SF May Take Public Power Lead of LA, Burbank

SAN Francisco (KFWB/AP) 11.04.01, 12:30p -- I

t could be the biggest item on any ballot in California this Tuesday, in the range of its impact. Voters in the hometown of the state's largest utility will decide whether to seize Pacific Gas & Electric Co.'s local electricity network and deliver power through a San Francisco public agency.

Like many Californians, San Franciscans endured rolling blackouts earlier this year, and they face the nation's third-highest electric rates.

But cities that already have municipal power, including Los Angeles, Burbank, and Sacramento, largely were spared blackouts and their residents pay as much as 30 percent less than PG&E's customers.

"There is no question that public power gives the consumer a lower utility bill," said Angela Alioto, legal counsel for the Municipal Utility District (MUD Now!) campaign. Advocates say public utilities are more responsive to consumers because they don't have shareholders and corporate-sized paychecks.

PG&E calls the concept flawed, and is spending more than $1 million to defeat the twin propositions I and F. It calls the proposal "too risky," especially after the Sept. 11 attacks. "You're taking on a huge responsibility without any benefit because buying the system doesn't give you any more power, it just changes the ownership," said Jon Kaufman, head of the No on F&I campaign financed by the parent PG&E Corp.

Preventing a public power victory in the city of 777,000 voters could help the utility stop other cities -- including San Jose, San Diego and Davis -- from taking up the public power banner.

The public power campaign's spending has been dwarfed by PG&E's. Alioto and other utility critics say the anti-MUD spending campaign is shameful, since PG&E owes its creditors billions and taxpayers and customers will likely end up paying more when the utility emerges from bankruptcy court reorganization.

The utility is expected to fight in court all efforts to take over its assets using powers of eminent domain. "It's only prudent for any company to fight measures that seek a hostile takeover of your assets," said PG&E spokeswoman Jennifer Ramp.

The ballot has two measures on the public power issue:

* Proposition F would expand the city's utilities commission, which already delivers water, into an agency similar in structure to the Los Angeles Department of Water and Power.

* Measure I would create a new independent agency serving San Francisco and neighboring Brisbane that would be similar to the Sacramento Municipal Utility District.

Both could use eminent domain to buy PG&E's transmission lines, power plants and other infrastructure at market value -- the Board of Equalization values the power delivery system at $750 million. Both would have to issue bonds to pay those expenses and spend millions to buy electricity.

Both also would get electricity generated by the city-controlled Hetch Hetchy dam in the Sierra Nevada, which can produce about a third of the 1,000 megawatts used by San Francisco and Brisbane. Currently, half of that power flows to other cities under long-term contracts that would have to be broken.

All the spending means lower rates won't come immediately, advocates caution. S. David Freeman, the head of California's Public Power Authority who for years ran Los Angeles' MUD, estimated Friday it could take anywhere from two to 10 years. "You will not achieve all the savings the first day," Freeman said.

Whether one or both measures pass, opponents say the agencies will likely sit idle as PG&E debates their legitimacy in court. "If these measure pass, nothing's going to change overnight," Kaufman said. Similar legal battles with PG&E delayed service by Sacramento's MUD for more than 20 years.

The San Francisco Chronicle editorialized against the MUD, agreeing that the change is too risky. But the Sacramento Bee endorsed both measures, urging San Franciscans to follow their lead and vote out PG&E. "Sacramento took control of its electricity destiny," the Bee editorial said.

-- PHO (owennos@bigfoot.com), November 05, 2001