SFPUC WATCHSteve Lawrence

Another Do-Good Debacle

The City Commission responsible for water, sewer and power (SFPUC) has increased rates effective July 1st. Over the next four years combined water and sewer rates will rise 41% for a typical single-family home.

SFPUC also supplies City departments with electricity. Beginning July 1 General Fund departments of the City will pay more. Still, they will pay much less than they would if powered by PG&E. SFPUC's Hetch Hetchy power system subsidizes the General Fund departments by millions of dollars, and has for decades.

General Fund departments (example: Recreation & Park) got the rate increase in order to solve what was called a "fiscal cliff." The budget for Hetch Hetchy Water & Power was out of balance, and earlier was rejected by Commissioners. Like squeezing into tight jeans, postponing and eliminating expenditures, and increasing revenue by hiking the rate charged to General Fund departments, made for a tight fit.

With creative accounting, for decades Hetchy has paid for itself and given the City's General Fund departments electricity at rates far below market. But all good things come to an end ... Only so long can maintenance and renewal be deferred.”

But as one Commissioner pointed out at the meeting where the revised budget was approved, all the extra revenue from the rate increase would not pay for one program, the funding for which was increased: GoSolar.

GoSolar is a city program designed to encourage solar panel installation. The program has spent about 20 million dollars (24m appropriated; 4m unspent). In recent years it's been downsized, causing loud protests from Greens. This upcoming fiscal year, and next, it has been fully funded with $5 million per year.

Essentially there was a trade-off. The budget of Hetch Hetchy Water & Power was out of balance, and presented a future "fiscal cliff." To solve that the mayor grabbed $19.5 million from CleanPowerSF, while fully funding GoSolar. A tasty bone was tossed.

Unfortunately, the power side's fiscal cliff has not disappeared forever. It has been moved back.

Moreover, Supervisors are still furious at the mayor for killing CleanPowerSF and grabbing its funds. CleanPowerSF was to have launched a retail municipal power enterprise, poking PG&E in the eye, and making available 100% renewable power—at greater cost to retail consumers.

With creative accounting, for decades Hetchy has paid for itself and given the City's General Fund departments electricity at rates far below market. But all good things come to an end. Having opened in the Thirties, the infrastructure is old. Only so long can maintenance and renewal be deferred. This next fiscal year, for the first time, revenue bonds will be sold. Hetchy is going into debt. (The Mountain Tunnel trouble, perhaps half a billion dollars to fix, put a decisive end to sunny finances.)

Is GoSolar worthwhile? Well, Commissioners did vote to fully fund it, but there were questions—mostly unanswered. As one Commissioner pointed out, the program pays non-customers. SFPUC money, which comes from rates, goes out through GoSolar to customers of PG&E. Does that make sense? You pay more so PG&E sells less?

Beyond the theoretical difficulty, what has GoSolar accomplished? It was reported that there are 8.2 megawatts of installed capacity. San Francisco consumes somewhere in the vicinity of 18,000 megawatts hours of electricity per day average. Solar (in-city) provides a small share, about half a percent.

GoSolar generates jobs, jobs for the disadvantaged. Has it? It was reported to the Commission that 21 jobs were created. Twenty million bucks spent, so far, 21 jobs...you do the math. But, say proponents, that 21 is only workforce development jobs; there are more that should be recognized. Staff was unwilling to estimate how many more. Solar also reduces emission of greenhouse gases.

This year GoSolar is the beneficiary of politics: it's a convenient way to throw Greens a bone, to compensate for the demise of CleanPowerSF.

GoSolar is but one of what has grown to be quite a number of do-good programs SFPUC sponsors. These programs steer money to causes (and special interests) that are not central to delivering water and sewer service, or municipal power.

At a recent Commission meeting the Coalition for San Francisco Neighborhoods (CSFN) objected to such expenditures by SFPUC. These expenditures are rising rapidly. They inflate rates, threaten long-term financial well-being, and are arguably contrary to law: Prop 218, which requires property-related charges to be proportional to the cost of providing the service.

No comment by Commissioners was made when CSFN presented its objections to including unnecessary expenditures in SFPUC finances. Still, finally the matter has been raised. What happens next?

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

June 2014

After the Bells and Whistles — the Bill

CleanPowerSF has been resurrected. With pressure coming on many fronts, the General Manager of SFPUC agreed to assign one employee to continue work on dreams that will not die. LAFCO members, progressive members of the Board of Supervisors, and the SFPUC’s Citizens Advisory Committee all are pushing for getting into the business of supplying greener electricity. In San Francisco public power is a holy grail.

The SFPUC employee is to work up an RFP (request for proposals) for a consultant-magician, who is to conjure up what SFPUC employees have been unable to achieve.

Staff is mostly keen to do what environmentalists wish: greens are not only most vocal, but also what they advocate means work and jobs. The first job of any public servant is job protection. Will the squeaky wheel get the grease?

Selling “100% renewable” energy for about what PG&E power costs is just not possible unless the City pays or takes plenty of risk. It’s long been a pipe dream. The rabbit hole in which the City finds itself got deeper with the Mountain Tunnel troubles that have developed. Mountain Tunnel has added about half a billion dollars to the power budget. That budget was so out of balance that the Commission refused to accept staff’s proposed budget earlier this year. But some Supes are addicted to their pipes. SFPUC employees must be sick and tired of re-working numbers that won’t add up, no matter what new math is used or how the numbers are smoked.

If a consultant is engaged, the firm will be hired to work magic. What can it do? It must come up with something. Razzle-dazzle distracts undecideds, and wins applause from those determined that the program go forward, no matter the cost or risk. Expect razzle-dazzle.

Germany leads the world in renewable energy. Close to one-quarter of its electricity is generated renewably. For an average household the cost for the subsidies is $355 a year. In Germany the risk of power outage is high. To minimize the risk, Germany is burning more unclean brown coal than it has since 1990. Ironically, its energiewende has increased, not decreased, emission of greenhouse gases. One in six of its factories is generating its own electricity to avoid paying the public rate for electricity. And it’s kowtowing to the Kremlin.

Holy grail? Consultant’s magic tricks? Who needs ‘em.

* * *

If words were water no drought would we have. Recently the press has been awash. How will we survive drought? Life as we know it must change! It’s a crescendoing cascade of awfuls.

Gray water is the answer, say greens. Gray water is once-used washing machine water, or sink or shower water, but not toilet or food contaminated. Fifty percent of residential water could be saved, crow the proponents.

Really? Let’s put this in perspective. Four out of every five gallons of water used in California is used by agriculture. Even in densely populated San Francisco, residences use about sixty percent; business, parks, fire department and others use plenty. San Franciscan residents already use less than 50 gallons a day on average. If half of residential water in use could be saved, the savings would not rise to double digits of what California uses. To accomplish the single-digit savings, your home’s plumbing would need to be changed—very substantially changed. What would that cost? You would need to pay constant attention to which way this valve and that are turned. Shall this water drain to the gray cistern? Shall water be pumped in from the gray cistern? Is cleaning or maintenance needed yet?

Imagine, too, the effect on sewers. Today sewage stink is caused by wastewater that fails to move along. As less water is used it will slow further. The city has budgeted $6.9 billion to modernize sewers. More?

In no small measure modern life is longer, healthier, and far more pleasant because of ready access to clean water. Turn back the clock?

Maybe. The only citizen voice heard consistently by the SFPUC Commission, which oversees San Francisco’s water, sewer and power department, is that of a strident environmentalist. (Recently even the Bayview folk have been scarce.) Staff is mostly keen to do what environmentalists wish: greens are not only most vocal, but also what they advocate means work and jobs. The first job of any public servant is job protection. Will the squeaky wheel get the grease?

With no ratepayer advocate appearing before the Commission, will you be required to re-plumb for gray water?

Water and sewer bills are rising. Over the next four years combined water and sewer bills are to rise 38%, or at an annual rate of 8.4%. That’s about three times the expected rate of inflation. Modest use is assumed. If you use more than average, then you buy more at the higher (tier) rate.

Bills are rising to pay for improving the water and sewer systems, but also to pay for ever more bells and whistles, proliferating programs designed to do good or please some constituency. Programs include give-aways to encourage conservation, GoSolar, neighborhood improvements steering stormwater away from sewers, habitat projects, summer hires of poor young adults, and much more. Rates increases do not include your cost to re-plumb, to unclog, or to re-landscape. 

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

May 2014

The Half-Billion Dollar Hole

Annually, SFPUC, the city department that supplies water, sewer and power service, is required to adopt a ten year financial plan. The idea is to look and plan ahead. It's part of "best practices" governing, and is required by the City Charter.

Most years the updated financial plan is dull. This year, one part of the proposed plan amounts to a "fiscal cliff," in the words of SFPUC staff.

While Water and Sewer are in balance, the Power part is not. Within the last year the cost to fix a portion of the Mountain Tunnel has escalated, digging a half billion dollar hole.

Expect to read more about raising the price of water. It fits nicely with the predilections of bureaucrats. Recycled water is one great way to raise price while doing little good. Let's hope that San Franciscans, who already use remarkably little, are not stampeded into foolishness which fries their finances.”

The Mountain Tunnel is one of the tunnels that bring water from the Sierras 167 miles to San Francisco. It was dug in 1920. The water that it and other tunnels and lines carry is for municipal purposes (drinking, fire protection, irrigation), and also for generating electrical power—which, since the Thirties, has been used by MUNI, street lights and City buildings. (Within the past decade the water-generated power has been proposed to be sold to households through CleanPowerSF, a new endeavor that has not achieved lift-off, and sits on the launching pad, unready.)

The proposed financial plan for Hetch Hetchy Water & Power was called by one commissioner "a disaster" and "not a plan." Staff said the Mountain Tunnel calls for a "momentous" decision. The Commission did not adopt staff's proposed plan for power, calling it a "projection" instead. The Commission asked to be updated quarterly.

Capital cost that affects both water and power is allocated to both. It's really one system providing water and power, but the bureaucrats find it convenient to divide up costs.

In about 2005 Mountain Tunnel work was excised from the capital program today known as WSIP (Water System Improvement Program). Former General Manager Susan Leal had the Mountain Tunnel work, and much more, removed in order to keep costs down, and to finish the program "early," this year—2014. That plan collapsed. Now the program is to be completed in 2019, four years late rather than one year early. (A smaller Calaveras Dam will be done about ten years later than planned in 2003, and at much greater expense.)

While rates for power are not directly billed to consumers (only to City departments and enterprises which now use the Hetchy power), water and sewer rates that you pay are rising fast. "Monstrous" rises are coming, says one commissioner.

What are the latest rate projections? In ten years the rate for water will double. For sewer service the rate will rise 2.7 times. Water increases first, by 12% this coming July 1, and then by 12% and 10% the next two Julys. Then water's rate of increase drops to 7%. But as it does big increases in the sewer rate kick in, starting with 11%, rising to 12%. These are the latest projections. Let's hope there are no further surprises such as the Mountain Tunnel.

A recent Op-ed in a daily paper argued that water rates are too low. They are rising at three times inflation, at least, have been for a decade, and will continue to. The writer failed to acknowledge that agriculture takes four-fifths of the water used in California. Do we really want to drive that industry from the state, and raise food prices, which would punish the poor? The writer proudly uses a market mechanism to use less water, but then switches to proposing to raise price only for higher tier use. Multi-person households jump to the higher tier quickly; might it be that those living with many to a household tend to be poorer, and tend to be home, not out of town, more of the time?

Expect to read more about raising the price of water. It fits nicely with the predilections of bureaucrats. Recycled water is one great way to raise price while doing little good. Let's hope that San Franciscans, who already use remarkably little, are not stampeded into foolishness which fries their finances.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

March2014

Water Worries

Ocean Beach is on the edge. Just as San Francisco is notoriously edgy, so is this wild world of water and sand. Removed from city, from people and buildings, from insanity and stress of complicated life. Opening on the vastness of the Pacific, Ocean Beach is wild and free. A place to clear your head, to renew; walk your dog or talk with friends.

Unnoticed by most of us, Ocean Beach is changing. Slowly sea levels are rising. Suddenly, at the time of winter King Tide, especially if a storm strikes then, the ocean can attack beach, sand, cliffs, road and man's "improvements." This last happened in 2009-10. Next? Who knows.

In the past we have responded to the ocean's sudden strike with emergency measures, usually dumping rock. It's ugly and unwanted after the crisis passes.

"Managed retreat" is the guiding philosophy. The southern section of Great Highway is to be re-routed inland around the Zoo; for a stretch…”

To address the imperative of change in a better way, a master plan was released in early 2012.

Now the master plan is being implemented. SPUR's Ben Grant is the "czar."

Eventually an agreement will be reached whereby the main players agree on roles.

So far the Corps of Engineers has provided sand to the north end of the beach, and some has been moved to where it is needed at the south end.

While the master plan contains much about what should be done at the beach—access, amenities, trail, bikes, plantings and much more—details are being worked out. "Managed retreat" is the guiding philosophy. The southern section of Great Highway is to be re-routed inland around the Zoo; for a stretch, Great Highway will be reduced from four to two lanes.

But unlike the ocean's sudden attacks, man-made changes at Ocean Beach will happen slowly over years. The master plan's horizon is 2050. While key sewage infrastructure will be protected, managed retreat and soft accommodation will mostly rule. Pilot projects will tentatively try out ideas.

There is no place like Ocean Beach for open space, awe (at the mighty Pacific), and for renewing the spirit.

Water Supply

One might imagine that water supply and demand are matters long addressed and known. Rain and snow falls (usually), rivers run, water is captured and stored, people use what they use year in, year out. Population grows some, low-flow fixtures are installed; numbers are adjusted a bit.

Not that easy! No, complications are an important part of bureaucratic work. No one else must understand. Creative ambiguity is baked into every report.

So it is with water supply and demand.

Overall, so far as your interpreter can tell, the numbers look good. Less water is being used--much less than was predicted a decade ago. Even suburbanites to the south and east, who use two-thirds of the Hetchy system's water, are using less.

As for the future, while demand is expected to rise some in the next few years, it is then expected to stay about steady for twenty years.

Over the next five years demand in the suburbs is to rise 16%, while city demand is expected to rise about 8%. Naturally, this assumes regimens of strict conservation.

The city must finish work to which it is committed. Recycled water (very expensive) and other "alternative water sources" need to be developed, or all projections evaporate. Groundwater is to supply "up to four million gallons per day." Up to? (Would you be happy if your salary was "up to $5000" per month?)

Construction of alternative water sources will take the next eight or nine years. Groundwater wells and lines within the city are to be built 2014-17. Two recycled water projects follow: Westside Recycled 2017-19; and Eastside Recycled 2019-22. The cost of these will be interesting to follow; already putting substantial upward pressure on rates, overruns on these projects could add pressure to raise rates. Past estimates have proven too low. A dozen years ago recycled water projects were to supply nearly three times what is now projected, at less cost.

Delays in water projects have hurt. Calaveras Dam has been delayed by ten years so far. Filling a reservoir on the Peninsula is being delayed by a thistle.

A recent meeting of the San Francisco Public Utilities Commission discussed what effect Governor Brown's declaration of drought has on San Francisco. None, was the initial answer, then qualified: Customers who buy water from our system will likely receive less from the State, and will then ask the Hetchy system for more. As wholesale customers have been receiving less than they are entitled to take, it is foreseeable that demand may rise. The discussion did not quantify. The Hetchy system has about a million acre feet stored. This is much more than sufficient to provide for the next year, but not all stored water is immediately available, and it is important that it be replenished as insurance against a long drought. Drought has been declared, a 10% cut-back in water use is requested.

This Spring rates for the next two years will be set. Costs are not decreased by drought. To the extent less water is sold, rates need to be higher. If customers reduce use, more is sold at the lower rate tier. Rates are likely to rise by 12-12-10% beginning July 1 of the next three years.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

February 2014

SSIP and a Share of the Pie

As one who writes about SFPUC—water, sewer and (public) power—I've tried to get my mind around the program called SSIP: Sewer System Improvement Program. This is now a $6.9 billion, twenty-year endeavor. The first ten years is Phase One, during which time about $2.7 billion, 40%, is to be spent.

But back then SFPUC needed voters to approve bond funded work. Today no voter approval is needed. So no set of projects, with cost and schedule, need be presented today. SFPUC does as it wishes; the sheep are corralled.

It is not easy to understand the SSIP. In all about $10,000 per person is to be spent, $500 per year.

One thing is clear: much has changed in a dozen years. Back then the program to update the water system was being launched. (Now it is more than three-quarters done.) There was a definite set of projects, with a cost and schedule for each.

But back then SFPUC needed voters to approve bond funded work. Today no voter approval is needed. So no set of projects, with cost and schedule, need be presented today. SFPUC does as it wishes; the sheep are corralled.

The goals of the water program were to supply more water, and to keep it flowing after a sizable earthquake. After the program was funded, the goal of supplying more water was abandoned. Instead, demand (water use) is being ratcheted down.

The goals of the sewer program are harder to discern. Despite a budget nearly seven times what it was in 2002, today's goals seem amorphous: renew the city's sewage treatment system, especially on the east side of town. There is no set of projects (they will evolve), no expert's report about what is needed, no blessing by gray hairs confirming that the program is a good one and the right one. All of these were there for the water program. But none of that is needed now that voters are corralled.

Speaking of spending freely without constraint, SFPUC spends rate payer money on Lake Merced. The theory is that the lake is an emergency water source. But if an earthquake and tsunamis occur, the ocean may flood into the lake. Here's an emergency water source that could fail in an earthquake.

Perhaps "emergency water source" is merely a justification of convenience, a way to get the money from rate payers rather than from the city's over-subscribed General Fund. Raising rates is easy.

 

Looking now at our national economy, until the early 1980s labor and capital divided the "pie," the value created, often called GDP, in the same proportions: about two-thirds to labor, and about one-third to capital. The pie grew, expanding even faster than population, so that standard of living rose.

While there is no consensus about why, it seems likely that machines are replacing people as workers. Fewer workers are required. Leveraged by better machines—especially computers—workers produce more.

In the early '80s, labor's share of pie began to decline. While the pie continued to enlarge for another generation, labor's per-person take remained about constant; labor's proportionate share declined.

Then in the 2000s expansion of the pie began to slow. After the financial crisis of 2008, expansion of the pie approached stoppage. Now labor's share is closer to three-fifths.

Even worse, the share of labor's bottom 99% has dropped from about 60% to not much over 50%.

This same phenomenon happened all over the world. It is pronounced in Norway and Sweden, countries known for equality.

Why has this happened, and what can be done about it?

While there is no consensus about why, it seems likely that machines are replacing people as workers. Fewer workers are required. Leveraged by better machines—especially computers—workers produce more. Give machines a smart, hard-working few, and enough will be produced.

Where does this leave the former workers?

Demanding a remedy is where. Upon losing their jobs, unemployment, or disability, maybe food stamps, maybe a buy-out, is their lot. Former workers look to government for help.

And government is here to help. Pols who wish to be re-elected spread the wealth.

Pols whine "ain't it awful," and they point accusing fingers at the (greedy) wealthy, banks and Wall Street firms, all while raking in "contributions" from those same wealthy donors, wink, wink. Pols pontificate about the importance of education and training, and make token efforts.

But the harsh truth is education and training, while essential for supplying the ever fewer workers that are required, are not efficiently spent on the surplus masses. It is far more efficient to send bread and circuses. Today, make that take-out and Hollywood.

There are plenty of smart, hard-working young, often from far-away places.

Politicians don't know what to do. They do know that they play a role in keeping the great Machine churning, and that the grit of too much unrest would surely slow it. None of that. Hard enough it is to keep the masses fed and entertained, and themselves in office, while both lambasting the rich, and exacting contributions from them.

When a majority of the populace is no longer engaged in producing the wealth, then what? How does society, so long used to spreading work around, adapt?

This space customarily addresses local issues—diving not into the deep end. San Francisco is lucky to attract young, smart, workers—mostly from elsewhere. From the blossoming of efficient Machines we benefit. No Detroit, no Stockton here. Keep that golden goose happy.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

December 2013

Water-Sewer-Power

Water supply will be insufficient in the future unless there are additions. Recently SFPUC staff presented the possibility of adding recycled water to the city’s drinking water, directly or indirectly.

...assurances were given that no more than ten percent of any water served to city customers would be (lower quality) groundwater... Now we’re talking about drinking recycled water.”

How far and fast we have fallen! A decade ago there was a plan to increase the water supply, and assurances were given that no more than ten percent of any water served to city customers would be (lower quality) groundwater. The excellent taste of Hetch Hetchy water (so good it was bottled and sold) would be forever preserved! Later, plans to increase supply were scrapped. Then supply was eroded by commitments to streams and habitat. Assurances that groundwater would make up less than ten percent ceased. Now we’re talking about drinking recycled water. All within ten years.

Has this grand waterfall of expectations reduced cost for the ratepayer? Dream on. The cost is up, and as mentioned last column, the next three rate rises on tap are 12-12-10%. Let’s hope your raises do so well. (SFPUC is in the final third of its water improvement program, which aims to upgrade the system, and keep water flowing after a major earthquake. The $4.6 billion endeavor started eleven years ago and is to finish up in 2018.)

Sewer. A $6.9 billion Sewer System Improvement Program (SSIP) has been launched by the San Francisco Public Utilities Commission (SFPUC, the department of city government responsible for water, sewer and public power). The twenty year program is to renew the city’s sewers and sewage treatment system. So far about $30 million has been spent. During the first ten years, phase one, $2.7 billion is to be spent, on average $270 million each year. The largest single work will be building new digesters for the main sewage treatment plant, the Southeast Plant on Third Street at a cost of about a billion and a half. But “green infrastructure” projects lead off; these are supposed to reduce the volume entering the plant.

As SFPUC needs no authorization from voters to spend whatever it wishes on the SSIP and other programs, projects even include about $15 million for early forecasts of rainfall. NOAA (National Oceanic and Atmospheric Association) is to build special stations funded by your rates.

Power. Electricity (as well as natural gas) is mostly provided by PG&E, though now SFPUC supplies public facilities such as MUNI and City Hall. It has been proposed that SFPUC expand, supplying some private homes and businesses with “100% renewable power,” displacing (the hated) PG&E and establishing a beachhead in the battle (of some progressives) to kick PG&E out of San Francisco. A few years back the war cry and promise was to provide renewable power at or below PG&E’s price, “meet or beat.” A couple of years ago, as the plan matured, “meet or beat” became at a “comparable” price. But that hope, too, slipped away. It became apparent that the city could not supply renewable power as cheaply as PG&E supplies power that is only fractionally renewable. Welcome to reality.

At a meeting in August, only two of the five Commissioners voted to establish a maximum rate at which electricity would be offered to customers of the new power provider the city is establishing, called CleanPowerSF. Three Commissioners declined to set a rate, which means the effort is frozen. Members of the Board of Supervisors, which eleven months earlier had authorized the Commission to set a rate, went ballistic. An aggressive letter demanding answers was sent. In September SFPUC staff logged its responses to the letter.

Usually employees of SFPUC, and its Commission, are all too eager to undertake to better the world in ways presently in fashion. Since 2003 SFPUC has an open checkbook; it alone needs not get permission from voters before spending as it wishes. It increases rates for water and sewer, and potentially for electricity, to pay for whatever it wishes to do. It is almost always fun to spend other people’s money. SFPUC’s commissioners are not even elected by voters. Why not spend, you might ask? Increasingly SFPUC has come to do more in the way of “community benefits,” street beautification, parks and greenways, and has taken responsibility for expenses like the water system for fire protection and Lake Merced. Why use city general funds when SFPUC can raise rates to pay? One can only imagine what would cause commissioners to put the brakes on something the BOS authorized. One can hardly imagine how surprised and shocked the BOS was when its will was thwarted! No small jolt was that one!

The ending of this story has yet to unfold. The Mayor prefers not to embark upon another potentially costly public crusade. The BOS, though, at least some of them, are quite determined.

Tangentially, it is interesting to note that not only has the value of utility companies in Germany halved over the past five years, but also earlier this year the price for traditional power went negative. Negative means a generator was paid to provide power. Why? Too much power for the grid to handle; the grid becomes unstable if overloaded. German utilities must buy renewable power, but utilities also need to maintain traditional sources for when the sun fails to shine and the wind fails to blow. It turns out to be hard to shut off some traditional sources. Thus incentives (pay not to provide). Increasingly one source of reliable power is American coal. To Germany, the world leader in encouraging renewables, we export American carbon so Germany may stabilize its troublesome grid. Where are we headed? It’s enough to spin one’s head.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

November 2013

Water Supply

Hetch Hetchy reservoir (Tuolumne River) supplies nearly seven-eighths of San Francisco's water. It also supplies the Peninsula, and parts of Alameda and Santa Clara counties with most of their water. 

When the water system opened back in the early Thirties, the city served water to lands along its then new transmission line. These places were sparsely populated. But since then, they have grown to consume twice as much water as does San Francisco. San Francisco is morally and contractually obligated to keep supplying these areas that have long relied on the water supply. Such are the burdens of being big and powerful. Decades later, still powerful, but less so, obligations still bind.

recently a grant program was expanded. It encourages developers to save water. A grant might be $500,000, saving 3 million gallons per year. That sounds like a lot of water, but is it? The cost per unit of saved water (a unit is about 748 gallons, 100 cubic feet of water) comes to $125 per unit; that unit could be saved repeatedly for years.”

When enviros demand the draining of Hetch Hetchy reservoir to eventually restore it to parkland, voters of San Francisco would affect more than themselves and their city.

Water supply for the future is short. A presentation given to the San Francisco Public Utilities Commission showed that in twenty years the shortage could be over 26 million gallons a day. That is just over 10% of what is delivered today.

Demand for water is expected to decrease before it increases. This creates an illusion. Plenty of water, right? No.

Because of this odd situation, projects are being postponed. Perhaps that is not what authorities admit, but they are. Calaveras Dam is the largest such project; it was to be done in 2009, now it is 2018. A groundwater storage project has been postponed, and there is even some doubt about whether it will be done. Recycled water has been delayed over and over; the amounts to be delivered have greatly decreased while cost has risen.

In a way, inertia and inaction works: An earthquake can strike at any time. Why build what may be destroyed?

But to increase water supply gets harder as time passes. Ten years ago San Francisco could have easily taken 10% more. Today?

While in the near-term there is sufficient water in normal and wet years, in drought there will be shortages. Once rationing exceeds 10-15%, economic impacts become quite severe.

San Francisco has made commitments for the health of creeks from which it takes water. Minimum flows down the Tuolumne River and through the Delta are also important. San Francisco has an enviable supply. But water is in demand—for human uses, and for fish and the environment.

In upcoming years Yosemite looks likely to receive about the same precipitation that it has over the past eighty years. But that is uncertain. San Francisco's main watershed is high in elevation. Snow levels will rise. That will adversely affect runoff, making water harder to capture when it is needed.

For only so long can State authorities keep demanding both cramming more people into San Francisco, and using less water.

Already customers of San Francisco (those to the south and east receiving Hetchy water) are unhappy: San Francisco is too slow and uncertain. The potential for insurrection cannot be ignored. San Francisco could find itself at the precarious end of a long pipeline, losing jobs, water, and control.

Pressure builds. Over the next two decades the region's population is to grow 22%. In San Francisco the rate is just over half that. Water demand is to rise about 20%, but only 3% in San Francisco. Already we in the City are the lowest users, yet we are expected to reduce use more than others.

Most of SF's reduction in water use per person is to come from conservation. For example, recently a grant program was expanded. It encourages developers to save water. A grant might be $500,000, saving 3 million gallons per year. That sounds like a lot of water, but is it? The cost per unit of saved water (a unit is about 748 gallons, 100 cubic fet of water) comes to $125 per unit; that unit could be saved repeatedly for years. The cost of even expensive recycled water is on the order of $15 per unit; recycled water is multiples more expensive than importing Hetchy water. So, yes, we can save water, but at considerable cost.

Rates charged are rising fast, and will continue to rise. For the upcoming three years, expected increases are 12, 12 and 10%. In the past five years rates have risen about 60%. Decisions today reverberate for years and decades. When your water bill becomes unacceptably high, it will be too late to do much.

Renew!

While all around the city new development blooms, it is good that some of what we treasure is not replaced, but is updated and preserved. The City needs a balance of both new, and treasured old.

A small example of preserving and renewing is the renovation of the Forest Hills Clubhouse. This architectural gem, pushing its century mark, needed updating, but without ruining its character. The Forest Hills Association hired a master planner, and with careful thought has done a half million dollar renovation. There are new ADA compliant rest rooms, seismic improvement, new roof and furnace, better kitchen facilities and more. From the outside you may notice almost nothing. That's desired. Meetings of community groups, musical performances and more have been held at the Clubhouse. The hope is that for years to come the clubhouse will welcome and delight Westside residents, reprising a day when time itself ran slower and more stately. (381 Magellan Avenue; Plath & Co. contractor.)

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

October 2013

Can our City Spend? Yes We Can!

Municipal spending is up to $7.9 billion this fiscal year, nearly $10,000 per city resident. And City government is adding employees to its already bloated payroll. Yet, pension and healthcare costs remain long-term threats, the 2011 "reform" notwithstanding. What gives?

It seems nearly impossible to adequately address the monster issues of pension and healthcare. City government continues to assume that its pension fund will multiply as bunnies do. Like bunnies, our leaders nibble, and crawl into a dark hole.

What renewable generation will be erected? Windmills off Ocean Beach? ... No plan has been put forward, other than to hire consultants to conjure up a plan?"

The problem seems to be that the public figure who tackles the elephant in the room gets smushed. If you are a retired city employee, or one soon to retire, or one who hopes one day to retire, or the relative of one, pension and healthcare is the be-all and end-all of your civic concerns. Like rent control for covered renters, no other issue comes close. Quickly you become a fanatic, a one-issue voter, obsessed with the big pocketbook issue. The public official who tries to do the right and rational thing gets creamed. The public official who weaves and dodges, or nibbles, survives. Promoting the general welfare is fine in theory, but if you want to get elected in this town, you deal with real interest groups, not real issues.

Similarly, the elected official who showers benefits on groups A-ZZZ gets votes and supporters. The elected official who withholds spending gets none. Guess who gets elected? Guess which practice prevails?

Today, even the so-called enterprise departments are in on the big spending game. Ten years ago SFPUC (water, power, and sewer) had no community benefits group. Today it certainly does, headed by an assistant general manager who makes nearly 200k. That's just salary. She makes more on the outside. She steers millions of dollars to "under-served" communities. In doing so it is recently said that she steered a no-bid contract to a company in which she was financially interested, receiving annual compensation from it of more than $10,000. That's a no-no.

But it's tough when your job is to give out money to the "under-served" to remember that there are limits. You feel fortified with virtue. Beneficiaries love you. It's so easy when you spend others' money. Ratepayers' money.

With more and more spending by more and more city employees with ever bigger salaries and grandiose titles and perquisites, more wanton waste is bound to surface. Rules are bound to be skirted. Elected officials and their appointees know that goodies are best steered to those who know how to return a favor.

Consider GoSolar. As of early this year, $17.1 million had been bestowed on 2158 applicants through this program, which improves private property with public funds. That amounts to nearly $8000 per applicant. The typical solar installation costs $15-20,000. Recently, with the program cut back due to tighter times, 61 (of 199) applicants got $416,000, $6820 apiece average. Ratepayer money goes to a hungry group of purveyors and installers, creating not only a way to bestow benefits but also an interest group to lobby annually for more solar funding. A bureaucracy oversees it all.

But GoSolar is only a pilot fish. Once finally launched, CleanPowerSF promises a "robust local buildout" of facilities generating renewable electricity, all for 11.5 cents per kilowatt hour. If there is a plan for how to generate electricity cheaply enough to supply it at that rate, it is well concealed.

CleanPowerSF looks like a boondoggle: a well-intentioned, ill thought-out program, costs ballooning. It talks "100% renewable power" but much of the power is not renewable. It uses accounting trickery, so-called RECs, renewable energy credits. It does this to develop bonding capacity, i.e. more City bonds and debt.

CleanPowerSF is claiming to be the sword that slews global warming. Really? Electricity accounts for 24% of San Francisco's greenhouse gas emissions, according to an SFPUC document. CleanPower slews a lesser dragon. How powerful is its swift sword? CleanPowerSF promises to increase generation from renewables. But that promise is already disappointing with its proposed use of RECs (indulgence-like "credits"), and inclusion of big-hydro power (not renewable, and not reliable, varying from year to year). A qualifying "renewable" is biomass, which does not even reduce greenhouse gas emissions, and may increase them. What renewable generation will be erected? Windmills off Ocean Beach? Solar PC has already occupied the prime sites, yet these don't generate electricity for anything close to as low as 11.5 cents per kilowatt hour, the rate proposed to be charged. "Robust local buildout" is the talk; but what is the walk? No plan has been put forward, other than to hire consultants to conjure up a plan. Isn't CleanPowerSF really about elected officials show-casing good intentions? No wonder the SFPUC Commission balks; it's a green pipe dream.

In a free spending city it is good that there may be some sensible limits.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

September 2013

Another Bite of the Ratepayer Apple

Your water and sewer rates fund more than you think. It is the new policy of the SFPUC (water-sewer-municipal power) to include in agreements with consulting engineers a provision where the consultant agrees to spend a sum of money for "community benefits."

For example, at its late May meeting the Commission authorized an $80 million contract to engineer new sewage digesters for one of the City's treatment plants. (That's $80 million for the engineering, not for building the digesters.) As part of the contract, the engineering firm agreed to spend $1 million on "community benefits."

What are "community benefits"? Money spent to win acquiescence, cooperation, or forbearance. Some might say "tribute."

What are "community benefits"? Money spent to win acquiescence, cooperation, or forbearance. Some might say "tribute." For example, when the Southeast Wastewater Treatment Plant was built, the community was given the Southeast Community Center, which has been maintained and funded by your sewer charges ever since.

It's one thing for SFPUC to spend directly on community benefits. And SFPUC does. It has an assistant general manager in charge of community benefits, and she and those under her do spend. At least one knows what is spent, and what for.

But requiring a consulting engineer to spend invites favoritism and corruption. The engineering firm does not care how its million is spent. All it wants to do is please its client, SFPUC. "Tell me how you would like me to spend and I shall." How easy it is, then, to spend for a friend. It's an off-budget expenditure; were you to research how much is spent by SFPUC on community benefits, that would not be included.

It's also an extra bite of the ratepayer apple.

From the tone of voice and attitude of the SFPUC General Manager it was obvious that he is proud of the new policy—this back-door way to spend more on community benefits. This is today's innovative government.

Similarly, in a meeting in early June, the SFPUC Commission authorized the GM to give money grants to homeowners who might benefit from installing protection against flooding. Other homeowners spent their own money to protect their homes. You might well ask why some homeowners get grants while others make do for themselves. Authorizing the GM to give out $150,000 in grants enables favoritism.

Long gone are the days when courts declared such expenditures "gifts of public funds," a specie of corruption.

All we have today are lame "oversight committees" comprised of political appointees who can be counted on to provide a veneer or appearance of oversight without any real substance. So much money flows that a million dollars here and there is hardly noticed, is often not discussed by the Commission. The matter of the million dollars for community benefits would likely not have been discussed except that a community activist, proving his chops, demanded more money.

The City-

1. spends general funds throughout the city, benefiting a community;

2. SFPUC has an assistant general manager and a team focused on community benefits, spending ratepayer dollars directly on select communities; and now, under a new policy,

3. each SFPUC consultant will spend a portion of its contract monies for community benefits. Strike three: ratepayer is out.

Time was, City government maintained roads, public transit, parks, street lights, water, sewer, justice, and facilitated commerce upon which city life relies.

Then City government expanded. And kept expanding. Now, what doesn't it hope to do?

It hopes to equalize "social benefits" throughout our City, partly through "community benefits."

A recent Policy Analysis Report (to Supervisor Avalos) spells out "the distribution of social benefits." This is foundation for the next phase, which will address how City resources address (you can be sure this means "remedy") the existing distribution of social benefits. Impliedly if not expressly, the City will succeed only if it remedies all disparities and creates equality. An impossible goal; but, impliedly, one worth striving for, according to the policy analysis.

"Social benefits" include income, parks, education, safety (freedom from crime), health and environment.

The policy report confirms what most residents already know: Pacific Heights is rich, the Tenderloin is poorer and less safe, etc.

Is the proper role of the City to try to equalize the distribution of social benefits? Isn't the point of working to contribute to society, and thereby earn social benefits, many of which can be bought with the money earned by working? By redistributing, making equal, does the City not undermine that? While it is in the interests of all to provide a safety net, should equal social benefits for all be the goal?

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

July-August 2013

Irritations, Various But Never Sundry

Development Central. To guide downtown development, the Central Corridor Plan has emerged. Downtown is already growing. Construction cranes seem everywhere. Zoning changes are to enable even more. Height limits will be raised, office buildings encouraged, and downtown density allowed to increase. The idea is to promote job growth, and provide more residences near transit. The Central Subway is the centerpiece of the Central Corridor Plan.

By 2040 San Francisco is to increase its housing units by one-quarter, and jobs by one-third. In the past similar goals have not been met. But looking at all the development that is already under way, will it be different this time?

Four well-connected consulting firms each take home $5 million dollar prizes. Who knew that City watersheds required such extensive “management?” And by not one, but by four consultants. Our two thousand-employee SFPUC, staffed with City hires, apparently does not have the time or expertise.”

Is it all over the hill for those of us living on the Westside? Maybe; now most development is on the east side of town, and downtown. But in-fill housing is occurring all over. To fill all those new jobs more people may come to live in existing housing, too. Traffic will increase. Will re-zoning eventually come to transit hubs around Forest Hill Station and West Portal? Will high rise housing spread down Brotherhood Way, across from where churches are now, or displacing their parking lots?

To address new development on the Westside, GWPNA (Greater West Portal Neighborhood Association) has reconstituted a Planning and Land Use Committee to review and weigh in on new, proposed developments.

As last month’s Observer advised, fatal traffic accidents are already more likely on the Westside than anywhere else in the City. GWPNA has formed a traffic and safety committee which is working toward improvements. Four priority intersections have been picked. All touch or are within one block of West Portal.

Recreation scores! Overcoming intense defense, recreation scored a golden goal at the west end of Golden Gate Park, where the sun is setting on grass gopher fields. It is hard to balance park virtues of open space, tranquility, and nature with the values of recreation. Both should win. Absent a lawsuit and another turn of the wheel of political fortune, recreation has won this contest.

* * *

Water System Improvement Program (WSIP): Costs are up $55 million; the budget has been re-set to $4.64 billion. Completion of the revised program has been delayed until Spring 2019. The big cost bust came from Calaveras Dam, which is spilling over by $200 million. Savings on other projects, and on the amount of financing (the interest payable on bonds), because of today’s extraordinarily low interest rates, helped minimize the cost increase.

* * *

Dig this gig: At a recent meeting of our City Public Utilities Commission $20 million was authorized for “watershed monitoring and management technical services.” Four well-connected consulting firms each take home $5 million dollar prizes. Who knew that City watersheds required such extensive “management?” And by not one, but by four consultants. Our two thousand-employee SFPUC, staffed with City hires, apparently does not have the time or expertise.

While this spending authorization is a drop in the proverbial bucket, it illustrates rampant, out-of-control spending. Rates must rise to pay for all expenditures. But if you’re a City manager, four consultants, lotta lunches, and less work for your “hard-working, dedicated public servants.” “Win-win,” as the bureaucrats love to say.

Work begins this month. While the consulting firms may be large and well-connected, the contracts require “community benefits,” and at least 13% local business participation.

What do such lucky consultants actually do? We little people will never understand. “Specialized hydrological services.” What is hydrology? It is “the science dealing with the waters of the earth, their distribution on the surface and underground, and the cycle involving evaporation, precipitation, flow to the seas, etc.” Forked sticks anyone?

* * *

Bolts from the blue. Now we’ve got two bridges from Treasure Island to the contra costa, both seismically suspect. How long has it taken? Two dozen years. How many billions? $6.4 billion. Original estimate: less than one billion. Thirty-two fasteners have snapped; 2000 more are suspect. Caltrans’ rep? Shaky, at best.

* * *

Building blocks of government dysfunction. Sometimes small examples project large. At a meeting of the Greater West Portal Neighborhood Association, Phil Ting’s representative weighed in on a neighborhood concern: pedestrian safety. Ting is in Sacramento, a member of the Assembly. No doubt he wishes to show what he can do to address this concern. His proposed state law funds speed signs at places where seniors walk, signs to slow traffic. Think about it. Does San Francisco really lack money for signs? Does San Francisco need state regs to tell it where to put signs, how large they should be, what color and shape, or how to determine appropriate speed? Of course not. This proposed law serves the politician; it gives him something about which to crow, proving he is responsive and “cares.” It’s all fine with the bureaucrats: one set, in Sacramento, gets to draw up regulations, and dole out money, after applications are scrutinized, i’s dotted and t’s crossed. Another set of public employees, in San Francisco, gets to hire consultants, massage data, and apply for and secure Sacramento funding. Add another brick to the wall of dysfunction.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.co

June 2013

 

Riotous Rates

Rates for water are expected to double by 2021—in eight years. Water rates have been zooming higher at much more than the rate of inflation. Increases pay for the $4.6 billion Water System Improvement Program (WSIP). That program is scheduled to be completed in 2016, but now SFPUC has acknowledged that it will be more than two years late. The budget for the program is busted as well: for now by $17.6 million. But this figure fails to tell the whole story. The entire program contingency fund is used up years before construction ends.

The budget for the program is busted as well: for now by $17.6 million. But this figure fails to tell the whole story. The entire program contingency fund is used up years before construction ends.”

Why are rates set to increase so? Not only is there the cost of the improvement program, which should make the water system more reliable, but also SFPUC has morphed from a sleepy city department to Big Shot Money Bags. San Francisco Public Utilities Commission (SFPUC) needs no voter authorization to sell bonds (incur debt). Consequently, in challenging times for other city departments, SFPUC can step up. In recent years it has taken over fire protection duties, Lake Merced (from Rec & Park), the irrigation of golf courses, street sweeping costs, GoSolar, and much more. It has built itself a beautiful new office building, paying the city $9.9 million for property for which the city paid $2. It is bestowing “community benefits” throughout poor neighborhoods. Elected officials love spreading the wealth by bestowing community benefits; grateful beneficiaries support the officials. Even way out in Sunol, SFPUC throws parties for folks. At a recent meeting, SFPUC authorized $400,000 for a demonstration garden and outdoor classroom, $900,000 for an “interpretative facility” in Sunol providing information about the Alameda Creek watershed, and $9,500,000 for “energy efficiency” for various other city departments. It’s got plenty of money and clout.

Still wonder why your water rates are going to double again?

Just gettin’ warmed up: The Sewer System Improvement Program (SSIP) is three times as costly to City ratepayers as is the WSIP. The SSIP is just being launched. Employees on one project can move on to the next. Sewer rates are already higher than water rates. You do the math. Or just reach for a drink—and probably not water.

The Revenue Bond Oversight Committee is supposed to oversee SFPUC’s spending of bond monies, insuring that the spending is proper. For the second year in a row, however, the RBOC has failed to issue an annual report about its work on time. So here we have the group that is supposed to insure that spending is copasetic, yet it is unable to follow its own rules and issue a simple annual report. That’s city government is a nutshell. Nut shell indeed.

Batting .333 with SFPUC. The SFPUC offers tours to the public that can be rewarding. But for the writer, over the past year only one in three actually panned out. That one, a tour of the new headquarters building at 525 Golden Gate, was impressive. I also registered for a tour of the Hetch Hetchy water system, one that was to have taken me by van all the way to the source in the Sierras, but then was never contacted. Responding to a Facebook invitation that last minute places were available on a tour of the Oceanside Treatment Plant, the only way to submit one’s application was by mail. The tour was the next day. While one could fill out the application online, there was no way to submit it online. Bureaucratic SNAFU—situation normal, all fouled up.

Pension reef. Will San Francisco’s city employee pension fund hit a reef, and wreck like the Costa Concordia did in Italy, or will it negotiate choppy waters? That’s the big question. At nearly $15 billion in size, and obligations more than a match, it’s no small matter.

The Civil Grand Jury opines that the pension fund, large though it is, is not large enough, embraces policies that threaten disastrous losses, and over-estimates future returns.

What to do? No easy fixes are proposed. The City should pay in over $700 million, about ten percent of the City’s annual budget, over the next few years. No current office holder wants to forgo spreading the wealth today to shore up a pension fund that provides for the future. No friends won by withholding today; spend now, worry tomorrow. We’ve seen where this can lead—Stockton, San Bernardino, Detroit. But we’re different, right? It won’t happen to us, will it? Sail on!

Sail Away. It’s begun to look like our America’s Cup runneth far from over-full. Losses of $20 million dollars are being forecast by our crystal ball gazers. As for the thousands of jobs? Blown away.

What happened? Twelve estimated entrants shrunk to a mere three. Sales taxes and hotel taxes generated may still make the event worthwhile, some city officials say.

So when does it all happen? On the Fourth of July (a Thursday this year) the grand, and long, event kicks off. The challenger, the “Louis Vuitton Cup” winner, is chosen in the last days of August. Then the defense of the Cup races, seventeen competitions, are scheduled for September 7-21.

Fleet Week? It could be canceled this year, a victim of the sequester. If it flies, Angels from October 10, fleet October 12.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

March 2013

Robust Local Buildout

CleanPowerSF, the city’s renewable electric power alternative to PG&E, is expected to launch its first phase late this year. Customers who are invited to join and who do not opt out will pay extra to receive 100% renewably generated electricity. Initially this renewable electricity will be purchased by Shell Energy for CleanPowerSF. (More below on what premium you would pay.)

While initially renewable electric power for CleanPowerSF’s customers will be purchased on the open market, that may not last; a key goal of the program is to replace power generated out-of-town with locally-generated renewable power. Officials promise a “robust local buildout” to achieve this. The goal is to supply all of San Francisco’s needs with locally-generated renewable electric power. Really? All?

The SFPUC’s own consultant disses the CleanPowerSF phase one program as “not competitive, achieves no jobs, no security; very similar to PG&E proposed ‘Deep Green’ rate…except more expensive.”

Hard though it may be to believe, now before the San Francisco Public Utilities Commission is a plan to spend a billion and a half dollars for green generation facilities.

So what will be built? How does San Francisco generate electricity from renewable sources right here in town? Windmills a-top Twin Peaks? How much local generation is needed?

So far windmills on Twin Peaks are not proposed. San Francisco now has 13 solar arrays and 2 biogas generators. The 13 solar arrays offer a capacity of 7.4 MW. San Francisco needs one hundred times more megawatts, so many more solar arrays would be constructed. Like 600 more. Six-hundred?

If recommendations of SFPUC’s consultant are followed, to eliminate risk for the willing customer, and so that benefits are immediate, CleanPowerSF would finance, install, operate, and maintain renewable generation facilities on private property under “shared savings agreements.” Three thousand jobs are promised. No wonder a billion and a half dollars of debt is forecast. This plan is rife with the possibility for disputes, empowers teams of bureaucrats, and opens another avenue for favoritism and corruption in a city wide open to such evils already.

While the buildout is described as both “robust” and “local,” “local” is broadly construed. Oakville, in the Central Valley, is the proposed site of one large solar facility. The cost is estimated at $210 million. A “regional” wind farm is proposed.

San Francisco has studied generating electricity by tidal power, but found that not feasible.

Wave power has also been studied and is considered feasible. The 2009 report on wave power proposes a 30 megawatt “farm” 7 miles west of the Zoo in 110 feet of water. Gray whales must be accommodated; they migrate, and must not be disturbed. The capital cost is estimated to be $120-140 million; O&M cost is hard to determine from the report, but annually seems somewhere between about 4% and 40%. The report cautions that “there is great uncertainty” concerning cost. Per kilowatt hour the cost is said to be 17-22 cents.

San Francisco uses about 5800 million kilowatt hours of electricity a year. Electricity usage is increasing. With electric vehicles, demand seems likely to grow even faster. Today about 28% of electricity consumption is residential. Very little electricity is generated locally. Despite much crowing about, and spending on, solar arrays, solar supplies just a tiny fraction. While much more solar could be installed, good locations are taken and returns are diminishing. Wave power? Well, maybe, but the cost is very uncertain, and waves, too, would supply only a small fraction of what is consumed. What else is there? Re-opening the Geysers is one possibility, i.e. geothermal.

Another listed generator is “electric, steam and natural gas.” This may also be called “combined heat and power,” which is estimated to cost $191 million capital cost. Renewable? Gas? $60 million is proposed to be spent for natural gas — how is that “renewable?”

What else will be robustly, and locally, built out? Stay tuned; much is undecided.

Is all this just a passing fantasy of city bureaucrats and officials? Is the city serious about providing its own local and “renewable” electricity, or is this bluster of green good intentions? The Board of Supervisors has been intent on creating a CCA (community choice aggregation entity), as Marin has. Bureaucrats have named it CleanPowerSF (note: not using the word “renewable”). Just what it will be, and how expensive and intrusive, remains unknown. All that seems sure is that City government will grow, providing electricity to customers once served by PG&E. A first step to public power and kicking PG&E out of town? Perhaps.

For this year, residential customers in San Francisco may become customers of CleanPowerSF, Phase One. Not all customers will be invited. The Westside is considered less enthusiastic, so homeowners here may not receive invitations. (If you want to join, there will be a way.) For those who do receive invitation notices, unless you opt out, you join. If you join, how much more will you pay for electricity that is said to be 100% generated by renewable sources? That depends on what your monthly bill is. Your overall gas & electric bill will exceed what you would pay to PG&E by some 15% and 27%. Here are examples, which, unfortunately, include an unknown gas component: 288 kilowatt hours (kWh) of electricity for which you would pay in your electric and gas bill $76.76 to PG&E, you will pay $21.21 more if you are enrolled in the CleanPowerSF program. But that electricity usage is less than most household use in a month. If you use 406 kWh and would typically pay PG&E for both electric and gas $127.51, then if enrolled in the city program you will pay $29.86 more; if 606 kWh paying a PG&E bill of $237.29, then you pay $44.56 more for 100% renewable; if 1122 kWh is your use, paying PG&E $542.43, under the CleanPowerSF program you’d pay $82.50 more. As you use more electricity, your “green” premium falls as a percentage of your bill. (It’s a city program; no one claims that it makes sense.)

$19.5 million must be appropriated by the Board of Supervisors to finance the launch of CleanPowerSF. While not yet done, the Board has pushed SFPUC to move this. The program also benefits the poor; this builds in a constituency. It gives $2 million to GoSolar (another constituency). Energy efficiency receives a couple of million.

The SFPUC’s own consultant disses the CleanPowerSF phase one program as “not competitive, achieves no jobs, no security; very similar to PG&E proposed ‘Deep Green’ rate…except more expensive.” The consultant advises, accelerate the robust local buildout, include Hetchy power (which is clean but not renewable) in the mix, and buy RECs, renewable energy credits, which are modern day indul-
gences—I sinned, but paid for good works.

In other words, consultant sez, don’t put your toe in, jump in! What’s a billion-and-a-half in SF? Be roBUST!

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

February 2013

Guns and Hoses.

In September SFPUC sued to evict the Gun Club that has aimed at Lake Merced for nearly eighty years. The Club’s lease dates from 1934. Lead shot and clay pigeons pooped up the Lake, and should be cleaned up. But the Club has not taken responsibility. For many years its month-to-month lease was handled by Rec & Park. Insurance? Maybe.... Assets? Nyet. So after years of kicking the can down the road, legal action was filed. Well, formally. SFPUC quickly settled.

What a mess the settlement is. Incomplete sentences (look who’s saying!), inconsistent intents—it’s a waffle shop.contamination at the Pacific Rod & Gun Club

Perhaps the surest thing, though no certainty, is that the ratepayer will end up paying for most of the cleanup, which today is priced at over $10 million. Big surprise, huh? SFPUC has become the dumping ground for all sorts of financial follies in this city of yucks. Want to bestow “community benefits?” SFPUC. Want to bail out Rec & Park? SFPUC. Whether it’s solar silly or zapping putrescent PG&E, the ready answer is the department that does not need voter authorization to sell its bonds: SFPUC. Hose the ratepayer.

A new 43-page lease modernizes the lease agreement. In it the City admits that there are no known defaults to date; did the Club default by polluting and failing to remedy that pollution? The Club agrees to indemnify City for the deposit of hazardous materials after the effective date of the new lease. ”

So what does the settlement call for? Surprise (not): the Gun Club stays, for now. But the City may terminate it later; the settlement tries to make doing that simpler. Yet it does so by substituting a 90-day notice period; remember, this was a month-to-month lease. A 1934 indemnity clause is retained so that the City may try to recover insurance money. A new 43-page lease modernizes the lease agreement. In it the City admits that there are no known defaults to date; did the Club default by polluting and failing to remedy that pollution? The Club agrees to indemnify City for the deposit of hazardous materials after the effective date of the new lease. The Club’s buildings are to be inspected, and brought up to Code. The Club is to carry $1 million environmental pollution liability insurance.

How much is rent? Ten thou up front security deposit, then $5000 per month.   

Sand Plan.

Ocean Beach is eroding. The ocean is rising. Already road surface and parking areas have been devoured by the ocean. But what is far more critical is buried: expensive, fairly new, sewage infrastructure that runs under Great Highway. This stores sewage and storm water, so the Oceanside plant is not overwhelmed when rains are heavy. Nothing is visible, but if the ocean erodes enough of the beach key infrastructure will be ruined, and will need to be rebuilt inshore—at much greater inconvenience and expense. Already most of the city’s sewage is treated on the east side of town (at Southeast, in Bayview), and the east side is not going to take more s—-.

What to do? There is an Ocean Beach Master Plan, created by SPUR, which contains some ideas. One is “managed retreat,” popular with Greens, which lets the ocean have its way. The master planners were, however, persuaded to temper the impulse to “let it go” so that the sewage infrastructure is preserved for a reasonable—or less unreasonable—useful life. Planners decided to protect the infrastructure through 2050, forty more years.

Forty years may sound like a lot today. But it means moving soon towards figuring out what to do, and laying the groundwork.

Along comes what may be called the sand plan. In bureaucratese, it is the San Francisco Littoral Cell Coastal Regional Sediment Management Plan. (Are bureaucrats paid by the word?)

The idea is to move sand from the site of surplus to that of deficit. This summer three hundred thousand cubic yards were moved from northern Ocean Beach to southern, where beaches are eroding.

Time will tell whether the sand protects the beach. Trouble is, when a southwesterly storm combines with high tides the new sand may quickly be swept into the ocean. The trucked sand is smaller grained stuff, more easily swept away. After years of quiet the ocean can suddenly turn ravenous. Mounds of fine-grained sand that grace the southern beach for a few years may be gone overnight, in one storm, providing little protection. Then, in emergency mode, the bureaucrats haul in big rocks, which deface the beach.

There are other coastal plans further south along the California coast. Ventura/Santa Barbara have one that recommends an artificial reef. These are said to enhance biodiversity, provide better surfing and recreational opportunities, and form a wider beach opposite the reef. That sounds like something that might protect sewage infrastructure. Yet so far here the idea has not caught on. Re-name it? “Artificial reef” doesn’t cut it? How about “biodiversifying reef?”

“Wee-sip.” 

The $4.6 billion Water System Improvement Program (WSIP; pronounced “wee-sip”) is two-thirds complete, according to officials. With $2 billion more to spend the program is looking shaky in reaching its goal of “on time, on budget.” Indeed, on time is not going to happen. The largest project, which ten years ago was to be completed by 2009, still has five years to go. Its cost is up, too. Calaveras Dam is proving to be as sinister as its name.

The program’s contingency—the millions set aside to cover change orders—is drained. Four years before construction work wraps up.

Overruns are not unusual in public works construction. When it asks for bids the public entity must describe the underground conditions to be expected so that multiple contractors can bid, ensuring competitive prices. If actual conditions differ from what is described, then the contractor claims for extra compensation for what are called differing site conditions.

At the site of the new Calaveras Dam, a hillside turned out to have undetected ancient landslides. More of the hillside must be excavated. The change order will be for about $133 million.

Two tunneling projects are also encountering troubles, although fortunately the overruns expected will cost much less.

When the Sewer System program (SSIP) begins, differing site conditions may not cause such a huge overrun as Calaveras, but there will likely be more of them. It is hard to know what is underground in a city like San Francisco. Records are kept, but prove unreliable. The sewer work is expected to cost San Franciscans three times as much as the water work is costing. Rates are going up. Overall a typical monthly cost for both sewer and water is expected to ramp up from $76 to $264 in 2032). That is, if costs come in as expected.

The keystone of the water system, Hetch Hetchy Reservoir, has survived a first attack, Prop F. But the promoters will sue, hoping to achieve their aims through the courts, or perhaps through Congress. Should these opponents of Hetch Hetchy succeed, the cost of water will rise much more.

Water and sewer affect everything. Every business uses these services. As a customer, you pay.

Up, up and away! 

The Water Enterprise’s budget will rise nearly twenty percent this next fiscal year if officials get what they want. This space has warned that costs are rising rapidly, as must rates. Next in line: sewer charges; $6.9 billion is to be spent fixing sewers over twenty years, most of it during the next decade. If the work escalates as has the water work, the sewer work will grow to nearly nine billion dollars. But expect it to grow more: much more of the work will be under San Francisco streets, constituents will be noisier, and the water work’s scope of work was reduced considerably, while rising in cost. SFPUC is without a meaningful brake. Since 2002, when voters issued blank checks, other city departments have to get voter approval before undertaking sizable capital work, but not SFPUC. Whee.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

December 2012

Two Steps Back

CleanPowerSF.

The Board of Supervisors has advanced public power by endorsing CleanPowerSF. Progressives won, and also added an extra: a “robust” program is to specially accommodate low income and non-English speaking residents. Participating customers will spend an average of about $18 per month extra so that their electricity is claimed to be “100% renewable.” Bureaucrats are to make sure that low income customers feel welcome. This includes outreach in the customer’s preferred language, lower rates (20% off), and a smaller penalty for changing provider. Ice that cake!

How much more renewable energy generation will CleanPowerSF add? The promise is, “For every kilowatt-hour of energy program participants consume, an equivalent amount of renewable energy is produced.” Sure, but would the renewable kilowatt have been generated anyway? Is this a feel-good program for a city that excels in righteousness and superiority? Does renewable generation really rise, and how much—or how little? Is the program really about sticking PG&E in the eye, and laying the groundwork for public power? When will City government refrain from spending and expanding?

SFPUC adds another $2.2 million project to its Water System Improvement Program with this (non-)explanation: “The costs for those activities were not included in the WSIP budget because it was assumed that they would be covered in the Water Enterprise operating budget …” Why were the activities—monitoring the restoration of vegetation at construction sites—not included in the operating budget? No need to say.”

Affordable housing.

Once private builders provided the City’s housing stock. The market dictated what to build, and competition controlled prices.

Could that work today? Probably not if the City continues with its recent practices and policies.

Housing in small, desirable San Francisco has long been expensive. After moving to the city at age 23, renting and living in communal houses, in 1983 my wife and I bought our first home, a two-bedroom townhouse, for $162,500. In today’s dollars that equates to $375,400. Today that sum would buy little. But the interest rate on our first mortgage was 12.5%. The monthly mortgage payment, $1650, is today’s equivalent of $3815. Today a mortgage of $630,000 for a home costing $700,000 with a ten percent down payment—less than the twenty percent we put down—requires monthly payments of $2829.

When I was a first-time home buyer one was on his own. You engaged a realtor; you applied to a bank for a mortgage loan.

Were I a first timer today, I would start by taking the City’s home buyer education course. Then, the new home buyer applies to the government. Buyer is told how much he or she can afford, and is given an assistance package—help with the down and with closing costs. Government dictates the mortgage loan terms. The actual home may be built with public funds collected from developers to build affordable housing. About half of the housing built here is “affordable,” which means publicly assisted.

Is this public involvement necessary? An improvement?

Or, does government first inflate the cost of housing, then, find housing too expensive, fund “affordable” housing? Government increases cost with red tape and delay, further increases cost by requiring that a portion of units be “affordable,” or, alternatively, the developer pays into an affordable housing fund so that the government can build.

Surely all this increases the power of government. But what does it do for the cost of housing? In the long run is housing more affordable?

San Francisco’s affordable housing efforts have been audited, receiving mixed results. An audit found that affordable housing is not properly marketed, sits empty, and those who cease to qualify often over-stay for long stretches. (No doubt bureaucrats are “too busy.”)

Whenever the government is involved, worry about favoritism and corruption, not to mention waste. Today you get put on a list and have a long wait. Your name may be “lost.” Or, having the right stuff perhaps your name rises on the list.

One purpose of affordable housing is to help the homeless. Another is to keep San Francisco diverse. Perhaps government must be involved in achieving these goals. But must government help the first time home buyer?

If San Francisco is to balance its budget and slow the growth of government spending it needs to do less, and should do what it does more efficiently.

Clear as mud.

SFPUC adds another $2.2 million project to its Water System Improvement Program with this (non-)explanation: “The costs for those activities were not included in the WSIP budget because it was assumed that they would be covered in the Water Enterprise operating budget but due to the immediate need to fund these activities, the WSIP will cover the cost of that work through October 2013.” Why were the activities—monitoring the restoration of vegetation at construction sites—not included in the operating budget? No need to say. This is what passes for City government transparency?

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

November 2012

Keystone FolliesHetch-Hetchy Dam

Nearly one hundred years ago engineers set out to bring water from the far-away Sierras to the newly rebuilt City, which had burned up in the aftermath of the Great Quake. Imagine bringing water from so far away, through many dozens of miles of tunnel and buried pipeline. Then imagine not having to pay for pumping millions of tons of water; gravity would do the work. A dam high in the remote mountains, the keystone of the system, would store sufficient water, and would propel the whole wondrous waterworks.

Now San Franciscans are asked whether to begin the process of removing the keystone.

We San Franciscans are richer than almost all cities of our size or larger, and do we spend! Perhaps our free spending is part of our attraction. Rents are high; there is great demand to live in our fair town.

Spending three-quarters of a billion on City Hall, or $8850 per resident per year on City government ($7.3 billion for fiscal 2012-13), or for new sports venues, libraries, and parks is one thing. To spend an extra ten billion dollars in an attempt to restore a remote valley that is the keystone of our elegantly-engineered water system, to remove that keystone, would be folly. ”

Spending three-quarters of a billion on City Hall, or $8850 per resident per year on City government ($7.3 billion for fiscal 2012-13), or for new sports venues, libraries, and parks is one thing. To spend an extra ten billion dollars in an attempt to restore a remote valley that is the keystone of our elegantly-engineered water system, to remove that keystone, would be folly.

San Francisco is most of the way through updating our water system. By the time we are through (in 2017), water rates will have tripled. What was inexpensive, as well as extremely pure and fine tasting, will be average priced, and will be supplemented with less pure groundwater. The 1920s era engineering has served marvelously; soon it will meet modern seismic standards.

San Francisco’s Water Enterprise already has over $3.2 billion of debt outstanding. It is about half done with paying for the updating.

The next step—the reverse side of the same coin—is to update San Francisco’s old sewer system. Most water city dwellers use goes down the drain. Stormwater adds in. Updating our water system is costing the City about $2 billion; updating the sewer system will cost ratepayers about $7 billion.

After all this updating, the portion of the average San Franciscan’s income that pays for water and sewer doubles—to about 2.5%. This is at the limit of what is considered affordable. Should we add to that burden by tearing down the system’s keystone?

While some readers, and most San Franciscans, do not pay water and sewer bills directly, make no mistake: everyone pays. Rents eventually reflect the increased cost. Everyday prices that businesses charge must reflect the cost of utilities. Directly or not, no one escapes paying for water and sewer.

Proponents of the Hetchy initiative will claim that it calls only for study. Do not fall for this. The clear purpose and intent is to require the draining of Hetch Hetchy reservoir. This wheeled horse is not empty.

Recycled water will substitute? Come on. The enviros and NIMBYs have already hit the delete key on the City’s first recycled plant. The plant was to be built at the site of a dump at the far southwest end of Golden Gate Park. Seven-eighths of that plant’s recycled water was to go to irrigating the Park. How green good is that? San Francisco has been fooling with recycled water for more than twenty years, yet its purple pipes remain bone dry. Why? Face it: In a city like San Francisco recycled water is uneconomical, insufficient, of undesirable quality, and makes little sense—except as an expensive symbol. NIMBYs abound. At the very most, and at great cost, recycled water might provide one-tenth of the City’s water needs.

Conservation of water is also urged. We San Franciscans do conserve. We use much less than we did at the beginning of this millennium. Our per capita demand for water is lower than anywhere else in this country. Can we lower it further? Probably—a little. Officials have already committed to do that. We cannot grow our population and develop without doing that.

Civilized society requires water. Trees and parks and fine eateries don’t survive when parched.

Nor are we going to magically take the same water just further downstream. Where would it be stored? Low country water would need to be filtered; that would require a huge new investment. Our water system is designed as a gravity system; it relies on Hetch Hetchy.

It would be folly to discard the keystone of the water system on which San Francisco has relied for eighty years, and just updated.

Nor would it be “green.” Building all the needed replacement infrastructure would not only cost a fortune but also would heavily impact the environment. Lost permanently would be the forty percent of electricity generated by all the water released in controlled fashion from behind the dam at Hetch Hetchy. Wind and solar is not suddenly going to replace that. We have been spending to encourage those green sources for years, yet what has been erected supplies nothing near forty percent of the electricity that would be lost. Unlike water usage, demand for electricity continues to grow.

If you think that a City can always somehow survive, look at Detroit. Consider New Orleans. Cities can and do have near death experiences. Enough bad choices made, plus one big event, can decimate an urban area. Cities are vulnerable. Might San Francisco some day suffer a big event?

It’s fine for San Franciscans to be dreamers and innovative. We need that, and our innovative companies are the vanguard of the future. But remember that many fail. The market decides winners and losers. We translate desirable bravado to the public realm at the City’s peril. Water is not where you take big risks.

Keep the keystone.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart. Feedback: lawrence@westsideobserver.com

October 2012

Rate Rackets.

We San Franciscans reflexively run counter to the “less enlightened” heartland of these wide United States. Elsewhere, in response to the Great Recession, government is petulantly shrinking.

Here government grows. Seven-point-three billion is being spent by San Francisco this fiscal year, up from the previous year’s six-point-seven. Water rates doubled in the past five years. To improve the water system we are spending about two billion dollars of San Francisco money. Plans are to spend seven billion dollars on the sewer system. Sewer rates are poised to rise even more sharply than water rates have.

Seven billion dollars is on the order of $8500 per San Franciscan.

While most of the sewer spending comes during the first decade, spending will span twenty years. Rates are to rise to about three-and-a-half times what they are.

Plans are to spend seven billion dollars on the sewer system. Sewer rates are poised to rise even more sharply than water rates have. Seven billion dollars is on the order of $8500 per San Franciscan.”

This massive new government program is called the Sewer System Improvement Program, SSIP. (Don’t even think about it; pronouncing “wee-sip” for WSIP, the water system improvement program, was bad enough.)

This summer our SF Public Utilities Commission is “validating” the SSIP program. The program is being proposed by civil servants who are advised by an eminent national consulting firm. The consulting firm has studied existing conditions, and—any surprise here?—has found that improvements are needed. A seven billion dollar program is recommended. The Commissioners could pare that price-tag, or add to it; but they will likely accept it.

Towards the end of the massive program, the average rate paid for sewer and water (the bill for both come together) will double as a percentage of income—average income. (For this calculation, average income is assumed to rise 3% per year for the twenty years. Good luck with that.)

While the SFPUC does at least make a show of considering “affordability,” it does so looking at “the average bill.” Like Diogenes’ honest man, Mr. average Joe Plumber has yet to be found. But certainly he or she is not a family man. Households in San Francisco often contain only one person. Perhaps a two person household, living in a smallish flat, is the SFPUC average. But if you have a family you may be a four person household, or larger. Probably you use more water than the average on which “affordability” is judged. If you do—and four people usually do use more than two—then your bills will not be proportionately higher than “average,” they will be much higher. Why? Because rates are tiered. That means that for the first three units (a quantity of water, about 2244 gallons) per month you pay at a low rate. Further water usage is paid at a high rate. Same with sewage; your bill for sewage is based on the quantity of water that you use. So if you happen to live in a household with more than the average number of people, you pay at a higher average rate for water and sewer service. While Joe Average’s bill may remain affordable, good luck if you are a family or group living in one household.

This is one reason families flee San Francisco. It is not too hard for one or two people to use little water, living in their small flat. They go out to dinner four times a week, keep only a few houseplants, and install only the coolest, greenest washers, dishwashers and toilets, receiving rebates. Or, perhaps they have their laundry done down at the corner. It is much harder to keep a yard and family using very little water. Tiered rates rocket the family’s bill into an unaffordable stratosphere.

In the stagflation of the 1970’s, property tax increases stung. In our era’s Great Recession and hobbled recovery, “taxes” are avoided, but government still finds revenue sources. It doesn’t take a Moonbeam.

Why does SFPUC consider affordability the way it does? SFPUC is firmly under the sway of the environmentalists. Enviros simply hate single family housing. Tier them down.

SFPUC did constitute study groups of ratepayers to better understand (and justify) how the upcoming massive SSIP program would go over with the public. One study group came from Bayview, one Chinese, one Spanish speaking, and yes, one, well, other. You may not be shocked to learn that the level of understanding of participants was found to be: not high. But SFPUC staff was pleased to find that as participants were educated and began to understand more acceptance of the SSIP program increased. In other words, the groups “worked.” (Hurray for us.)

Expect, then, plenty of “outreach,” to sell, ‘er educate, the public about the SSIP.

Should you live in a community affected by the sewer system work, you may receive “community benefits,” too. So important is community relations that there has come to be an assistant General Manager for community benefits at SFPUC.

This summer the SFPUC staff moved into plush new quarters. Their new, green, $200 million building is at 525 Golden Gate Avenue, and is complete with artworks and all manner of impressive innovations. Go tour it. For SFPUC it’s been quite a summer: “validating” and launching a $7 billion public works program, and moving to new offices.

San Franciscans don’t mind picking up the bill, do they?

Feedback: Steve Lawrence

September 2012

 

No Pinch in the Public Purse

Here in San Francisco we take pride in leading trends. But in over-paying public employees, we are part of a larger picture.

Throughout the country public employees command generous salaries and benefits. The twin towers of the dot com boom and 9/11 kicked the boom off. Back at the beginning of the new millennium, when a share of Yahoo sold for over $300 as analysts eschewed profits and revenues for page views, public office holders waxed generous. Money was pouring into the public fisc. Generous benefits were even easier to bestow than salary increases. Pension funds would earn outstanding returns, it could be assumed. The complacent public was too busy making fortunes—or dreaming of doing so—to question assumptions justifying assumed pension returns.

We’re exceptional! A magic land where rules are suspended. No harsh arithmetic for us. We define the cutting edge. But we don’t get cut. Do we?”

Then came 9/11. Firemen and “first responders” were heroes. No way would we not take care of heroes.

Next came the great housing boom and bubble. Heard throughout cities were loud lamentations about how public employees—teachers, policemen, firefighters especially—could no longer afford to live in the communities in which they worked. Pressure mounted for even more compensation and benefits.

Times worked to the advantage of public employees. Union reps are rarely shy about using every advantage. On the other side of the “bargaining table” were elected office holders. Rarely do they choose to alienate union reps and members. Endorsement by the firefighters’ union wins campaign workers, contributions and votes.

And so we arrived at a place that is less than “sustainable,” to use a term so favored by public workers.

The Great Recession and housing market’s fizzle makes it harder for public officials to spend other people’s money. Inconveniently, elected officials must worry about bothersome budgets. Deficits persist; one-time accounting tricks are mostly used up. (Sell city hall, lease it back?)

After years of recession, recently the median public employee makes on the order of one-quarter to one-third more than the median private employee. In San Francisco, without considering benefits, $93,229 is the average annual pay for city workers. In the private sector it is said to be $78,228, 84% of the average city worker salary. But salary tells only part of the story. City workers receive much greater benefits, enjoy more job security, tend to work closer to public transit, and receive more liberality at work. Also, the measure of the private median salary is high: eight percent do not have jobs at all, and many who receive no salary are “independent contractors,” scraping by. Were these included in the pool of private employees when median “salary” is measured, you can safely bet that median would sink.

Back in the 20th Century, city workers traded off salary for security, liberality, and benefits. As a city worker you would never
get rich, but you had job security and perhaps a less demanding employer.

Today the public employee can get rich. One police captain earned nearly $539,000 last year. More than one hundred firemen earned over $200,000. There are bound to be many households of public employees here in San Francisco qualifying for Obama’s millionaire’s tax. (Earnings are from city sources, and do not include investment earnings, rents collected, etc.)

Is this fair? Sustainable in our economy? What can be done? Once a year Matier & Ross publicize the outsized salaries. That’s something, if there is shame. Bet that elected officials will be slow to act: not only have they enjoyed—and do still enjoy—the largess, but also they are loath to alienate public union supporters and contributors. Down that road lies grief and regret.

Only when the money and accounting tricks run out will elected officials act. Then, perhaps, “saviors” like Chris Christie may be born. San Francisco seems very far from getting such religion. San Francisco lacks even an organization of taxpayers and ratepayers.

City government spends something more than $8,000 per resident per year. Although most is collected from business, each San Franciscan pays indirectly: when you go out to eat, buy groceries and gas, and pay the PG&E bill. In setting prices you don’t imagine that business fails to pass through taxes paid, as well as water, sewer, and other utility bills, do you?

Not only does San Francisco spend liberally—we all know that—but also it borrows, and over-promises, very liberally. Forbes put SF’s unfunded pension liability at nearly $35,000 per household.

It will be a cold day in Hades before San Francisco politicians embrace austerity and cut the salaries or benefits of public employees. We admire Euro social welfare, but not European austerity. We’re exceptional! A magic land where rules are suspended. No harsh arithmetic for us. We define the cutting edge. But we don’t get cut. Do we?

Steve Lawrence is a longtime utility activist. Feedback: lawrence@westsideobserver.com

July-Aug 2012

The Forever Bridge

The Sierra Club opposed the Golden Gate bridge. So did prominent San Franciscans—on esthetic, safety and financial grounds. Even the War Department doubted for a time; would a fallen bridge block entry to the Bay?

Now the elegant bridge is universally admired. What more defines San Francisco? The bridge is one of the best known structures in the world.

Color schemes for the bridge ranged from fog gray to black. One color not proposed was International Orange, now the bridge’s trademark. It came about accidentally. Primer happened to be that color, and it worked. Another color not proposed, and of course not used: gold.

Twice the bridge has been in danger of coming down: once during its construction, and again in the early 1950s. Both times wind, and a harmonic vibration that wind can cause, was the threat.

Color schemes for the bridge ranged from fog gray to black. One color not proposed was International Orange, now the bridge’s trademark. It came about accidentally. Primer happened to be that color, and it worked. Another color not proposed, and of course not used: gold.”

Yet the bridge has lasted through war, earthquake, terror danger, and even the weight of celebration. It has lasted more than seventy-five years.

The bridge is an assemblage of statistical wonders. Over a million rivets, placed white hot, heated by coal fired forges. Eighty thousand miles of spliced wire formed into strands and compacted into cables capable of supporting 400 million pounds. Two hundred and fifty pairs of vertical steel rope supporting the roadway. Towers rising 746 feet above the water, taller than the Washington Monument. One hundred and thirty thousand cubic yards of concrete poured. A south pier more than a thousand feet offshore, built despite ripping tides of five to seven knots. Anchorages weighing 270 million pounds each. The stats go on and on.

No bridge like the Golden Gate had ever been built. Mathematicians who helped design the bridge did so without the aid of any computer; all calculations were by hand, on paper.

While today we know the bridge as graceful and beautiful, that was not preordained. An early design was called “an upside down rat-trap.”

Forgotten today are the battles of personalities, and financial interests. Ferry companies were obvious losers. Shipping interests feared that larger ships would not clear the bridge. Bankers took big risks, and collected 5.25% interest, too—an amount considered high, and, by some, unwarranted. Challengers sued—and lost.

Should the reader wish to delve into the building of the Golden Gate bridge more deeply, read Golden Gate: the Life and Times of America’s Greatest Bridge, by Kevin Starr.

When asked how long the bridge would last, its promoter, Joseph Strauss, replied, “Forever.” May he be close to right.

Steve Lawrence follows water and sewer issues. lawrence@westsideobserver.com

June 2012

 

Purple Planning is a Curse on the Purse

On April 17 our water sewer and power people, SFPUC, reached out to talk about the latest plan to fill the City’s purple pipes. Purple piping conveys recycled water, which is used mainly for irrigation. But in San Francisco you may be excused if you misspeak and say “for irritation.”

It’s been twenty years since ordinances required developers to install purple piping. Still no recycled water flows through those pipes.

Not that our officials have been idle—there have been many plans. But all have dried up like a shallow pond in the desert sun.

Before the iteration recently introduced, the plan was to produce recycled water in Golden Gate Park. At the far west end, south of the soccer fields, there is a dump. Officials figured they’d improve on that by spending a hundred million and change on a state of the art plant producing high grade recycled water that even our picky Rec & Park Department would accept. But Park neighbors objected. “No Factory in our Park” became the war-cry, although 7/8ths of the irrigation water will be used in the Park.

Perhaps “boondoggle” is too strong a word here, but when costs rise as they have, and purple piping stays dry for as long as it has and will, what is the better word?”

As officials lately explained, rather than face a certain lawsuit and endless resistance with uncertain outcome, they returned to the drawing board. They found that while space for their proposed purple plant was somewhat lacking at Oceanside Wastewater Treatment facility near the Zoo, it could be found at the Armory next door. They approached the California National Guard about taking a bit of that space, and cobbled together enough in which to stuff the proposed plant to produce recycled water.

What is recycled water, anyway? Briefly, recycled water is what comes out when sewage goes through three processing steps. Sewage is treated to primary level (step one) by simply allowing solids to sink, and lighter stuff (scum) to rise, skimming those off. Under the Clean Water Act of 1972 sewage must be further treated to “secondary” levels, and then the “effluent” is discharged into the Bay and ocean. Alternatively, it can be treated to a tertiary level and become “recycled water,” usable for irrigation. In San Francisco’s case—ever special—the level of treatment will be “advanced tertiary,” which adds a process called “reverse osmosis” (don’t ask), included because there are “sensitive plants” and pools, etc. in Golden Gate Park. Yes, it’s as expensive as it sounds.

So will all of the purple pipe finally be filled? No, actually much will stay as empty as it has been these past twenty years. Goals have been downsized.

Ten years ago the plan for the Westside was to build a plant generating ten million gallons per day (mgd), a whole lot, for the estimated cost of $110 million, or 11 million of capital cost per mgd. Six years ago the plan became to produce 4.4 mgd at a higher capital cost of about $200 million. More recently the plan became to generate 2 mgd—one-fifth of which is surplus capacity—for a capital cost of $156 million. If the surplus goes unused, the capital cost per unit (mgd) will be almost $100 million, about nine times what it was to have been a decade ago. As reconfigured, the new plant will be a two story affair, and will have underground storage. SFPUC believes it can negotiate for the Armory slice.

The outreach meeting was notable for all that is yet unknown. At the new location, will the cost rise? Which streets now need to be torn up for a pipeline to the Park (avoidable under the old plan)? Will operating costs rise? How many permanent employees are required? What is the cost of the “lease” from the Armory? Cost concern seems an orphan—officials just want it done, at any price.

Even before this latest change to plans, recycled water was to cost multiples of what groundwater and Hetchy water costs. Ratepayers will pay dearly to satisfy 2% of the City’s water demand. To date, planning the Westside Recycled Water project has cost about $10 million. That doesn’t include master plans of the 1990s and last decade.

So when will the Westside Recycled Water project be done? One thing that is known is that the schedule slips. The environmental review process re-starts, and is expected to take 2.5 years. Commencement of construction slips about three years, until 2016. While it’s a guess, construction of the Westside Recycled Water plant should finish up in 2019.

Perhaps “boondoggle” is too strong a word here, but when costs rise as they have, and purple piping stays dry for as long as it has and will, what is the better word?

Steve Lawrence follows water and sewer issues. lawrence@westsideobserver.com

May 2012

Beach Master

A master plan for Ocean Beach is being prepared. Like the ocean itself, it generally soothes the spirit, yet may hint at wildness and trouble. Three-and-a-half miles of surf, sand, and sometimes, sun is the wild west of our worldly city.

A myriad of public agencies and private groups are interested in Ocean Beach: Rec & Park, the SF Public Utilities Commission, which operates sewer infrastructure, the Zoo, Public Works with the Great Highway, and federal and state agencies from Ft. Funston to Seal Rock. Private groups include surfers, environmentalists, anglers, park protectionists and more. To tame all these, an outsider of sorts, SPUR, came to the rescue to referee and compile The Master Plan. SPUR is San Francisco Planning and Urban Research, a downtown group specializing in long-term planning.

Will the sewer infrastructure really be protected? A storage tunnel said to be essential to the plant is vulnerable. The plan protects it with a berm of cobble and sand, and then with a hard buried seawall. As the tunnel is quite deep, it is hard to imagine how the buried seawall can be constructed. The cobble and sand berm seems cosmetic, vulnerable to the incredible wash of storm surging ocean water.”

Abundant opportunity for public input was provided. Despite that, there is fair chance that the reader has never before heard of the effort.

Planning is a balancing and juggling act. Twenty-five years ago San Francisco invested heavily in sewer infrastructure out at Ocean Beach. That investment is at risk of destruction by ocean storm waves. Environmentalists demand that threatened bird species be protected, and wish the remainder of the beach to be as natural as possible. Bikers, fishermen, surfers, kids, hang-gliders, residents and many more weighed in with their own interests.

The draft plan that SPUR has published first identifies values to be advanced. They conflict with one another, so the trick is to advance the most, while keeping costs reasonable and everyone happy—or not too unhappy.

The values the plan incorporates include protection of infrastructure, ecology, access, recreation, wildness, and cooperation among agencies and groups—what might be called sharing. Ecology includes protecting bird species that rely on the beach for nesting and reproduction, as well as allowing nature to take its course and thrive despite human presence.

The draft plan brims with bureaucratese, so here is a super-summary:

• South of Sloat Boulevard the Great Highway will close to general traffic. The Great Highway will be re-routed to run just east of the Zoo. Why? The rising ocean threatens; in the winter of 2009-10 it took part of the road. Some day it will take more. The idea here is to bow to the inevitable, while working to create better access and connectivity. The philosophy is called “managed retreat.”

• North of Sloat the Great Highway will be reduced to two lanes. The oceanside space created will be used for amenities, for a promenade for bikers and walkers, and for dunes.

• Sand will continue to be placed, and dunes re-planted with native plantings—no more ice plant. Dunes will be allowed to migrate eastward (inland). Sand ladders for access, bike lanes, and parking, will be provided, and rest rooms.

• In the north, south of Land’s End and the Cliff House, where the parking area is wide, permeable paving and plantings will create a more natural and inviting space, while the ability to host events is maintained. Bikes and pedestrians will get better access.

• The sewer infrastructure, which is mainly just south of the Zoo, is to be protected with cobbles and sand, and a buried seawall. Instead of boulders, which have been dumped when the ocean threatens, as it did two winters ago, softly rounded cobbles would be imported and encapsulated with sand to create gentle dunes as barriers against the ocean’s wrath. Sand would come from the shipping channel courtesy of the Corps of Engineers, hopefully. No one is happy with the dumped boulders and rubble, a blight which would be cleaned up, or at least buried.

The cost of the plan is estimated to be $343 million. The work required will not be done all at once; it will be done over a span of many years.

The plan has good balance. The plan’s weakness? Will the sewer infrastructure really be protected? A storage tunnel said to be essential to the plant is vulnerable. The plan protects it with a berm of cobble and sand, and then with a hard buried seawall. As the tunnel is quite deep, it is hard to imagine how the buried seawall can be constructed. The cobble and sand berm seems cosmetic, vulnerable to the incredible wash of storm surging ocean water. Yet engineers can be imaginative. One hopes that where there’s a will, there’s a way...that is not overly expensive.

Steve Lawrence follows water and sewer issues. Feedback: lawrence@westsideobserver.com

April 2012

 

Dissembling Government and Society

Civil society has come to mimic lawyers. Little lawyers, everywhere a little lawyer. No one more so than bureaucrats and those who work for government.

Nothing is quite as slippery as the English language. Twist it, shape it.

A few years ago I encountered a city attorney who found the word “four” ambiguous. Four could mean five, or even six or seven. A “four” year term of office might expand, if it was convenient.

That city attorney promised me a written explanation of how this feat was achieved. I looked forward to receiving it. Promised was a demonstration of verbal gymnastics beyond what I had imagined possible. But despite many follow-ups, I never did receive that explanation.

City attorneys need not deal with “the little people,” mere members of the public. Promises made are unenforceable, and like bureaucratic expressions generally, slippery.

Most bureaucrats take themselves to be above the law, unaccountable to the little people of the general public.

One minor bureaucratic body is called Ree-bok, the Revenue Bond Oversight Committee (RBOC). It is charged with overseeing the expenditure of billions of dollars of ratepayer money borrowed through the selling of bonds. Although this group is paid for its services, and would seem to have a significant responsibility, and although hardly any members of the public attend to its doings, still it pointedly ignores or actively puts down those few who do try. Even the lowliest bureaucrat wants to feel powerful and superior.

Not only does RBOC diss those members of the public who try to approach, but also it dishonors its own simple bylaws. Bylaws require that each January, RBOC is to elect officers and adopt an annual report. Simple. But this year RBOC may have decided that “the first meeting of the year” could be the first meeting after Chinese New Year. Are words not a wonderful thing to twist and shape?

Imagine: the group on whom ratepayers rely to make sure bond funds are properly spent in accordance with law flips off its own bylaws. That’s accountability, SF style.

Each appointee to a public body such as RBOC takes an oath. Each knows that there are open government laws to encourage public participation in the decision making process of public business. Those taking their oath and accepting a public position should understand that extra listening and patience will be required. Why, then, do almost all “public servants” come to despise, avoid and put down members of the public who come before them?

US society has come to have low regard for rules and law, and ever higher regard for power. Words are ignored or manipulated. Get a lawyer, or be like one. Power up.

So it is with the “highest” of us in SF. Fourteen months ago when our Mayor wished to be appointed interim mayor, he pledged that he would not run for a full term. Mere words! With fingers crossed, and “Run, Ed, Run” encouragement, those words were left behind. The electorate’s verdict? Ratified, decisively. Every child, every citizen, every appointee was instructed in the importance of words.

Words have become plastic and disposable. Even the most clear and definite of them: “four”; clear and simple bylaws; a solemn pledge to the public and fellow public officials.

In governance—and I’ll contend in the wider society, too—we no longer expect words to have much meaning. All is relative.

As government enlarges, words multiply...and mean less and less.

According to the Supreme Court, our society’s highest interpreter of words, the Constitution, properly viewed, has “penumbras.” Penumbras are that faint ring that one sees around a winter moon, a sort of aura. If words are inconveniently absent in the Constitution then interpretation of penumbra makes law. Supreme justices just make it up. Does this differ materially from reading tea leaves?

Led thusly, perhaps it is little wonder that we citizens, bureaucrats emphatically included, have come to disrespect words, devalue honesty, and value only position and power.

Feedback: lawrence@westsideobserver.com

March 2012

Growing ExpansivelyHetch-Hetchy Dam

Government expands. Let’s look at our providers of Water, Power and Sewer services, the San Francisco Public Utilities Commission (SFPUC), an “enterprise department” of the City. Its recently published annual report helps tell the tale.

Over the past five years, spending has risen at a pace of about 6.5% per year, nearly 36% in five years, to $695 million. While not growing quite as rapidly as China’s economy, this city agency, about to occupy a spiffy new headquarters building, is growing briskly.

More is coming. Soon SFPUC launches its Sewer System Improvement Program, a $6-8 billion work updating city sewers and plant. In the upcoming fiscal year $236 million is to be spent.

This year SFPUC expects to launch its CleanPowerSF program to partially displace PG&E as provider of electricity. CleanPowerSF will offer “clean” electricity generated solely by renewables or hydropower for a premium of, hopefully, $7-15 per month.

The Sewer System program and CleanPowerSF are just two of many initiatives and programs. GoSolar, building its super-green headquarters building, reclaiming Lake Merced, recycled water, gray water, community benefits, energy efficiency, and many other programs have been fueling growth.

SFPUC employs 2300, not quite one-tenth of the City’s workforce. This figure does not include the many consultants, contractors and others who are not employed as city employees, but are doing the agency’s work.

To illustrate the imperative of growth, let us examine one initiative from this past year: the updated Electricity Resource Plan of 2011.

While one can be cynical about bureaucratic plans, hundreds if not thousands of which cram shelves of our main library’s government information center, and hold down City Hall (in danger of floating skyward on hot air), some plans do lead to action. Surprising action.

The updated Electricity Resource Plan (ERP) sets the mile-high goal of achieving zero greenhouse gas emissions by year 2030. Zero. You can’t say our bureaucrats don’t dare to aim high.

In order to clear the bar, big leaps are required. As PG&E cannot be counted on, bureaucrats and progressives feel it needs to be replaced. The City must “control its own destiny.” To replace PG&E means public power. CleanPowerSF is the first step.

Other actions required to eliminate greenhouse gases by 2030 include building renewable generation facilities such as the solar arrays blanketing Moscone Center, the Sunset Reservoir and many other City facilities. The building of generation facilities, called by progressives “robust local buildout,” does not make much financial sense. The City’s Hetchy system generates electricity cheaply when water stored behind the Hetch Hetchy dam flows west to local use and storage. Surplus electricity is sold to irrigation districts at cost. Instead of using that cheap electricity, the City builds expensive solar here in the City. It replaces cheap clean electricity with expensive renewable power. It’s a plan only a bureaucrat could love.

One reason the bureaucrats do love the scheme is that it helps generate a fund of money they can use. By selling more to the irrigation districts, there is more money for GoSolar and similar subsidy programs controlled by the bureaucracy.

Understand that there are two pockets to the Hetchy water/power system: one holds debt, the other holds funds for bureaucrats to dispense. The system has been divided into two parts, call them East and West. West is deeply in debt; East holds a fund of money. While we are told that GoSolar is paid for entirely out of the proceeds of selling electricity – and the implication is: not out of ratepayer funds – that is an artifice. There is one system that produces two goods, water and electricity. If the proceeds from selling electricity are diverted, as they are, then the “cost” of water is that much greater, and the ratepayer pays that much more for it. There is no free lunch; neither are GoSolar and other subsidies free. The bureaucracy makes subsidies appear free.

Thankfully, over the next four years one long-standing subsidy is to diminish. Now City facilities receive Hetchy electricity at no charge, or for a fraction of what the electricity costs. Hetchy Power (the East part) subsidizes City Hall, General Hospital, MUNI and more. One reason that SFPUC subsidizes energy efficiency is that City facilities lack incentive to reduce power consumption; they do not pay, or pay little. It’s a perfect bureaucratic double play: one subsidy leads to another, and to double jobs and power for bureaucrats.

Is robust expansion of SFPUC best? Its recent annual report is all roses. But there are bugs in those flowers. Revenues have been unexpectedly low. Inevitably this will push utility rates higher. Rates have already risen steeply--for water, doubling over five recent years. On the power side, even with the big water flows of these past few years, the power reserve fund is plummeting to negative territory; this is why the Commission recently decided to modestly reduce subsidies. Utility rates are going to rise, and steeply. The Commission President recently acknowledged that he expects resistance to upcoming rate increases, and possibly political push-back.

The reader must remember that utility rates affect nearly everything. It is not just your (modest) utility bills. From your breakfast coffee to what you pay for a nightcap at the local pub...almost all spending is affected when utility rates rise. Every business pays utility bills.

Should the City spend freely so that SF is “a green leader,” the better to attract young, smart, connected workers that propel high tech business? Or will SF become such a costly place to live and work that competitive edge is lost, along with tax base and diversity?

********

Who leads SFPUC next? Ed Harrington has announced his intention to retire. Harlan (repaint-the-new SUV) Kelly seems a chum of the Mayor. Despite his unfortunate newspaper debut, Kelly might work out well. The $5000 paint job was probably a cost effective lesson; Kelly is not a slow learner. Further, he is a people person. He would probably leave intact Harrington’s team of financial wizards. And he knows the organization. On its plate are big programs; thorough knowledge counts.

Feedback: lawrence@westsideobserver.com

February 2012

 

Hang Those OrnamentsMoney Christmas Ornament

Ever noticed that the little extra expenses add up? How tempting is the seemingly insignificant little extra. What a pretty ornament!

Not that we don't already have too many.

It's the same or worse at the municipal level. Let's do something nice for those in favor.

Examine almost any agenda for a Commission meeting of the SFPUC and you will find ornaments, large and small. A large ornament can be a whole program, such as the CCA program (community choice aggregation), the holy child of progressive Supes. In October CleanPowerSF (the child's name) advanced. Displacing PG&E, beginning about July, this City program is to sell "100% clean" electric power to a target of 75,000 green San Francisco households. The additional cost will be about $7-15 per month added to the household's electric bill. Public power advocates are tickled pink.

But the majority of ornaments are smaller, are hardly noticeable on our already over-flowing municipal tree.

For example, in October the SFPUC (your water, sewer and public power supplier) agreed to buy "conservation credits." Is this like Al Gore's indulgences? Warm warning Al flew about the globe, using much energy while he railed against greenhouse gases and rallied the greens. To make up for his carbon-spewing ways he purchased carbon credits or offsets (indulgences), which made it all copacetic.

Similarly, SFPUC ornaments its tree by buying credits for "up to" $550,000 from Wildlands Inc. What is Wildlands Inc? Its website says it provides "custom mitigation banking solutions." The website pictures a handsome blue heron. "To restore, enhance, preserve, and manage...in perpetuity." How warm and wonderful.

Did SFPUC competitively bid to acquire this custom mitigation banking service? What is the service, exactly? It is hard to know; this ornament was authorized without discussion by the SFPUC Commission. The matter was on the consent calendar, meaning discussion was considered unnecessary.

And so it routinely goes. At the same meeting $100,000 was authorized for a pilot project to enhance water efficiency in community gardens. There we go; we spend $100,000 perhaps to teach gardeners how to water better? Also, an MOU (memorandum of understanding, a bureaucrat's contract) was authorized with the Arts Commission. A small water district just south of the City had its $106,000 contract increased by $209,000 to speed recycled water for Harding Park.

Of course compared to the $300 million operating budget for our municipal Water Enterprise—and to debt spending of that is perhaps double that this fiscal year—these October ornaments are dinky. With all its spending, how tempting it must be to steer a little here, a little there, to worthwhile groups and interests about whom feelings are warm. Cheer, cheer! For bureaucrats it can be Christmas all year! Even better when the spending is debt spending; we all know how using a credit card is so much easier than parting with cash.

Just as your little extras can add up to bloat your budget, so too do the tempting ornaments of public spending boost the rates you pay for water and sewer service. Bills for water and sewer are headed considerably higher. In a dozen years it is expected that the typical bill for sewer service will be about 3.25 times what it is today. Rates for water have doubled over the past five years; and over the next five years your water bill will increase by more than it has these past five.

When does the tree over-laden with ornaments tip over? When does a plucked public arise?

Have a merry holiday season!

Steve Lawrence is a longtime utility activist. Feedback: lawrence@westsideobserver.com

December 2011

 

"Diapers and politicians should be changed often, and for the same reason."

No, "noisy cries" is not the reason – although surely these will be heard. In the one case, loud and guileless; in the other, soft, seductive, sibilant and full of guile.

What politician can resist promising supporters what they want? A public servant who promotes the "general welfare" receives scant thanks, few contributions, and probably not many votes. "Support me and mine" is the overwhelming demand of today's voters. Successful politicians avoid saying no.

How might society encourage politicians to promote sound public policy rather than pay-back politics? In today's world it is hard to imagine.

In times past, perhaps there were larger problems, and less largess to spread, propelling real solutions. In the Great Depression the economy did not just fail to grow; it fell off a cliff. Unemployment reached 25%, and with households having but one breadwinner, unemployment was catastrophic. The safety net was flimsy. Attending to urgent problems was not optional. The size of your slice of the pie was not as important as whether there would there be any pie.

Let's hope we don't return to those days.

We need to stop accepting interest group-oriented, pay-back politics. It is destructive. Oh, it may achieve urgent goals in the short run. But it promotes narrowness, conflict, and a way of thinking inimical to achieving what is needed: government that promotes the general welfare without being overly expensive or overbearing.

Government is essential. Corruption — whether of the illegal variety, or simply favoring supporters — comes with the territory. One baby may soil his diaper more than another, but all need to be changed. So too with politicians and public servants in positions of authority.

Promote those least tempted to wield power to favor friends, or punish enemies. Look for those who seek out ways to promote the general welfare and good public policy. Let it not be about how much I and mine can get from government. Wu wei. Non-interference. It is time for government with a lighter touch.

Rates for sewer and water service. This space writes about the lowly: water and sewer. For the lifetime of the reader, rates have been remarkably low. But that is changing. Water rates have doubled over the past five years, and, well above the rate of inflation, will continue to rise to pay for the $4.6 billion Water System Improvement Program. Sewer rates will rise sharply once the Sewer System Improvement Program gets going. These past few years the program has been delayed, although the interim program has been extended in time and scope, and has more than doubled in cost. On the main sewer program $4.1 billion is to be spent during the upcoming ten years; the total bill for the program is $7-8 billion (nearly $10,000 per San Franciscan).

The SFPUC, the city department providing water and sewer service, has estimated rate increases needed to pay for all the work. In the fifteen years between 2005-6 and 2020-1 the typical bill for both water and sewer will be 4.3 times higher than it was. The typical monthly bill was $45.35, and will rise to $195.84. In terms of "affordability", for a typical household with a 2009 income of $70,644, the cost of water and sewer service was about 1.35% of income; that will rise to over 2.5% in the late 2020s. (Assumes incomes rise at 3% per year.)

All projections are based on assumptions that may prove inaccurate.

Ocean Beach. Two winters ago the beach and cliffs south of the western end of Sloat Blvd, at the Zoo and beyond, were dangerously eroded by ocean waves. Part of the Great Highway had to be closed, and then moved inland, and even more seriously, sewer infrastructure was endangered. Winters will go by without incident, but then, suddenly, tides and storms can combine to change the coastline in a matter of hours.

To address storm erosion among other matters, a master plan is being prepared by SPUR. Whether to try to protect the highway and sewer infrastructure, and how, is a prime question. This past summer the Coastal Commission disapproved of rock that had been dumped as an emergency barrier, and also of a proposed pile wall. Now the idea that seems best is for sand from the shipping channel to be placed on the beach and then made into "vegetated dunes." Hopefully this sand will slow the advance of the occasionally angry ocean, and will save the infrastructure. If, one of these winters, the sewer infrastructure falls to the relentless ocean, ratepayers will have yet another big bill. Let's hope that funding for protection is found, and that effective protection is put in place in time.

Steve Lawrence is a longtime utility activist. Feedback: lawrence@westsideobserver.com

November 2011

 

Bond Funds Forever — for Whatever

Sophisticated voters know that bond funds are not necessarily spent as campaign literature promises. Laguna Honda Hospital is Exhibit A.

Once bureaucrats acquire bond funds, they may change course and spend pretty much as they please. Bond funds become spending money.

Voters are being told that $248 million will be spent paving city streets. Maybe. But it is very possible that a fair portion will be spent building bike lanes, handicap ramps, and mini-parks, or on traffic calming, islands, planting trees, or studying whatever consultants can dream up.

Because of the looseness with which bond funds are spent, lobbying drives bond fund spending. For example, nine years ago voters passed a bond measure funding improvements to the Hetchy water system. The proposal was to make the Hetchy water system seismically sound, drought-resistant, and provide about 20% more water — enough water to serve through 2030.

Since then, the now $4.6 billion program has dropped the goal of providing sufficient water through 2030. Environmentalists objected.

The greens also grabbed lots of the bond money for their preferred purposes. A $12 million program EIR, not a part of the original program, was their opening act. A project was devised to spend $20 million on "watersheds," parts of which are not even upstream from reservoirs. Another project was created to protect "habitat"; weed-like, that habitat project has grown to $89 million. Your water bill is rising much faster than the oceans; some of that rise flows from incessant and successful lobbying.

There is no good way to add up green spending. For example, greens got small dams removed from Alameda Creek. This seemed innocuous. But with dams gone it turned out that certain protected fish might reach further upstream to the site of a major project. Now those fish need to be accommodated by that project. The cost of accommodating the fish is beyond knowing, but is large.

As one who has followed the program, now called Water System Improvement Program, from its inception, I can assure the reader that hundreds of millions of dollars of spending, and delay time, has resulted from green lobbying.

It is a mistake to imagine that groups such as the Chamber of Commerce or SPUR will follow-up to protect the interests of the citizen and ratepayer. Such blue-ribbon groups supported the bond measure, and then dropped the matter, moving right on to the next cause.

It is the rare citizen watchdog that is up to creating a movement and then sticking with it for years.

On the other hand, greens do their lobbying through non-profits. Non-profits hire professional advocates. Careers are dedicated to the cause. Advocates join and dominate citizen advisory committees. They attend and speak up at commission meetings. They get commissioners appointed. Fierce commitment and endless advocacy is effective.

So when you vote for the City to go into debt by funding some public improvement with bonds, remember that the good you hope will be done may be illusory. If special interests can hijack the bond funds, or a portion of them, they will. Certainly they will try. Bureaucrats and politicians will tend to make decisions in favor of those who appear before them, apply pressure, and make themselves heard.

Once bond money is in hand, there is little incentive to spend strictly in accordance with the voters' intent. Besides, politicians and bureaucrats are clever enough not to tie their own hands. Bond measures are chock full of caveats and loopholes, insuring flexibility. Steering millions of dollars of spending is one of the perks of public service.

Approval of voters is not even required for much bond and debt spending. COPs (certificates of participation) are used as one way to spend without voter approval. SFPUC (Water Sewer Power) revenue bonds in any amount may be issued without voter approval.

The sewer system is to get $7-8 billion of work over the next twenty years, an average of over $300 million a year. Documents suggest that in a dozen years time, the typical, average monthly bill for sewer and water will be $241, far above today's. For that you will receive about 15% less water than you use today. Your say in the matter? Flushed away yesterday.

When authorizing bond spending, vote with care.

Steve Lawrence is a longtime utility activist. Feedback: lawrence@westsideobserver.com

October 2011

 

It's Only (Your Ratepayer) Money

To the citizen on a budget, spending in San Francisco's public realm can seem unreal.

Let's examine one recent agenda from the San Francisco Public Utilities Commission, the folks who provide water, sewer service, and, for now, power for MUNI, General Hospital, City Hall, and other public places.

Three lucky engineering firms get contract amendments worth $6,700,000. For what? For "engineering design services." After the amendments, the contracts the three have are worth $45.5 million.

Four less lucky engineering firms get amendments each worth $2.7 million. This is for "continued engineering design and real estate services."

Seven firms get only time, no money. Yet.

Firms providing "ongoing environmental analysis services" ring up $7.8 million in amendments, bringing their contracts to a total of $19.47 million. As a percentage increase, ongoing environmental analysis is where it's at during this recent month.

Then there's "design, engineering and commissioning" services provided by a consultant who will also provide technical expertise on compliance with the Federal Energy Regulatory Commission. This firm is awarded a $6 million contract.

Another engineering firm is awarded another $6 million contract to inspect construction, and provide "program management support and technical services (general and review support)". That sure is specific. Not.

For CCA, community choice aggregation, which is the City's move to push aside PG&E as the main supplier of electricity to the city, two firms get one-year extensions to their contracts. No amount of money is mentioned.

A goodly portion of authority to spend on consultants is found on the "consent calendar," which is used when no opposition or discussion is expected. The General Manager (chief bureaucrat) is often empowered to negotiate consulting contracts and amendments.

Rarely are there more than a couple of questions from commissioners about such spending matters. It is very rare indeed for a vote on spending not to be unanimous. No one asks, "…what are the soft costs for this program as a percentage of the construction costs?" Rare it is for a commissioner to ask what the services are for, or, if a contract is amended, why they were not provided for originally. Often the agenda does not allow the reader to understand what programs or projects are being advanced by a seemingly endless parade of expensive consulting services.

Thus are many millions spent and added to your water and sewer bills. The City projects big population growth, and even bigger job growth in coming years. If that growth does not materialize, water and sewer bills will be split fewer ways.

The average citizen can hardly be expected to read the agenda, study the matters, and be heard at meetings. But lobbyists and special interests are there, you can count on it.

Do organizations such as the Chamber of Commerce or SPUR monitor such spending? No.

There is a committee constituted to oversee bond spending, but it has been completely tamed and neutralized. Recently the Revenue Bond Oversight Committee has spent most of its time hiring its own consultant, picking from an approved list given to it by the City and its bureaucrats. This committee, members of which are paid a small stipend, has had the same Chair almost since its inception. When a citizen offers suggestions about what it might investigate, silence is generally the reply. Ratepayers cannot count on the oversight committee.

Perhaps a focus on mere millions spent on consultants is misplaced. The City sewer system wants $8 billion of spending attention. That's 32 times what is asked this November for fixing City streets.

But you won't be asked to vote on bond spending for the upcoming sewer system work. Nine years ago voters abandoned their prerogative to vote before such spending.

$4.6 billion is being spent on the water system. One-third of that sum has been expended (through June). Recently the program's completion was delayed seven months, and is now expected in July 2016. For the five years until program completion, $50 million per month is projected to be spent.

Spending isn't just a state and federal issue. Recently Uncle Sam upped his debt ceiling by 17%, sufficient for only two years. During President Obama's first term, federal indebtedness is expected to increase by more than 50%, just as the older of the baby boomers arrive at age 65. Cities need not follow the federal example, must they?

It's your ratepayer money being spent. Add it to the tab.

Steve Lawrence is a longtime utility activist.

Feedback: lawrence@westsideobserver.com

September 2011

 

Rising Cost of Utilities

Time for SF Taxpayer & Ratepayer Org?

On July 1 rates charged for water and sewer rose again. For water the rate rose about 13%. Over the past five years the cost of water has doubled. Sewer rates have been rising at an average of 7.5% per year; this year the rate increase is 3.6%.

Rates are sure to rise more. Water Power & Sewer, the new moniker for the city department still officially called San Francisco Public Utilities Commission (SFPUC), has completed a little more than one-third of its big work on the Hetchy water system. The $4.5 billion work program aims to allow the water system to survive a sizable quake, to better withstand drought, and to ease maintenance.

Big work on the sewer system is coming. Some high priority work has been done; much more is planned. An ambitious master plan was adopted last summer. During the next twenty years a very long list of sewer system improvements are to be accomplished. The price tag is $6 billion.

While in these days of debt and deficit we've all grown used to reading about billions (and even trillions, a million millions!), these are fearsome numbers, even for a big-spender like San Francisco. Adding what officials think will be spent on water and sewer system work, $4.5 and 6 billion, and dividing by let's say an expanded City population of 900,000, that is $11,667 per person for water and sewer work.

But that's not all. SFPUC also provides electric power. Today it provides power to City facilities. But SFPUC plans to soon replace PG&E, providing power—greener power, is the lure—to most of the City's homes and businesses. While this is not supposed to cost extra, when does the City undertake a major program at no cost to taxpayer or ratepayer? Good luck with that plan.

Then there are many special programs. Stormwater swales, toilet give-aways, GoSolar subsidies, and many more. Public agencies in San Francisco love to buy your love. There is no shortage of individuals and community groups bellying up to the ever-deeper public trough.

At a recent SFPUC Commission meeting, one of the commissioners brayed that SFPUC had not chosen to implement only the more cost effective water conservation programs, it had done all of them. It made sense to make such a statement: there were no ratepayer advocates present, only environmentalists. Commissioners pander to the extremists who work for nonprofits and attend meetings. The ratepayer? The Invisible Person.

Spending creates opportunities for public employees and politicians. Where to put the new recycled water plant? How about out in Golden Gate Park, which is Recreation & Park land? "Rent" can be paid which transfers ratepayer funds to a General Fund department without raising taxes. Spending at the behest of nonprofits creates a win for a nonprofit's lobbyist. For the public agency, spending on nonprofits and for their causes creates "community benefits" to publicize, and advances a "you scratch my back, I'll scratch yours" truce.

Soon more spending is likely to be needed. Ocean Beach is eroding. (See last month's column.) The treatment plant there, less than twenty years old — new for such a facility — is endangered. Either the beach needs to be seriously armored, or one of these years the ocean will undermine pipes and plant. Then billions will be needed to relocated critical infrastructure.

Today San Franciscans are lucky to have pure water to drink, and a relatively easy place to dispose of treated sewage. Electric power here is expensive, compared to other cities, but we need no air conditioning, so bills are still low. What is worrisome is the trend: Utilities are fast becoming much more expensive.

We've had it good, we still have it pretty good, but will we in a few years? Even if luck holds, and no large earthquake or other disaster strikes?

To begin to control run-away utility costs, might San Francisco benefit from a taxpayer and ratepayer organization?

Steve Lawrence spends his time thinking and writing about San Francisco's problems. Feedback: lawrence@westsideobserver.com

July-August 2011

The Breach at Ocean BeachErosion at Ocean Beach

Ocean Beach is one of San Francisco's gems in the rough. What's up out there on the Western front?

All is not quiet. The beach is in retreat. In the past decade the boundary between ocean and beach moved east – quite a lot. While not noticeable to the casual beach walker, south of Sloat Blvd the beach is inland on the order of 235 feet of where it was in 2000. That's a lot of change.

Beach erosion happens suddenly. While the sea rises slowly, suddenly the right, or wrong, conditions combine, and then the ocean can claim chunks in short order. In no time a roadway is vulnerable, as Great Highway became last year; within hours, expensive sewage infrastructure, built to last a hundred years, is in danger of being undermined and destroyed.

It's a truism to say that Nature is dynamic, but in the case of the ocean versus Ocean Beach and its cliffs, it does take on poignant meaning.

What to do, other than watch Nature's awesome power? That is the question SPUR is addressing. (SPUR is San Francisco Planning and Urban Research Association, a non-profit.) SPUR is preparing a "master plan" for the 3.5 mile stretch of Ocean Beach. Perhaps the toughest question is how to deal with erosion and the advancing ocean. Protect the road and sewer infrastructure, or abandon to Nature?

So far we have protected human "improvements." But we do so mostly when danger approaches. Once danger passes, long-term protection measures bog down in controversy. The next crisis arrives, and then we react. Having a thought-through plan would be better.

Numerous agencies are involved at Ocean Beach. Among them, the Army Corps of Engineers, which maintains the Golden Gate's shipping channel, dumps sand in an attempt to replenish, or build up, the eroding beach. Department of Public Works has dumped rock, creating what is called a rock revetment, during winters of emergency. It expects to install a wall of piles in an attempt to save the bluffs. Other agencies protect endangered birds, the coast, and mediate between dog owners and others. Everything done and to be done at Ocean Beach must be done with sensitivity, and usually is preceded by outreach and process, which is time-consuming.

In stormy weather the Great Highway has become lesser. For a time a portion of southbound lanes was closed. Now a section is one lane instead of two, and that lane has been pushed eastward.

Your water rates have doubled over the past five years, and are set to increase another 13% July 1. Sewer rates are higher still. The major work to update the sewer system remains ahead. Planned work does not include relocating infrastructure at Ocean Beach.

Ocean Beach is where the city meets the wild. Surfers, bikers, fishermen, strollers, joggers, hang gliders, bird watchers...all find their way to this place to have fun and renew the spirit. The majesty and power of the great ocean lays, usually quietly, sometimes not, at the edge of our continent. That power is rising, relentlessly rising.

Feedback: lawrence@westsideobserver.com

June 2011

Stink about Sewagesewer cover photo

Now that cell phones are everywhere, how easy it is to dial 311 and report that unpleasant odor wafting up from the street sewer.

Apparently increasing reports recently came to the attention of Supes. I’ll defer making a comment about how impossible it seems that that bunch could find objectionable the smell of sewer gas, given their own odoriferous business.

Hauling in a public employee, what the Supes heard was predictably defensive: yes, there were odors emanating from sewers, and more complaints about them, but such is not the fault of city workers. Low-flow toilets, climate change (including a warm, dry period mid-winter), and just more people living and wandering the flatlands of Mission Bay lead to gaseous complaints.

When the use of bleach to deal, disinfect and deodorize, was mentioned, environmentalists rose not only to defend low-flow toilets, but also to excoriate the shameful use of nasty chemicals. No, no, bleach does not flow into the Bay; it is neutralized to produce salts, the sewage folk (SFPUC) then explained.

It turns out that low-flow toilets save 20 million gallons of water. While that sounds like a lot, in fact it is about seven one-hundredths of one percent of the City’s annual water usage. A drop in the bucket. Still, the less liquid flushing sewage along, the smellier.

All of this stink occurs in a context that most citizens will have understandably forgotten. In early 2002 a plan seven years in the making emerged from SFPUC, the City department responsible for dealing with sewage. At that time the plan was to spend a billion bucks to upgrade the City’s sewer system and treatment plants.

Because there was opposition to components of the plan, and because SFPUC was most eager to acquire a larger chunk of money to fix the water system, the sewer plan was excised. SFPUC said it would return in two years, presenting a more agreeable plan.

Two years passed and all that happened was that $150 million of urgent fixes was presented; the remainder was deferred. Now, some nine years later, we still have no solid plan to upgrade the aging sewer system, although there is a draft Sewer System Improvement Plan. The draft plan would cost four billion dollars in 2010 money.

In 2002 there was one Communications employee at SFPUC to deal with the public. Today there are nineteen (down from twenty-two in better times). If you can’t fix a problem, talk about it.

SFPUC expects a firm plan to fix the sewer system to ripen one day. When? There are no firm dates or timelines; public employees operate timelessly.

How will rates be affected? So far SFPUC’s website lacks info, nor does the current draft Sewer System Improvement Program plan get to rates. But perhaps some guidance can be garnered from the water system improvement plan. That plan requires the City to pay about $2 billion, half of what the sewer improvement program is expected to cost. Water rates have doubled in the past five years and will rise at least as much over the next few years. As water rates will have tripled, or more, and as the sewer program will spend double what the water program is spending, might sewer rates rise by six times?

Last month’s column noted that rates for electricity are likely to rise with the coming of your new “green” electricity provider: CleanPowerSF, the City’s poke-in-the-eye, or kick in the butt, of PG&E. If you smell that utility rates are rapidly rising all ‘round in San Francisco, no, your nose is not out of sorts.

Out on City streets, though, if you smell stale odors, please don’t be too fast with that phone finger. You’re in for quite enough of a bill. Hold your nose, prepare to pay more, and pray it’s not too much more.

Steve Lawrence is a longtime ratepayer advocate. lawrence@westsideobserver.com

May 2011

Zapping PG&E: Progressives Plant Public Powerplug

"As you sow, so shall you reap." That's the wisdom that San Francisco will test.

Progressives have long sought to plant public power in the abundantly fertilized soil of San Francisco. They are about to get their season. Let's hope the fruit isn't bitter.

An Updated Electricity Resource Plan was adopted last month and passed on to the Board of Supervisors. That plan advances public power, and seriously zaps PG&E.

Under the new plan, full public power is to serve Treasure Island and Hunters Point redevelopment areas. The remainder of the City will be served by CleanPowerSF, a new City-run electric power provider, called a CCA. CCA stands for community choice aggregation, or aggregator. It is a creature of state law arising out of the dark days of the energy crisis. Back then, when PG&E and other public utilities were on the brink, the idea was to empower cities to obtain and provide their own electricity.

Progressives took the CCA law and dyed it green. CleanPowerSF will promise to deliver cleaner, greener power than PG&E does. And, surprisingly, at a "comparable" price.

How will CleanPowerSF, run by City bureaucrats, start up, buy more renewably-generated power than PG&E does, and stay price-competitive? Let us count the ways.

First, startup costs of the CCA will be amortized. The costs are spread over many years, are deferred, so that rates in early years are lower.

Remember that PG&E's rates are the benchmark. When PG&E loses most of its customers in San Francisco, what will happen to its cost per unit of electricity sold? Up they will go; then so too will PG&E's rates. As PG&E's rates rise, "comparable" rates of CleanPowerSF will be able to rise, too. Quite a neat trick by City bureaucrats, that.

Initially, to lower rates, CleanPowerSF will blend in Hetchy power with more expensive renewable power. Hetchy power is generated when our drinking water flows down from Yosemite. Hetchy power is cheap: less than one-third of market rates. While it is not "renewable," it is "clean".

Another trick is that CleanPowerSF will create a special feel-good category of customer. This special customer pays extra to receive supposedly greener electricity. While special customers pay extra, what generates City electricity remains unchanged; grid electricity is generic.

By deferring costs, blending in Hetchy power, and creating a green goddess customer class, along with counting on PG&E's unit costs and rates rising once its customer base shrinks, CleanPowerSF hopes to keep rates "comparable" to PG&E's rates.

Yet another way that the City keeps apparent costs down has long been in place. The Hetchy water system is artificially divided into two "pockets", one for water and the other for electric power generated by that water flowing downhill. The water pocket holds debt—lots and lots of bond indebtedness. The electric power pocket is kept warm with cash. This pocket now funds GoSolar and many other programs that City politicians and bureaucrats love to provide.

The City-run CCA, CleanPowerSF, is to launch this year. Customers will begin seeing notices in their bills from PG&E. State law requires PG&E to cooperate with CleanPowerSF; PG&E tolls its own bell.

The coming CleanPowerSF notices will promise cleaner, greener power at the same initial price as PG&E electric power. While customers will have a chance to opt out, remaining with PG&E, few will. If a customer does nothing, the customer is switched to CleanPowerSF.

At present PG&E provides three-quarters of the electric power used in San Francisco. (Hetchy power for City Hall, MUNI, airport, General Hospital, etc. is 17%; 8% is provided by direct power providers to big users.) Once CleanPowerSF is launched, PG&E's share may drop to single digits.

And that is the idea behind this progressive push to plant public power in San Francisco. For four decades progressives have sought to oust PG&E. Nothing could please progressives more.

The rationale, expounded by the recently Updated Electricity Resource Plan mentioned above, is that only by controlling its own electric power destiny can San Francisco reach its goals. The key goal of the updated plan is to achieve by 2030 zero greenhouse gas emissions from electric power generation. Zero.

While the reader may scoff at such an idealistic and impossible goal, it drives today's action. It is necessary to form the CleanPowerSF CCA, and drive PG&E out of San Francisco, to make best efforts to achieve the zero goal. That is the reasoning of the Updated Electricity Resource Plan.

Cloaked in green, progressives push public power both directly for new developments, and through CleanPowerSF, a brave new company run by public employees that will displace PG&E.

Naturally, under CleanPowerSF there will be all the usual public programs: solar and wind incentives, "community benefits" (for poor communities), energy efficiency programs, low-income lifelines, and so forth. There will be aggressive targets to meet, or try to meet, regarding renewable generation of electricity. To the extent possible the City will generate renewable electricity within San Francisco, which is to become a "Green Test Bed."

Steve Lawrence is a longtime ratepayer advocate. Feedback: Steve Lawrence

April 2011

Recycled Water No Walk in the ParkSite for Recycled water plant

What tops water officials' wish-list? Recycled water does. Since the deep drought of the late 1980s and early 1990s, recycled water is a must-have.

In PC San Francisco, then, one would imagine that recycled water long flowed. Yet all that flows today are words and fury.

The problem is that recycled water must be produced at a physical treatment plant. Self-styled Park advocates are fighting furiously to keep what they call the recycled "factory" out of Golden Gate Park. Meanwhile, octopus-like, the bureaucratic process of "outreach" crawls.

The race to recycled water began twenty long years ago when ordinances were passed requiring that all but small developments prepare to accept recycled water for irrigation, and even for such wishful uses as flushing toilets. Reading those ordinances, one would think that recycled water was either available, or rapidly coming downstream. Ha!

Five years later, in 1996, a "master plan" floated in. In early 2002, a plan to produce 10 million gallons per day (mgd) was adopted. Recycled water was to serve about one-eighth of city water use. The capital cost was high, about $12 per gallon of capacity. For comparison, recent capital cost for other cities is $7 per gallon of capacity.

In 2006 another master plan issued. Under it, 4.5 mgd was to be produced—about half of what had been planned in 2002. Capital cost rose from $12 to about $45 per gallon of capacity. The voters had given their blessing in late 2002; no longer was there any need to keep the price-tag low.

Since 2006 the quantity of recycled water to be produced has steadily declined, and the cost per gallon of capacity has risen. Today the near-term plan is to produce 1.6 mgd, a third of what was to be produced in 2006, and less than one-sixth of the 2002 planned quantity. Capital cost of producing the 1.6 mgd is $95 per gallon of capacity, about eight times what voters were presented in 2002. The quantity to be produced would amount to just over two percent of San Francisco's water use, down from 12%. (Eastside recycled water may one day contribute another nearly 3%, if the dreams of bureaucrats are realized.)

As proposed now, the Westside recycled water facility would be sited in the southwestern corner of Golden Gate Park. Now the space is a dump; many years ago it was home to an old treatment plant. The proposed plant site is in the Park because Rec & Park insists that recycled water be treated to a high level of purity. "Sensitive" plants and lakes require purer water, according to Rec & Park.

Earlier plans called for production of recycled water at the Oceanside Wastewater Treatment Plant near the Zoo. But there is room at Oceanside only for ordinary filtration, officials insist. There is no room for the higher level of treatment, using a process called reverse osmosis, which Rec & Park demands.

About eight-five percent of the recycled water is to be used in the Park. The remainder is to be used to irrigate Lincoln Park, and Presidio Golf Course.

By splitting recycled water's production into two parts done at separate locations, it would be possible to locate treatment outside Golden Gate Park, officials concede. But it would cost more. Not only would two facilities need to be built and operated, but also the recycled water would need to be piped to the Park using a more costly route, through residential neighborhoods.

If recycled water is produced in the Park, there is a tunnel running roughly under the Great Highway that can be used to convey treated wastewater. But per the state Health & Safety Code, the existing tunnel cannot be used to convey already-produced recycled water. So, not only will the split treatment facilities cost more, but also a new pipeline must be built. That would be more costly and would impact residents and traffic in the outer Sunset.

Cost and convenience are lesser considerations for Park advocates who seek to keep the Park free of what they imaginatively style a "factory." Actually, the plant producing recycled water would be low profile. No smokestacks. There would be planted berms on three sides, screening trees in front, and a green living roof. For years the site has been a dump. Rec & Park has no money to develop it.

Any park needs irrigation water. Is it unreasonable that irrigation water be produced economically where it is used?

In San Francisco reason and cost considerations do not necessarily float to the top.

For twenty years our water officials have eagerly planned to produce recycled water. As time has passed, costs have risen—a lot. Volume has declined.

Where shall recycled water be made? In the Park, or in divided facilities elsewhere? We've had words a-plenty; our fair City will proudly produce recycled water some day, won't it?

(Alternative sites considered for the treatment plant to make recycled water include Sunset Circle, Harding Road, and the National Guard Armory, if the state will sell it. Recycled water is now scheduled to begin flowing in late 2015.)

Ed. Note: Steve Lawrence and Joan Girardot are two of the SFPUC's most vociferous longtime critics. When they are in agreement with the agency, SFPUC watchers take notice.

March 2011

Watchdogs, Lapdogs and Rubes

Just because there is an oversight committee does not mean there is effective oversight.

It is said that legislating is like making sausage. What is City governance like? Rube Goldberg comes to mind.

Rube Goldberg was a cartoonist who drew complex machines that performed simple tasks in very convoluted ways.

I follow the SFPUC, the San Francisco Public Utilities Commission, supplying water, sewer service and municipal power. Soon this city department will also supply electric power to homes and businesses, replacing PG&E. The department is one of the better run ones. Well-greased it may be, but the machine is complex and not what you might expect.

A decade ago there were well publicized “issues” with the spending of public bond money. At the Airport and City College, among others, bond funds were diverted and misspent. As a result requests for bond spending were accompanied with “oversight.”

Thus in 2002 when the so-called “rebuild” of the Hetch Hetchy water system was authorized--now a $4.6 billion bond funded program--an oversight committee was created. As public money had been misspent in the past, an oversight group would act as watchdog.

But as with anything in the public realm, the idea is one thing, implementation is quite another. Although SFPUC did not support the ballot measure creating the oversight group, once the measure passed SFPUC was keen to corral and control the group. It helped build the oversight machine. And SFPUC did a fine job of rubing and neutralizing.

Today on the oversight committee are members whose terms have long since expired. Frequently, there have been vacancies, and ghost members, who never attend. According to rules in this town, a vacancy is equal to a No vote for any action the committee would take. So vacancies and ghost members are popular. Committees with missing members have difficulty getting the votes to take action. How convenient for the bureaucracy!

On the other hand, another City rule keeps “members” on committees after they should be gone. Why would that be done? The public employee bureaucracy invests in each committee member. Members are wooed with benefits that the bureaucracy can bestow. In addition, the oversight committee members of whom I write are paid, monthly. Not a great deal, but members receive pay.

Terms are for four years. Now, you might think that “four” is a term capable of no ambiguity; everyone knows what “four” means. You should not be in San Francisco government if you think such a thing. “Four years” means any of a variety of things in San Francisco government, including five, six, or even more.

Now, wait a minute, how in the world can “four” mean “five”, even in San Francisco? “Holdover” is the key. When a member’s four years expires, if no new member is appointed by the responsible appointer (often the mayor or supervisors) then the member whose four years has expired may stay as a “holdover.”

Holdovers are very convenient for the public bureaucrats. Think about it. Holdovers have four full years of training. Naturally bureaucrats will live with the devil they know, and have tamed, rather than with the devil they don’t know. If a holdover begins to act up, quick as a wink his appointer can be awoken, and poof, he’s gone. This makes for very compliant holdover members. How convenient!

But, you may ask, how can a term of four years mean that a member can serve for five or six or more; four is specified; if a term were meant to be “until replaced,” then the ordinance could easily have, and would have, said so, would it not?

Having been an attorney myself, I asked that very question of the City attorney advising the commission about which I write. He promised me an answer, and I reminded him about that for many months. I never got an answer. City attorneys work in and for the public employee bureaucracy; what is best for that bureaucracy finds a way.

The committee about which I write is no major committee. There are hundreds of such committees scattered through San Francisco government. This particular oversight committee had members who were not San Franciscans, had a member who worked for a firm that contracted with SFPUC, benefitting from the millions of dollars going to consulting firms, and, as discussed above, has members whose terms have long expired, one expired in 2007.

In 2011 SFPUC expects to issue more than $1.25 billion in bonds under the committee’s jurisdiction.

Bonds are like charging on your credit card. It’s wonderful to be a big spender today. Tomorrow you pay, with interest. Ratepayers will be paying off bond indebtedness for thirty years.

As GM Ed Harrington said in the Wall Street Journal recently, average water rates will more than triple between 2003, when the water system’s capital program was launched, and 2015, when the work is supposed to be completed. Under the program as it was when it launched, water supply was to be assured through 2030. Under the program today, however, water supply is assured--with warts--through 2018. The program’s cost has risen about a billion dollars so far. It is about one-third completed.

“Oversight” is a fine concept, but making it meaningful is very difficult with a bureaucracy practiced at rubing and undermining oversight committees. SFPUC has $4.6 billion to spend. Who wants a watchdog? Now, a lapdog, that’s different.

Feedback: Lawrence@westsideobserver.com

February 2011

Pensions Unpayable

Among the many facets of San Francisco government, happily one group is composed entirely of volunteers: the Civil Grand Jury.

This past year the Jury reported on public pension liability. Few listened. That is too bad. With no axe to grind, and no turf to protect, these talented citizens are very likely motivated by nothing other than the desire to protect the citizenry of our fair city.

The Grand Jury’s report is disturbing. They often are. Perhaps this is why the Civil Grand Jury is so often ignored.

The Jury tells it like it is. “The purpose of this report is to alert public officials and citizens that fundamental adjustments must be made to the City’s employee pension program.” In five years pension and health care costs will more than double, the Controller says.

The Jury believes that the financial future of San Francisco is in jeopardy. In the past the City has kept its pension fund fully funded. But City’s actuaries project growing unfunded liability in the future.

The Jury listed more than 900 retirees who receive pensions of more than $100,000. Absent reform, pension costs will soar in just a few years.

Cost sharing mandated by 2002 proposition has not been instituted. The People’s will has been ignored by politicians doing the bidding of the employee unions.

Not only are the overly generous City employee pensions like voracious termites eating the home, but also they affect everyday services. Revenues allocated for pensions and benefits soak up available revenue; policy makers choose to cut employees. Take Rec & Park as an example. “Cut costs” the mayor tells this department that delivers services to children and their parents. Does Rec & Park cut the upper managers? Of course not; it closes all the City’s Clubhouses and lays off the Recreation Directors that run them. Then, recently, it sends three very well spoken representatives to a community meeting about one clubhouse (J.P. Murphy, 9th Avenue) to explain why the best option is to lease out the Clubhouse, which was recently renovated at great cost. Those working with kids are gone; those working with words hang on; in the future, public facilities generate revenue.

Without quite saying so, the Civil Grand Jury says the City has been stupid generous. The City has painted itself into a fiscal corner. It will be messy to get out, but the City must act sooner rather later. In this case the “paint” just keeps getting deeper.

Will the citizenry mobilize? Without plenty of pressure, politicians are unlikely to act. It is like playing with a loaded gun to defy the public employee unions in this town. Public Defender Jeff Adachi tried, and B-B-B bombed. Citizens can heed the Jury’s warning, applying the needed pressure, or the City can “go Vallejo”.

The Jury is out.

December 2010

Water and Sewer Bills Set to Escalate

Nov. 2002 • Proposition A

(from Ballot Handbook)

Controller’s Statement on “A”

City Controller Edward Harrington has issued the following statement on the fiscal impact of Proposition A:

In my opinion, should the proposed bond issue of $1,628,000,000 be authorized and bonds issued at current interest rates, based on a single bond sale and level redemption schedules, the cost would be approximately $85,000,000 annually for thirty (30) years for a total approximate cost including debt service of $2,551,000,000.

This bond amount represents increases ranging between 5% and 12% annually between 2003 and 2015 in water rates for San Francisco consumers, the source of repayment for these bonds.

For the average single family residential service in San Francisco this cost is equivalent to an increase of approximately $26.42 per month above the current rate of $14.43 per month, for a total of $40.85 per month by 2015

(Harrington is currently Executive Director of the SFPUC)

The Supervisors voted as follows:

Yes: Supervisors Ammiano, Daly, Gonzalez, Leno, Maxwell, McGoldrick, Newsom, and Peskin.

No: Supervisors Hall, Sandoval, and Yee.

The rate you pay for water has doubled over the past five years, and will continue to rise. Why is this cost rising at 15% when inflation is much less? What might slow further increases?

Water is billed by the “unit.” A unit is a cubic foot of water, which is about 748 gallons. If you are a typical single family residence you pay $3.09 per unit for your first 75 gallons per day, and your household pays a higher rate if you use more than about 75 gallons per day (averaged over two months). You also pay a fixed monthly charge, and separately, at a higher rate, for sewage. Most water is assumed to end up sewage and you are billed accordingly.

While water use has declined over the past few years, chances are your bill is close to double what it was in 2005. The increase pays for the Water System Improvement Program, which is employing a record number of public employees at the city department responsible for water and wastewater (sewage), SFPUC.

The Water System Improvement Program (WSIP) upgrades the Hetchy water system, which opened in the early 1930s. WSIP aims to make the water system less vulnerable to earthquake and drought, and more maintainable. The program now carries a price tag of over $4.5 billion. The thirteen year program is a bit more than one-quarter accomplished, according to SFPUC, and has a few months over five years to run. Most of the physical work is to be accomplished in the upcoming few years, through 2015. During this time SFPUC is to accomplish about two-thirds of a billion dollars worth of work a year. Even by today’s standards, that is a lot of work; it is far more than SFPUC has ever done before.

So the key to limiting future rate increases to only three or four times the rate of inflation is for SFPUC to bring in the huge amount of construction it is doing within budget. It is a huge challenge. Over one hundred shutdowns must be scheduled and accomplished to allow construction work to be done and to connect up new facilities.

The WSIP program has changed over the years. In 2003, when it began, it cost less: about $3.4 billion. Back then it was to accomplish more. It was to accommodate a growing population, providing more water. A fourth line across the Central Valley was to be built, and the Calaveras Reservoir was to be enlarged to hold more than six times more than it holds.

In 2005 WSIP aims were downsized. Now it aims to accommodate only slightly more water usage. SFPUC has promised to cut water usage in San Francisco and cap demand growth in the suburban areas served with Hetchy water. About two-thirds of the system’s water is wholesaled to suburban customers.

Some of what was cut from WSIP in 2005 will likely be done in the future, driving your water bill up further.

Today’s WSIP is to provide less recycled water, 1.6 mgd (2 possibly) rather than 10 mgd, although at greater cost. WSIP no longer duplicates and replaces some pipelines; instead it repairs portions of lines. Today’s WSIP has added lots of environmental work. A Habitat Reserve project has grown to $54 million, and Watershed Improvement project is expected to cost $20 million. These are over and above the environmental mitigation done by each project.

Recently SFPUC agreed to take less water from local watersheds, giving more to fisheries and waterways. This will cost both in the giving and the replacing.

Large as it is, today’s WSIP, formerly the Capital Improvement Program, is just one program among many being undertaken by a growing SFPUC. The Sewer System Improvement Program is being finalized; the cost has grown from $1 billion in 2003 to probably $5 billion or more today. SFPUC is building a new, very green headquarters building for its employees: cost $190 million. SFPUC will soon sell electricity to households and businesses in San Francisco, competing with PG&E. SFPUC has quite a number of smaller programs, including biodiesel, GoSolar (panels to the people), municipal solar panels throughout the city, Lake Merced (taken over from Parks and Rec), graywater, stormwater, as well as for Treasure Island and Hunters/Candlestick developments. In less than a decade SFPUC’s Communications department has gone from one employee in charge of public outreach to 22.

In 2002 voters essentially gave SFPUC carte blanche to spend on infrastructure. Eight years later the results are that SFPUC has expanded, and with it your bills, too.

Feedback: lawrence@westsideobserver.com

November 2010

What does the City Spend?

San Francisco spends about $8200 per resident per year. That is far more than the state spends on your behalf, and nearly what the federal government does.

Total City spending per year is over $6.5 billion. That includes what is spent currently for benefits for retirees, but it does not include all that will need to be spent on those now working who will retire with pensions and life-time medical benefits. Also, the figure does not include schools and teachers.

Half of what San Francisco spends goes to personnel — to the salaries and benefits of public employees and retirees. In San Francisco public employees make more than private employees do. They also receive better benefits, have a more secure job, and, probably, enjoy better working conditions with fewer demands.

During good times public employment expands. Politicians respond to demands of constituents, special interests, and unions of public employees to do and hire more. When the hard times come it is difficult to eliminate public employees; all possible steps are taken to avoid painful layoffs. This means that public employment tends to ratchet upward.

In good times and lean it is tempting to promise future benefits which do not come from current funds. Benefits ratchet up. For example, city retirees receive life-time medical benefits. How many private employers offer that?

Politicians shy from stopping the rise in public employment and its cost. It can be political suicide to defy unions of public employees, which control so much money and so many campaigners. It would be risky to defy special interests who demand more services, especially during good times, when most voters turn their attention to making their own hay while the sun shines.

How might the ratcheting up of city employment and spending be controlled? Perhaps the City Charter should limit public employment to some number per resident. Now there is on the order of one public employee for every twenty-eight residents, far more than in most cities across the nation. Perhaps this ratio should increase to no more than one City employee for each 35 residents. Compensation, too, might be limited to a percentage (perhaps 110%) of what is earned by the median private employee in the City. That way those working for the public would not be far richer than those who support them. But at present there is no movement in the direction of such a Charter amendment.

Apart from paying salaries to City workers and benefits to retirees, how does the City spend its annual budget? Professional and contract services account for more than one-third of what does not go to present and retired City employees, so the City also spends large on independent contractors. Aid and grants consume about 9.4% of what the City spends; the City pays outsiders to do good works. Debt service consumes almost 10% of spending, and this percentage will rise.

Where does the City get its funds? Property taxes provide one-fifth. Charges for services bring in one-third. One dollar in six is from the State or Feds. Payroll taxes, business taxes and fees, hotel room tax, and quite a number and variety of other sources bring in smaller sums of the more than six billion dollars needed to feed the hungry beast that is City government.

Does the City spend too much? This fiscal year’s deficit is $483 million; next year’s is projected to be $712 million. MUNI routinely collects about two dollars per five that it spends, yet no one proposes to increase the fare to five bucks. It is expensive to run a special City.

One City expense that is running wild is pension costs. Recently the Civil Grand Jury, which is a group of volunteer citizens, reported on how the City’s pension expense is unsustainable. “The purpose of this report is to alert public officials and citizens that fundamental adjustments must be made to the City’s employee pension program.” In five years pension and health care costs will more than double, the Controller says. The Civil Grand Jury believes that the financial future of San Francisco is in jeopardy. Will citizens act in time?

Feedback: lawrence@westsideobserver.com

October 2010

Water Bills and WSIP

On July 1 the rate charged for water rose about 15%. Rates have doubled over the past five years.

There are two rates, called tiers. For the first six “units” of water (about 4488 gallons) used in each two month billing period, the homeowner pays $3.09 per unit. For more than 4488 gallons the homeowner pays $4.12 per unit. So on average the first 75 gallons a day are charged at a lower rate. It does not matter if a household is one person or a family of ten. Each customer (meter) also pays a flat charge, usually $12.40 for two months.

Renters and some condo owners share a water meter. Then rent or homeowner association fees pay for water. Different rates apply: $3.28 per unit for lower tier, and $4.37 for higher tier usage. Rent or monthly dues will tend to go up, as water must be paid for.

Wastewater rates are higher than those for water. The charge for wastewater (sewage) depends on your water usage. It is assumed that most of what you use in water goes down the drain and into the sewer system.

Why are water rates going up faster than inflation? Because of “WSIP”, the Water System Improvement Program, a 13-year program upgrading the water system and making it more reliable and less vulnerable to earthquake and drought, says San Francisco Public Utility Commission (SFPUC).

WSIP’s cost is now expected to be more than $4.5 billion. In its eighth year, the program is just over a quarter completed, reports SFPUC. In the upcoming five years, the balance of the program, about $3 billion dollars worth, is to be accomplished. But to date no WSIP schedule has held.

The program was launched in 2003 with a $3.4 billion price tag. More than seven years later, there remains about the same amount yet to be spent on improvements.

At the outset of the WSIP work, water rates were expected to triple. Now it is uncertain where they will end up.

In 2002 wastewater (sewer) work was removed from the capital program now known as WSIP. At that time that sewer work was priced at one billion dollars. While the sewer improvement program is still being finalized, the price has risen to about five billion dollars for the Sewer System Improvement Program.

More than half of WSIP’s work is encompassed in five giant projects. There are over eighty projects in all. Of the five giant projects, one is now in construction; one is awarded and construction work should begin soon; three have yet to go out for bids. Three of these five giant projects are to be completed in 2015, the program’s final year. Further delays to these giant projects may push the program past its deadline, and could further increase the program’s cost.

The real deadline is in the hands of God. No one knows when the next big earthquake will strike, nor on which fault. If WSIP work is completed, our water system should stand a good chance of surviving.

Steve Lawrence is a PUC citizen activist.

The next regular Meeting of the San Francisco Public Utilities Commission is scheduled for Tuesday, September 14, 2010, in Room 400, City Hall beginning at 1:30 P.M. For information, contact the Commission Secretary at 554-3165.

The next meeting of the SFPUC Citizens’ Advisory Committee, will take place on Tuesday, September 28, 2010 at 5:30 p.m. at 1155 Market St., 4th Floor Conference Room.

Minutes and other information are available: www.sfwater.org

Sept. 2010

What’s Happening with Community Choice Aggregation?

City government is getting into the business of providing electric power to San Francisco households and businesses. Under a law passed shortly after the energy crisis, cities may organize a company to compete with PG&E. Although the energy crisis waned, Greens joined long-time public power advocates, like the Bay Guardian and other “progressives” to push “power to the people!” Greens hope that community choice aggregation will bring greener power.

The vehicle for selling competing, greener power is called Community Choice Aggregation, or CCA. San Francisco is organizing its CCA, called CleanPowerSF. Once organized, CleanPowerSF will notify all households that receive a bill for electricity that they are joining the CCA, unless the household opts out. For three years the city CCA will sell power for the same price as PG&E sells it. The CCA power will come over the same grid, PG&E’s grid, as it does today. It just is to be “greener” power.

How much greener? Not too much. PG&E’s power is currently about 15% from renewable sources like wind mills. The CCA’s power will start off at 24% from renewable sources. In the second year that will rise to 25%, and in the third year to 26%. By the tenth year it is supposed to rise to 51%.

However, all details are in doubt. The City, on behalf of the CCA it will organize, negotiated these details with PowerChoice LLC, a private company that was to have acted as the CCA’s agent. Recently, however, negotiations with PowerChoice have terminated. A new request for proposals will go out in July, it is hoped. Meanwhile, doubt is cast on all the details of what was to have happened had the PowerChoice deal not fallen apart.

How was the City CCA to sell electric power as cheaply as PG&E for the first three years? It was to have gone into debt. The City CCA would borrow up to $400 million, which will be paid off between years 4 and 15.

If a household were to fail to opt out at the outset, could it do so later? Yes, but it must give six months notice, and it will cost. How much it would cost would be decided by rate-making authorities.

Would the City CCA really provide 51% renewable power in ten years? That was the target. Until recently the target had been by 2017. The percentage would include not only clean power provided, but also power conserved.

Why is the term “clean power” used, rather than “renewable power?” Renewable has a defined meaning; it excludes electricity generated by “big hydro”, as from the Hetch Hetchy dam and system. “Clean” is a term that might include power from big dams.

As part of the CCA program the City will acquire new power generation facilities. For example, it will demand that developers build wind mills or place solar panels and dedicate them to the City so that the City CCA owns generation facilities. While at first green power will be purchased on the open market, as time passes more and more is to be generated by city-owned facilities. Other generation being explored includes ocean and small hydro. Efficiency programs that reduce demand for electricity are also being aggressively pursued. Reducing power usage will count towards meeting renewable or clean targets.

To purchase green power the City CCA will engage a private agent or broker to buy power, and to service accounts.

Failed Prop 16, on the ballot in early June, might have made it more difficult for the City to organize its CCA. Had the proposition passed, cities were not to spend money organizing a CCA unless two-thirds of voters authorized it.

Recent review of the calendar of the General Manager of the SFPUC, the City department doing CCA, reveals that he is spending perhaps one-quarter to one-third of his time on the matter. With a $4.6 billion Water Improvement Program, a perhaps $4 billion wastewater program, and a new headquarters building also on the table, one might question the wisdom of expanding into public power just now.

Steve Lawrence is a PUC citizen activist.

July 2010

Community Choice Aggregation (CCAs)

pro & con graphic

Coming To A Socket Near You

Is Dirty Energy Good Enough For You?

Did you know that the electricity that PG&E is delivering to residents and businesses in San Francisco is only 15% renewable and won’t meet the state’s 2010 goals for clean, renewable energy? Let me reiterate that point. It’s 2010 and the energy to power our homes and businesses is only 15% renewable.

CleanPowerSF is a simple solution to our dirty energy problem. CleanPowerSF’s goals are to deliver San Franciscans cleaner, more renewable energy that meets our state’s requirements. The program will rely on more renewable resources like solar and wind energy and aims to be 51% renewable by 2017.

Today, most energy customers must get their energy from PG&E; there is no choice in the matter. PG&E generates your electricity from nuclear, coal, natural gas, hydroelectric and other energy sources. PG&E then transmits and distributes this energy directly to San Francisco homes and businesses.

CleanPowerSF will change only the “generation” part of this equation by providing customers with energy from resources like solar and wind energy. And that’s it. PG&E will continue to transmit and distribute electricity directly to residences and businesses and provide billing services. If you have an electrical outage, customers will still call PG&E and they will still be responsible. The only difference will be the type of energy you are receiving; it’s going to be much cleaner.

With CleanPowerSF, energy customers finally get a choice. Instead of one energy supplier, residents and businesses will have a choice between two energy supplies and mixtures

“Participation in CleanPowerSF is also easy and completely voluntary. Do nothing and you will receive cleaner energy; it’s that simple. Energy customers who wish to remain with PG&E’s energy supply may opt-out of CleanPowerSF at any time. At the beginning of the program, CleanPowerSF will send out a total of four opt-out notices both before energy service begins and after the energy changeover.”

(CleanPowerSF’s clean energy or PG&E’s energy). Ultimately, the choice is yours; consumers benefit by finally having a real and meaningful choice in their electric energy supply. CleanPowerSF will put you in the driver’s seat of your energy needs. We hope you will consider choosing the energy provider that offers the most stable rates and the cleanest, most renewable energy.

Participation in CleanPowerSF is also easy and completely voluntary. Do nothing and you will receive cleaner energy; it’s that simple. Energy customers who wish to remain with PG&E’s energy supply may opt-out of CleanPowerSF at any time. At the beginning of the program, CleanPowerSF will send out a total of four opt-out notices both before energy service begins and after the energy changeover.

Contrary to claims by opponents, CleanPowerSF will not cost the City taxpayers anything. CleanPowerSF will be funded entirely by participating ratepayers. In fact, with more renewable energy pouring into San Francisco’s electrical grid, energy prices will be much more stable over the long-term and less subject to the wild price fluctuations of fossil-fuel energy sources. CleanPowerSF’s goal is to have rates that are competitive with PG&E, while significantly increasing the amount of green energy supplied to the San Francisco electrical grid.

Right now, the California Public Utilities Commission (CPUC) has certified the CleanPowerSF implementation plan. The SFPUC will also shortly sign a service agreement with PG&E in order to facilitate smooth program operations. Finally, once the SFPUC completes a draft contract with the energy service provider (the entity that provides the City with the cleaner energy) the SFPUC will present it for full public consideration by your elected officials. As is the City’s standard practice, your elected officials will seek the advice of both the City’s Budget Analyst’s Office and City Controller. The Board of Supervisors, the Rate Fairness Board, the SFPUC Commission and the Local Agency Formation Commission (LAFCo) have held numerous hearings on the program already and will also hold public hearings on the contract. Once the legislative approval and transparent public review process concludes, shortly thereafter the City will begin finalizing the contract.

When CleanPowerSF begins serving energy customers, San Franciscans will see no change when they flip on a light switch or plug in their appliances. PG&E will continue to own and operate the electrical grid in the city and provide billing services for customers. However, CleanPowerSF will provide consumers with two things that PG&E currently lacks —long-term rate stability and a cleaner energy portfolio. CleanPowerSF is the best opportunity for our City to reduce greenhouse gas emissions and make San Francisco a greener, cleaner place to live and work.

Michael Campbell is the CleanPowerSF Director

June 2010

Is CleanPowerSF For You?

From the San Francisco Public Utilities Commission homeowners have received a mailer promoting CleanPowerSF: “I Choose Clean Energy.” The mailer promises that if the homeowner does nothing then he or she will receive energy that is “much cleaner than the energy currently provided by PG&E.”

Sound too good to be true? What is really going on here?

CleanPowerSF is San Francisco’s knife to stick into the back of PG&E. Elements within the City despise PG&E. Those who have ever read the Bay Guardian have probably seen it rant against PG&E and for public power. Also, “progressive” Supervisors love to hate PG&E.

In 2002, in the aftermath of the energy crisis, a state law passed allowing local agencies to form entities competing with the current electric lutilities such as PG&E. The price of electricity had spiked after companies like Enron had gamed the deregulation system of the mid-Nineties. California found power scarce, and prices multiplied. PG&E went into bankruptcy. To legislators it looked like backup was needed. The 2002 law resulted.

Then the crisis abated.

Still, among those who despise PG&E and had long called for “public power” the 2002 enabling law was tempting. It allows “community choice aggregators” to organize, and to sell electric power in competition with the utility that had long had a monopoly (for good reasons widely accepted across the country). As environmentalists advocated for more renewable power generation, two forces combined: environmentalists and those who want public power. The result in SF is CleanPowerSF. Marin, too, has moved to create a competing public provider of electric power.

“San Francisco is scampering to beat the deadline by organizing and registering its competing company before June 8. The San Francisco Public Utilities Commission, the city department providing water, sewer, and power for public places, is carrying the ball.”

As San Francisco and Marin marshaled forces and support, PG&E decided to fight back to protect its turf–with Prop 16 on the June 8 ballot. Faced with the Prop 16 threat, which would require a two-thirds vote to spend public funds to create a competing public power provider, San Francisco is scampering to beat the deadline by organizing and registering its competing company before June 8. The San Francisco Public Utilities Commission, the city department providing water, sewer, and power for public places, is carrying the ball.

Lately the Commission authorized its general manager to enter into a contract necessary accomplish a competing electric power provider by June 8. Usually the Commission accepts contracts – with all terms and conditions written. But, given the urgency it was willing to perhaps play fast and loose with the law, and certainly with custom.

You the customer must act to reject CleanPowerSF, or otherwise you will be deemed to have accepted it as your new provider of electricity. If this strikes you as cheeky, well, you are beginning to get an education about how theses lefties work. The notice to you announcing your “choice” of CleanPowerSF as service provider unless you reject it has not gone out yet; that comes in the future. The recent mailer is just “outreach”. (Of course sent at ratepayer expense.)

You the consumer of electric power might ask a few questions (but don’t hold your breath awaiting answers).

Question one: will CleanPowerSF cost me more? Ah, that is one matter that is touched on only very lightly in the “outreach” mailer. “Your rates will be comparable,” the mailer says. What is “comparable”? The dictionary defines it as “worthy of comparison.” Is ten percent higher than PG&E rates worthy of comparison? Twenty percent? Fifty percent? No one knows.

Question two: much cleaner? CleanPowerSF promises to deliver electricity “that is much cleaner than the energy currently provided by PG&E.” Really? Does it have any track record? (No.) Does it have contracts with significant providers of solar power? (None known or mentioned.) With wind power providers? (Same.) With “other” renewable sources? (None mentioned; and what would they be?)

Question three: reliability. CleanPowerSF promises that “It’s Reliable;” there will be no difference in reliability. Really? Suppose you provide a service to a set of customers and they banded together to dump on you and deprive you of business; would your service continue to be as reliable? If so, you must be a saint.

When something looks too good to be true.... The City is spending public funds to stick a knife into PG&E. This will gratify PG&E haters. Greens will take some pleasure: Because of competition, PG&E will be less likely to meet renewable mandates, and then greens will then be able to beat up PG&E. Feels good. Meanwhile, the City will pay to organize a competing electricity provider, will send “outreach” and employ bureaucracy, and will engage in political theater. Well, what else is new?

Steve Lawrence is a PUC citizen activist.

June 2010

Feb 2010 Will the City Have Enough Water? | Steve Lawrence