Hang Those Ornaments

By Steve Lawrence

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

By Steve Lawrence

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

By Steve Lawrence

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?

By Steve Lawrence

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 Beach

By Steve Lawrence

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

Zapping PG&E: Progressives Plant Public Power

By Steve Lawrence

"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 Park

By Steve Lawrence and Joan Girardot

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.

By Steve Lawrence

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

By Steve Lawrence

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

By Steve Lawrence

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?

By Steve Lawrence

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

By Steve Lawrence

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?

By Steve Lawrence

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)

Coming To A Socket Near You

Is Dirty Energy Good Enough For You?

By Michael Campbell

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?

By Steve Lawrence

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