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San Francisco offers PG&E $2.5 billion infrastructure buyout

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Mayor London Breed wants to push for independence from utility company

A massive corner substation building, a low, gray cement building behind a black fence.
The PG&E substation in Mid-Market.
Photo by Beyond My Ken

San Francisco has offered to buy $2.5 billion worth of electrical equipment from Pacific Gas and Electric Company (PG&E), a crucial step in an evolving plan to yank control of power distribution from the bankrupt utility in favor of a city-controlled municipal power company.

In a joint statement signed by both Mayor London Breed and City Attorney Dennis Herrera, the pair framed the bid as a sort of amicable divorce.

“The offer we are putting forth is competitive, fair, and equitable,” said Breed and Herrera. “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.”

In response, the San Francisco Chronicle quotes PG&E spokesperson Andy Castagnola saying, “We don’t believe municipalization is in the best interests of our customers and stakeholders, [but] we are committed to working with the city and will remain open to communication on this issue.”

Presumably, PG&E isn’t interested in losing hundreds of thousands of electricity customers in its hometown.

But the company is going through bankruptcy and facing the possibility of owing billions over its hand in starting devastating California wildfires, so the offered sum might start to look attractive.

In April, Breed touted a city-commissioned poll showing that 68 percent of voters favored the SF Public Utilities Commission over PG&E as a utility, out of 435 people surveyed.

SFPUC claims that within a few years, it will already provide 80 percent of the city’s electricity; it currently relies on PG&E-owned assets for delivery.

According to a “local capacity substation list” from 2018, PG&E has 36 substations providing power to San Francisco, although some of these are located on the peninsula rather than in the city itself.