’s not a quick process.”
JD Morris is a contributor to the San Francisco Chronicle. Email: [email protected] Twitter: @thejdmorris