San Francisco Offers $2.5 Billion to Buy PG&E Electricity Infrastructure
SAN FRANCISCO (CBS SF) -- In an effort to create a city-run electric utility in San Francisco, mayor London Breed and city attorney Dennis Herrera issued a statement Sunday outlining an offer to pay $2.5 billion to acquire Pacific Gas and Electric Co. power infrastructure serving the city.
The statement, which the mayor's office labeled "historic," reads:
The City and County of San Francisco has taken an important step toward energy independence by submitting an official offer letter to Pacific Gas and Electric Company (PG&E) of $2.5 billion for the acquisition of electric distribution and transmission assets that serve San Francisco. Following PG&E's bankruptcy protection filing in January, the City began a study to consider the feasibility of purchasing PG&E infrastructure. This marks the culmination of months of hard work from the City and its advisors on that effort.
Our offer to PG&E is the result of detailed financial analysis conducted by industry experts and encompassing an extensive examination into the company's assets in San Francisco. The offer we are putting forth is competitive, fair and equitable. It will offer financial stability for PG&E, while helping the City expand upon our efforts to provide reliable, safe, clean and affordable electricity to the residents and businesses of San Francisco. It also considers equity for PG&E's remaining customers and the City's responsibility for ongoing costs.
We look forward to positive, collaborative discussions with PG&E on this critical issue. Throughout this process we will protect the best interests of our City as we strive toward the independent energy future that San Francisco deserves.
Last November, voters passed Proposition A which authorized San Francisco's public utilities commission to issue bonds to pay for power and electrical facilities without having to obtain voter approval.
If a deal were to be achieved San Francisco would operate California's third-largest city-run electric utility, behind Los Angeles Department of Water and Power and the Sacramento MUD.
State Sen. Jerry Hill (D-San Mateo), a frequent critic of PG&E, was upbeat in an interview with KCBS radio on Sunday.
"We've seen throughout California where cities and municipalities have controlled and owned and operated their utilities that they have a very successful operation and a very safe operation," Hill said.
"San Francisco certainly has a history of having their own public utilities with the Hetch Hetchy (water supply system) and the operation that they've had for many years. So there's an opportunity here."
In a statement, PG&E disagreed with the notion that selling assets to San Francisco would benefit ratepayers or investors.
"We all agree on the importance of continuing to serve the citizens of San Francisco with safe, clean, affordable and reliable energy," the statement read. "PG&E has been a part of San Francisco since the company's founding more than a century ago, and while we don't believe municipalization is in the best interests of our customers and stakeholders, we are committed to working with the City and will remain open to communication on this issue."
