San Francisco is trying to get PG&E to relinquish the electric grid serving the city by buying — or seizing — its assets. According to city officials, the utility company is failing the city and causing endless delays to critical infrastructure projects. But the utility giant isn't going down without a fight.
The city’s public utility commission currently provides the majority of the power used in San Francisco, much of it delivered using PG&E’s infrastructure. After years of attempts to buy that infrastructure from the private utility, officials are now pursuing the possibility of seizing the city’s grid through eminent domain, arguing that the public utility can offer more reliable and affordable electrical service to residents. (PG&E would still provide gas to homes and businesses with natural gas service.)
The biggest hurdle on the city’s five-year-long journey to acquire the electrical grid has been that PG&E does not want to sell, which PG&E spokesperson Jennifer Robison confirmed to Gazetteer SF in an emailed statement. PG&E officials said as much when they rejected San Francisco’s $2.5 billion acquisition offer in 2019, and again in 2020.
The private utility provider has maintained that the city acquiring PG&E’s local electricity operation would not “be in the public interest” and that “such a purchase would have many negative effects on the safety and reliability of electric service in San Francisco,” Robison wrote. She added that there are also concerns about San Francisco’s “ability to fulfill the workforce needs” of the grid.
But city officials argue that the public commission is well-positioned to service residents. San Francisco’s utilities commission already provides power to a number of city facilities through the Hetch Hetchy Water & Power System, including the San Francisco International Airport, San Francisco City College, and Muni.
The city also provides power through CleanPowerSF, which has more than 385,000 customer accounts, but PG&E has ownership over the transmission and distribution of that electricity. Between Hetch Hetchy and CleanPowerSF, the city already provides more than 75% of the electricity consumed in San Francisco. Officials argue that owning the delivery infrastructure would allow them to offer better rates to customers, not to mention public oversight and input. In addition, the city wants to get PG&E out of the electrical grid because the utility giant has a history of causing significant delays in infrastructure projects.
Between November 2018 and August 2024, PG&E has obstructed 169 projects, including some pertaining to traffic lights, affordable housing developments and more, according to the local utility provider’s report to the Board of Supervisors in August.
“We have a utility that is not providing us with the service we need to run the city, and that’s really what’s motivating this effort,” Barbara Hale, assistant general manager of the city’s utility commission, told Gazetteer. “I don’t foresee that’s going to change. I think our elected officials are going to continue to see critical city infrastructure projects delayed because of PG&E.”
PG&E’s lack of cooperation leaves San Francisco with just one option: seizing the utility provider’s assets through eminent domain. The tactic is part of a state law that allows the government to acquire private property as long as its owner is paid “just compensation.”
The city got the ball rolling on the eminent domain process in 2021, petitioning California’s state utility commission for a valuation of PG&E’s assets in San Francisco. But the state has yet to provide that valuation, despite originally promising it by the end of 2023.
Terrie Prosper, a spokesperson for the state commission, didn’t directly respond to Gazetteer’s questions about the department’s timeline to make a decision, or what had caused the delay. Prosper did, however, point us to a March 2024 filing outlining their draft standards for determining the value of PG&E’s electricity-related assets in San Francisco. City officials and PG&E representatives have since provided feedback on those standards, Prosper said.
The city utility doesn’t anticipate receiving a valuation decision from the state until next year, according to an FAQ on their website. They also don’t expect the city’s planning department to finish an environmental impact report, as mandated by the California Environmental Quality Act, until 2026. The city utility would then need to get approval from its own commission, as well as from the Board of Supervisors, Hale said.
The Board of Supervisors has historically been supportive of making electricity a public utility. In 2020, supervisors authorized the utility commission to issue bonds worth up to about $3 billion to acquire the city’s grid from PG&E. The supervisors have also been critical of the private utility company’s effects on the city; this past February, District 7 Supervisor Myrna Melgar called for a hearing, seeking explanation from PG&E about recent power outages.
Mayor London Breed, too, is supportive of the city taking over the grid, mayoral spokesperson Parisa Safarzadeh told Gazetteer.
“If a deal is made, we could deliver clean power to all San Franciscans and modernize the grid to more effectively confront the impacts of climate change,” she said via email.
But not everyone agrees this is the best path forward for San Francisco. Jim Wunderman, president of public-private policy advocacy group Bay Area Council, whose members include both PG&E and the city’s public utility commission, told Gazetteer the city acquiring PG&E’s assets is “really at the height of folly.” While PG&E is not “perfect,” he said, the city has its own problems already. He pointed to ongoing issues with homelessness, cost of living, and people “questioning whether San Francisco is the right place to visit” as evidence that the city isn’t up to the task of being a major utility provider.
Although the city is moving forward with the possibility of using eminent domain to seize PG&E’s assets, the commission would prefer “a business-like transaction,” Hale told Gazetteer. “I am still hopeful that could be the outcome.”
If PG&E continues to refuse to play ball, it could mean a years-long battle in court, including repeated hearings and appeals, Hale cautioned.
“We recognize that this is going to take time,” Hale said. “Acquisition of PG&E’s distribution grid — the asset serving electricity in San Francisco — that is not a simple undertaking,” but it’s one that “I think the city has the stomach for.”
