Their neighborhood

Their neighborhood

PG&E and its proxies fight public power, here and in the San Joaquin Valley

By Amanda Witherell

Some interesting mail landed in the boxes of Potrero Hill residents last week: flyers with a photograph of industrial stacks spewing plumes of pollution. They read, “Potrero Hill doesn’t need three more power plants in our neighborhood.”

There’s a handy clip-out membership card to join the Close It! Coalition, from which you can “find out more about the city’s rush to judgment and their plan to put more power plants in our neighborhood.” The return address on the card is 77 Beale, which isn’t in “our” neighborhood at all.

It’s the address of the downtown headquarters of Pacific Gas and Electric Co.

The utility, in the guise of a grassroots community organization, is opposing the contract that the San Francisco Public Utilities Commission is currently hammering out with a private company, J-Power USA, to build a new 145-megawatt, natural gas–<\d>fired power plant on a four-acre plot at 25th and Maryland streets. The plant would be owned and operated by J-Power for a period of 10 to 12 years, after which the title would turn over to the city.

This so-called peaker plant, one of three that would run when San Francisco’s power needs exceed the normal load, would be cleaner burning than Mirant’s dirty old Potrero Hill power plant, which city officials and environmentalists want closed. Mirant’s “Reliability Must Run” contract with the California Independent System Operator (Cal-ISO) could be terminated once the three peakers (whose generators the city received years ago through a lawsuit settlement) are built, according to the SFPUC.

Though PG&E, which has a questionable environmental record, claims to be against the peaker plants for pollution reasons, public power advocates say this is really opposition to the city owning its power sources. “PG&E has finally gone over the line. This is a good thing because this is so egregious and so transparent,” said Joe Boss, a Dogpatch resident who received the mailer. “They’ll do all they can do to kill public power in San Francisco.”

Boss and a group of neighborhood activists who support the construction of the peakers have put together their own mailer countering the claims of the Close It! Coalition, which has been dormant lately but was active prior to 2006, when community activists were fighting for the shuttering of PG&E’s Hunters Point power plant.

Other anti–<\d>public power literature also circulated recently in supervisorial district 11, where the California Urban Issues Project sent a flyer urging residents to oppose Community Choice Aggregation, the city’s gradual public power plan that is focused mostly on renewable energy sources. The mailer was apparently sent before the Board of Supervisors voted to approve the plan, which it did in June.

Sup. Ross Mirkarimi, who coauthored the CCA legislation with Sup. Tom Ammiano, called the CUIP flyer “shameful” and told the Guardian, “This is signature PG&E, but it’s not just PG&E. It now very well implicates the [Gavin] Newsom administration either with complicity or silence.” The CUIP board includes Committee on Jobs director Nathan Nayman, small-business advocate and Newsom appointee Jordanna Thigpen, Democratic Party political consultant Rich Schlackman, Golden Gate Restaurant Association executive director Kevin Westlye, and other Newsom supporters.

Newsom signed the CCA legislation but tacked on a letter vaguely expressing concerns about the plan. He recently authored a letter to Cal-ISO expressing his support for the peaker project. While PG&E is opposing peakers here, it has plans under way to build at least two farther south, near communities it is also battling.

The San Joaquin Valley Power Authority has filed a formal complaint against PG&E with the California Public Utilities Commission regarding how the utility is conducting itself as the community moves forward with a plan for public power.

The SJVPA is a group of 11 cities and two counties, representing about 300,000 citizens, that has filed a plan with the CPUC to purchase its power through a CCA plan. Assembly Bill 117, written by Sen. Carole Migden when she was in the State Assembly and made law in 2004, allows communities to act as their own wholesale power customers and purchase electricity for residents.

San Francisco, Marin, Berkeley, Oakland, and Emeryville are working on CCA plans, but the SJVPA is the furthest along. With CCA, power is still transmitted by utility companies, but residents pay their electricity bills to the city. The SJVPA plans to build its own 500 MW power plant — which PG&E also opposes, claiming studies show it isn’t necessary — and has issued a request for proposals from interested companies for 400 MW of renewable energy. It estimates citizens would save about 5 percent with CCA.

But representatives of PG&E have been attending city council meetings in the area and even holding their own informational workshops at which they refute elements of the CCA plan.

In a lengthy memo sent to a Hanford City Council member and very similar in tone and content to one distributed to San Francisco nonprofit organizations a couple of months ago, PG&E offers misleading claims such as “Over 30 percent of PG&E’s supply comes from a diverse portfolio of renewable energy … about 20 percent comes from PG&E’s large hydro system, and approximately 12 percent comes from smaller renewable generation sources.”

But according to state law, a large hydro system does not qualify as a renewable energy source — a rule the utility doesn’t apply to itself but is quick to point out a paragraph later when it attacks the CCA plan for renewable energy.

The SJVPA complaint details several examples of PG&E spokespeople cautioning against the plan in local media and at public meetings. CEO Peter Darbee even penned an editorial for the Fresno Bee in which he wrote, “The fundamental problem with the program is that the numbers don’t add up,” a statement he attempted to clarify with unsourced data showing that rates will go up even if the CCA plan says they won’t. Darbee went on to say that PG&E is just looking out for the best interests of the people.

The Fresno City Council recently voted 4–<\d>3 not to join the SJVPA, a close vote that “was based in large part on PG&E raising questions,” said David Orth, the general manager of the Kings River Conservation District, which is overseeing the implementation of the CCA plan. “That is their intent, frankly — to clutter the discussion and decision-making field with a lot of uncertainties and threats of complexity.”

Fresno would have been the largest consumer of power in the coalition, using 45 percent of its electricity.

Orth said obfuscation has been the utility’s tool, coupled with reassurances that power “is too difficult for you to understand, so accept the status quo.”

He said PG&E hasn’t been entirely factual with its advice and cited a specific example in which PG&E claimed that if a community opted out of CCA after joining, it could be liable for as much as $11 million. “It was a fabricated number, and it was a fabricated scenario, but it lead certain council members to believe there was a risk we weren’t explaining,” Orth said.

Lawyers representing the SJVPA say the utility is using ratepayer funds for its anti-CCA marketing, and that’s a violation of the CPUC’s rules. AB 117 states clearly that utilities should cooperate fully with municipalities enacting CCA plans. In a December 2005 decision seeking to clarify how CCAs will be implemented, the CPUC wrote, “There is little if any benefit from permitting a battle for market share between CCAs and utilities. Of course, we expect utilities to answer questions about their own rates and services and the process by which utilities will cut-over customers to the CCA. However, if they provide [sic] affirmatively contact customers in efforts to retain them or otherwise engage in actively marketing services, they should conduct those activities at shareholder expense. We do not believe utility ratepayers should be forced to support such marketing.”

“SJVPA is informed and believes and thereon alleges that these marketing and related activities were undertaken at PG&E’s ratepayer expense to compete against SJVPA,” the authority’s lawyers wrote in the complaint to the CPUC.

Even if PG&E is drawing from the proper budget for the marketing, the appearance that it isn’t needs to be addressed, and the SJVPA complaint further calls on the CPUC to clarify its rules on what utilities can and can’t do. Local customer representatives, usually salaried by ratepayer funds, are telling folks to stick with PG&E, and that’s a betrayal of trust. “You have someone who’s worked with a customer for years and years and years saying, ‘Don’t support CCA,'<\!q>” Orth said.

PG&E, which has disputed the allegations in the SJVPA complaint, did not return our calls seeking comment. The two parties are currently in mediation, and SJVPA attorney Scott Blaising said the utility has yet to provide solid evidence that ratepayer money isn’t footing the bill for the anti-CCA marketing. Southern California Edison Co., which provides about a quarter of the SJVPA’s current power, has not been as contentious as PG&E, Orth said.

“Theoretically, [anti-CCA marketing] should be covered by shareholders,” said Bill Marcus, an energy consultant who works with the Utility Reform Network. “Realistically, a bunch of it leaks into ratepayer accounts.”

He pointed out that PG&E’s budget allocation for local public affairs has stood at 22 percent over the course of several general rate cases, despite clear peaks in marketing for certain campaigns.

Some San Franciscans will be closely watching what happens next as a sign of things to come as this city moves forward with its CCA plan. As Mirkarimi told us, “What San Joaquin is experiencing is likely a prelude to what San Francisco will be confronting as it pertains to PG&E’s desire to deny CCA and San Francisco’s pursuit of energy independence.”

Migden, who wrote the CCA law, said, “PG&E’s alleged actions controvert the letter and the spirit of the bill. The utility and the SFPUC should take heed, because green public power is the people’s passion.”

Originally published August 15, 2007 in the San Francisco Bay Guardian