Nathan Nayman
2007-05-23 10:00:00.0
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SAN FRANCISCO -

In November 2001 and again in November 2002, San Francisco voters said no to public power. Voters said the role of their government is not to provide electricity but to provide good roads, public transportation and public safety.

Has that stopped a small group of zealots who have tried in every way possible to move forward with an agenda that is not shared with the majority of San Franciscans?

If you know anything about San Francisco, you can guess the right answer.

That’s right, the Board of Supervisors will shortly be voting on a municipalized power plan — Community Choice Aggregation. Community Choice Aggregation is a new program that allows cities, counties (or cities and counties acting jointly) to become the “default” electric energy providers for residents and businesses within their boundaries.

This new entity is being hidden within the San Francisco Public Utilities Commission. You know the SFPUC — they’re supposed to be repairing the water system. In November 2002, the voters gave the SFPUC $1.6 billion in revenue bond funding, as a down payment on a $3.6 billion capital improvement program, to protect San Francisco’s water system. We’re still waiting for results, as costs mount and deadlines slip. But instead of focusing on their core mission, the SFPUC is now interested in launching CCA and the Board of Supervisors is interested in letting them do it. Welcome to “Public Power: The Sequel.”

This time, you, the voters will not get a chance to weigh in on whether The City should get into a business they know little about while using your money. This time, if the SFPUC and its allies on the Board of Supervisors get their way, you will be migrated to the SFPUC automatically.

The proposed CCA plan announced by Supervisors Mirkarimi and Ammiano appears to be only slightly revised from the version presented over two years ago, which has languished largely because it is unworkable and poses huge risks to customers, taxpayers and The City. The City will be committing to multibillion-dollar energy contracts that call for issuing revenue bonds without voter approval. These include the very real dangers of higher rates, reduced reliability and multibillion-dollar threats to The City’s general fund and overall finances.

Perhaps most disappointingly, the proposed CCA plan offers the false promise of much more renewable power — but only a fraction of its “360 MW pledge” would actually qualify as renewable power under state law. Even though The City intends to impose the renewable requirement on the energy provider, the cost of renewable energy is higher than power from traditional generation. This CCA plan cannot possibly come anywhere close to its renewable power claims without forcing much higher costs on the residents and businesses who choose to participate in the program.

Here are some other facts to ponder:

» The budget analyst estimates total startup costs of $8 million — $12 million, and ongoing costs of roughly $10 million annually.

» In other places where CCA plans have been tried, results are troubling. For example, the Cape Light Compact on Cape Cod is cited by proponents of CCA as a model even though it has actually been a failure. Rates were low at first. But customers of the Cape Code system now pay the highest rates in Massachusetts with no appreciable increase in renewable power.

» San Francisco power customers would be migrated to The City automatically. They would have to opt out of that system within a specified time period or face severe penalties to opt out after the initial time period.

» There appears to be a plan to offer a “teaser rate” through the opt-out period to actually “meet or beat” PG&E’s rates. But thereafter rates must only be “intended” to “meet or beat” PG&E’s rates. If history is any guide, the SFPUC will lure customers with promises of lower rates, but only commit to doing so until the opt-out period is over.

Once again, the voters’ wishes don’t seem to matter much when it comes to Public Power, Round Two. Perhaps a call to your supervisor is needed.

Nathan Nayman is the executive director of the Committee on Jobs.