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Face It!

When there is nothing we can do about it, our public employees and elected representatives need to step up to the plate. But don't hold your breath.

•••••••••• September 13, 2022 ••••••••••

Steve Lawrence
Steve Lawrence

Face it: for many readers, homeowners, the cost of water and sewer service, and electric service too, is like a property tax. There is little one can do about it. When costs rise you need to earn more or live less large. Property owners should be concerned with rising costs.

Have costs risen! For water and sewer over the past decade costs are up about 8% annually; costs have doubled.

Big expenses loom. Between 2003 and about 2020 the water system was improved at a cost about $4.8 billion. But half of that was paid by suburban customers, who use most of the system's water. So say $2.4 billion for SF ratepayers.

The ongoing sewer program is to cost $8.1 billion (as of Jan 2022), about three times what the water program cost San Franciscans. The expected cost has inflated considerably early in the program. Programs like this, big public works, usually swell in cost and time. The cost of the water program rose 28%. A guess that the larger sewer program (SSIP, Sewer System Improvement Program) will end up costing ten billion dollars is not out of line.

Needless to say, the upcoming spending of $8-10 billion or more means rates will rise big-time.

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The cost of water, power and sewer service is not top of the list of SF problems. But just as the cost and unavailability of housing, and the prevalence of crime and disorder, drive residents out of the city, so too does the rising cost of utilities. Our public employees and elected representatives must be held to account. ”

Yet San Francisco's politicians pile on ways of making the program more expensive. It's not just that the General Manager's salary is the highest of any city employee. SF piles on "social justice" costs, community benefits, and worst of all: costs from reduced competition.

Once competition for big public works was fierce. No longer. Not an insider who has cultivated a cozy relationship with upper management? You waste your time to even try to bid for work. To have a chance at winning work, you need to cozy up to the City Family, and show your willingness to spread the gravy with the many who have come to expect their share.

Competitive bidding is neither required nor done in any real sense. As competition is stifled, cost to ratepayers rises–often drastically.

No one watches out for the ratepayer. There is no ratepayer watchdog. Board of Supervisors? Please. The folks that the Feds busted for corruption were the supposed guardians of your purse.

What's been the response of our leaders to the corruption busts? Silence, pretty much. Mayor Breed is in hot water of her own making; she's not lowering the boom. Bulldozing aside the process for finding a new GM, after the old one resigned for corruption, she appointed Dennis Herrera, who for years had signed off on much done under the corrupt regimes. Expect Herrera (General Manager of SFPUC, the group responsible for implementing the SSIP) to clean house?

With a friendlier administration in Washington, the corruption investigations seem to have fizzled. What a surprise. San Francisco pols have a magician's history re rules: poof, disappear.

Power politics rules.

The cost of water, power and sewer service is not top of the list of SF problems. But just as the cost and unavailability of housing, and the prevalence of crime and disorder, drive residents out of the city, so too does the rising cost of utilities. Our public employees and elected representatives must be held to account.
 

# # #

Housing: Honesty Please.

Every politician, and nearly every voter, is all for affordable housing, the buzziest of buzz words. Each election has its affordable housing bond proposal; how many millions this time? Every politician supports the bond measure.

How much is already in the pot unspent? How many units have been produced with what we've spent? These are niggling questions not asked or answered.

Every politician is also in favor of "Neighborhoods" and "Process." While supporting affordable housing in theory, when it comes to siting an actual property, well, let the process play out, and let's not destroy our wonderful neighborhoods. Something can be worked out to the satisfaction of all, can't it?

Sure. In what long-lost world?

Isn't it time for honesty? We're not really for affordable housing. In 2020 the supes suspended one project to study racial implications; by September 2022 the study had not even commenced. This from a "progressive" board, supposedly dedicated to affordable housing, and certainly willing to make hay by condemning "greedy developers" to whatever process and cost they can dream up.

Isn't it time SF honestly faced and solved problems?

Yet we know it's unlikely. SF will fail to meet state deadlines re housing and affordable housing. SF will then do as it has with City College and Laguna Honda Hospital: we don't do rules set by others, we exercise power politics. SF will get the recent state rules suspended, or itself exempted. SF need not comply.

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

SEPTEMBER 2022

overhead Power Lines

Public Power?

•••••••••• August 18, 2022 ••••••••••

Steve Lawrence
Steve Lawrence

Is there any company easier to despise than PG&E? Explosions, fires, outages: PG&E is constantly in the “ain’t it awful” column. Progressive Supes thrive on bashing PG&E. 

SFPUC (water-power-sewer) has made an offer, spurned by PG&E, to buy PG&E’s SF electrical assets. Does anyone understand how the offer of $2.5 billion was made? Why not $3 billion, or 2 billion? It is claimed experts carefully valued the assets, but the reports are confidential and privileged, unavailable.

Today the city generates and buys power but distributes only a portion, mostly to municipal users. The lines in your backyard are PG&E's. There are many such lines and related facilities. If the city acquires PG&E assets, it would vastly increase its power work. 

Is there a plan for taking over? No, although an RFP (request for proposals) is said to be in the works.

How many new employees will be needed, and at what cost? The head of the power division has already complained that it is hard to hire for the work she has now. Yet there is no recruitment or hiring plan. 

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Nor can your correspondent, no expert in electric power, even begin to review matters intelligently when he is constantly met with “confidential and privileged,” authored under the auspices of the City Attorney... good luck with information held so tight to the vest. Why?”

Tax revenues will be lost if PG&E is ousted. 

What other ramifications are there? The Power group of the Citizens Advisory Committee has a resolution cooking that asks SFPUC to get on the ball and answer. 

What the city has done is ask the state PUC to determine the value of PG&E’s SF electrical assets. The state PUC may well do so, over PG&E’s objections, but the city is likely to pay for the consultants used, and the city may pay PG&E’s costs if SF doesn’t end up acquiring the assets. What are these costs? Unknown, not estimated. 

We live in a city that has lost and is losing downtown business. Downtown is in last place in the race to get back to where downtowns once were before covid. We’ve already got a very high number of public employees per resident. We’ve got not a few problems: homeless, housing, crime, emergency prep, and water/sewer come to mind. City government has not exactly aced these. A recession is likely in our future. Interest rates (cost of financing public work) have risen dramatically. A good time to take on another challenge?

PG&E Speaks... 

While listening to PG&E is not exactly in vogue, some reasons it advances for ditching the city’s valuation petition are: separating gas and electric is inefficient, the city’s inexperience and inability to hire and retain employees, the city’s lesser ability to respond to emergencies (earthquake), reduced state and local tax revenues, and PG&E’s need to spread the cost of fire avoidance (undergrounding). To the latter, utilities were created to spread costs; when electric service was “invented” cities were desirable, easy customers; rural places not so much. The utility was required to serve all at the same price, spreading the benefits and costs widely. Now SF proposes to selfishly withdraw.

The PG&E asset purchase, if it goes through, will not happen soon. The state PUC will hire consultants who will do considerable work valuing equipment not easily valued, and then the parties will debate and perhaps hold a sort of trial. All of this costs. Ultimately city taxpayers or ratepayers pay.

As the city spends, it digs in deeper; bailing out will look less and less good. Momentum will favor leaping whether things look good or not.

Meanwhile, the proposal to buy PG&E’s assets is going largely under the radar. Sure, it is highly technical. Got to leave it to the experts to conjure reasonable value, and to city staff to plan hiring and takeover. Once upon a time we had powerful newspapers and other civic institutions to take a look and root out the unreasonable and impractical. Today? City companies are nearly as mobile as their employees, here today, gone tomorrow.

Nor can your correspondent, no expert in electric power, even begin to review matters intelligently when he is constantly met with “confidential and privileged,” authored under the auspices of the City Attorney. Even if a citizen or group were sufficiently expert and motivated, good luck with information held so tight to the vest. Why? What’s to hide? 

When bad news dominates the news, one way forward for the enterprising politician is to create new endeavors, promising wonders to come. Clobbering PG&E is a convenient way to shift the spotlight. But even spotlights require juice. Let’s not wander down a road fraught with difficulties–and pitfalls. Union workers are opposed. Citizen advisors call for more scrutiny. Economic conditions flash yellow. Conversion to all-electric looms. Let’s not jump at buying assets which even the would-be buyer says are likely among the oldest of PG&E’s facilities without full and careful, sober review, objectively considering costs and risks.

 

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

AUGUST 2022

Newsom Announces Emergency

Statewide Drought Emergency

Please use 5% less water — Please?

Steve Lawrence
Steve Lawrence

Declared last November, the Water Shortage Emergency remains in effect. Recently a Water Shortage Level 2 has been declared. This means our water system will cut back 11%, to 175.7 million gallons per day (mgd); summer usage is not to exceed 200 mgd, a challenge mostly to our suburban customers. Retail use is to be 62.3 mgd, or 37%. 

Although the Hetch Hetchy reservoir is expected to fill, our larger water bank storage is not. 

San Franciscans’ average water use is 42 gallons per capita per day. The new level of use goes into effect July 1. Citizens are asked to voluntarily cut back their water usage by five percent. 

...

San Francisco’s action is consistent with and pursuant to the State Water Board’s further action of May 24, 2022. 

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Should the next level of cut-back be declared, retail use will be cut to between 16 and 20%, instead of today’s 11%. Voluntary reduction would likely still be the rule, although mandatory reductions could be enforced. If a mandatory reduction is ordered, there will be a “floor” or minimum allocation per person so that those who have conserved, and now conserve, will not be penalized.”

Should the next level of cut-back be declared, retail use will be cut to between 16 and 20%, instead of today’s 11%. Voluntary reduction would likely still be the rule, although mandatory reductions could be enforced. If a mandatory reduction is ordered, there will be a “floor” or minimum allocation per person so that those who have conserved, and now conserve, will not be penalized.

Temporary water restrictions could be imposed should the shortage level be increased again. These restrictions would add to permanent ones, such as allowing water to run into the street, hose use without a positive shutoff, potable water for fountains, and more. Temporary restrictions could include personal washing of vehicles, and filling hot tubs, pools or spas.

Water Saving Plants

For those planning new landscaping, there is a Water Efficient Irrigation Ordinance (City and County of San Francisco Ordinance No. 24-16, approved March 4, 2016.

* * *

Vulnerability. How vulnerable is SF’s water supply to climate change in combination with other foreseeable factors? A study has been completed. It’s concerning. 

Rates could easily need to rise 50%. Should today’s level of capital spending increase from $350 to $525 million, unless demand increases 30%, rates would rise 50%. It’s not at all hard to imagine such capital needs. 

For one thing, the dam that holds Hetch Hetchy reservoir, the linchpin of the system, is old. Standards for dams evolve, always towards more safety. A fair number of San Franciscans support removing the dam, regardless of safety concerns. It’s not hard to imagine these folk – who have not gotten their way politically – advocating for tougher standards to pressure on decision makers to make the decision they want. Repairing the dam, or replacing it with some downstream substitute, would be extremely costly. 

Plenty of other risks exist. Our watershed may receive less precipitation, the State may strictly enforce its mandate to increase the river’s fish population (as it seems to be doing), fires, floods, breakdowns – all out there; consolidated in one report, they are scary. We’re second in line for much of the spring runoff, we serve and have obligations to suburban customers who use close to two-thirds of the water, and we live in an earthquake prone region. Our water supply is plenty vulnerable.

* * *

Overruns. The Water System Improvement Program, launched in 2002, is nearly completed. Overruns were 28% in dollars; the time to complete doubled. That’s public works. 

...

The Sewer System Improvement Program is well underway. The work was to take about 25 years and cost $6.9 billion. Increase that cost by 35% (28% +7% for greater difficulties as work is in a crowded city) and the likely cost might be $9.3 billion. Add inflation. Surely we’re talking $10 billion. 

However it is possible – and there are already indications – that the scope of work to be performed is reduced. Who can say whether that’s a good thing, or reckless? 

Early work on the sewers is far from reassuring. Bids for the new digesters came in so high that the whole bid package was canned and re-packaged. Staff claims to be satisfied with the second go; good. But delay has occurred, and only time will tell whether this huge job goes per initial contract price, or more than doubles in cost as did the largest water program job. Our water agency has a new GM who is not an engineer nor a construction expert.  

Be thankful that this year bills don’t rise substantially; don’t count on that continuing. Between 2010 and 2021 rates rose at an average annual rate of 7.6%. But our suburban customers paid for half of the water system improvements, and the sewer improvements are likely to cost  twice as much–all paid for by SF customers. Labor shortages, inflation, bonds issued at higher interest rates, drought…these factors point to higher rates to come.

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

JUNE 2022

Senior witht coin purse

Time-Out for Rate Hikes?

A short respite — or calm before the storm?

Steve Lawrence
Steve Lawrence

Good news: this year there will be no rate hike after July 1 for water and sewer. That’s rare; for more than decade rates have been rising at least three times faster than general inflation. 

Certainly costs continue to rise. Probably the main reason for pause in rate increases is that work is being delayed, is being stretched out over more time. Partly this is due to covid, and partly to the change in leadership: about a year passed before SFPUC (water sewer power) had a General Manager. Too, it is uncertain how much water can be taken out of the river system. The state insists that free flowing water double, and that constricts SF’s supply. That matter remains open.

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...should the state’s plan (40% of full river flow required, give or take 10%) take effect, SFPUC says 50% rationing could be required. Environmental groups contest that judgment. But if anything like that threatens imminently, you can bet costs will rise and fast. Rates follow.”

At present the average bill for water and sewer is 1.6% of median income. In fifteen years that is expected to rise to nearly 2%. 

For the lowest earning quintile water and sewer bills are 4.5% of income. The SFPUC aims to help these folk, and already does quite a bit. Just how many in this group directly pay for water and sewer is something that never seems to be reported. Probably many rent and do not directly pay a water/sewer bill. 

Another problem is Prop 218. This limits rates to cost of service. When an agency forgives bills, or lowers bills for one group, how can it not overcharge the remaining customers, those not benefited by the agency’s bill-lowering program? 

In order to secure more water, SFPUC pursues alternative water supplies. This costs. Mostly these alternative supplies are small. Recycled water for cemeteries to SF’s south so that water is not pumped from the aquifer is one example. The hope is that when drought comes there will be more water left in the aquifer to supplement drinking water supply. A variety of other programs are listed; some are mere ideas. Even with alternative supplies, should the state’s plan (40% of full river flow required, give or take 10%) take effect, SFPUC says 50% rationing could be required. Environmental groups contest that judgment. But if anything like that threatens imminently, you can bet costs will rise and fast. Rates follow.

Debt service is rising as more work is done and bonds to fund it issue. If interest rates continue to climb, debt service will rise faster. Again, rates follow. 

Finally, as noted often in this column, big projects often have big overruns. One of the projects on the sewer side, Biosolids Digesters, is huge. Costs were already so out of expectation that the team paused and reconsidered. Two-thirds of the job remains to be done. Customers can only hope that overruns are not too large.

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

FEBRUARY 2022

Rate Hike

Rate Hikes and Murky Politics

Drought has been declared and a new drought surcharge — the first step

Steve Lawrence
Steve Lawrence

Water and wastewater (sewer) rates are rising. According to SFPUC (water-sewer-power) over the last decade rates have risen at an average of 7.6% per year. That means rates double in less than ten years. Expect that, or worse, in the upcoming decade. 

A drought emergency has been declared. Beginning April 1 (no foolin’) a 5% drought surcharge will be added to water and sewer bills.

A new manager is on the scene—our former City Attorney, Dennis Herrera. He’s certainly a member of the “City Family” so discussed in our press. His knowledge about water, sewer and power matters remains to be evidenced. 

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This summer the City asked the CPUC (California Public Utilities Commission) to put a value on the SF electrical distribution assets the City wants to buy. Again, we’ll see. Perhaps this is a play to pressure PG&E to sell. The City claims that state law requires the CPUC to value assets when asked to do so.”

Herrera does wish to expand SF’s power profile. Right now SF buys power and resells it to you and three-quarters of the City. But PG&E still distributes the power—and owns the power lines and facilities. Herrera would have the City buy out PG&E. The City has made an offer of $2.5 billion, made after nine months of investigation into what the City PG&E distribution assets are worth. Let’s see what the City ends up paying. 

This summer the City asked the CPUC (California Public Utilities Commission) to put a value on the SF electrical distribution assets the City wants to buy. Again, we’ll see. Perhaps this is a play to pressure PG&E to sell. The City claims that state law requires the CPUC to value assets when asked to do so.

Power (electricity) already costs more from SFPUC’s CleanPowerSF than it does if purchased from PG&E, although the difference is small. Rates just went up, and are to rise again early next year. So far CleanPowerSF’s rates have closely tracked PG&E’s, rising in tandem. PG&E rates are pressured by the fires, and by its expensive decision to underground lines that cause fires. 

Does the City care what your rates are? The Commission recently passed a resolution to guide the new General Manager (Herrera). It lacks anything about keeping rates as low as possible. Many worthy aims are stroked: equity, diversity, union labor, community benefits, fish, rivers, and more. But the ratepayer’s pocketbook? Go fish.

The City’s finances are strained. In the past when that has happened the City turns to “enterprise agencies” such as SFPUC’s to make up. Short funds? Let’s see what can be transferred to SFPUC. Emergency water fire-fighting has, as has Lake Merced. SFPUC has built greenways, and a whole community center in Bayview. Its property is transferred or used. Possibilities for financial help, at ratepayers’ expense, are nearly endless, limited only by the creativity of bureaucrats.

That’s the way it is these days for hard working citizens. You exist to support causes. City knows best. Use less water, water that is less tasty, and pay the rates the City sets.  

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Water Supply. SF’s water supply is in jeopardy. Not only is there a drought, but also there are two major uncertainties. The state’s Bay-Delta plan has been stewing for a long time. The state wants more water flowing down the river; SF wants to divert some of that, and makes up by helping the fish that are going extinct. But a second major uncertainty has risen: The state has curtailed diversion of water. This is a first. It creates a big problem for SF. SF’s largest place to store water is Don Pedro Reservoir, which is not owned by SFPUC; it is owned by two irrigation districts. The deal is that SF lets its water run into Don Pedro in return for the districts’ rights to divert a like amount of river water. Until the curtailment, this worked fine. It’s just like putting money in the bank. The bank controls the money, but you have a right to withdraw it at any time, so you’re happy. But if the bank is closed down, is prevented from giving out your money, now you’re not happy. Nor is SF with water. With the curtailment order SFPUC can’t actually take from the river the water to which it has rights. Whoops. 

So now we don’t know how long the drought will last, we don’t know what protection the fish ultimately get, and we lack access to the largest portion of our water. A bit of a pickle, this. 

So a drought emergency has been declared. This is a first step. SF asks that the curtailment order be lifted. But if not, then it asks that a bare minimum (55 gallons per person per day) be allocated to our water system, regardless of river or fish. Or, discussed as another possibility, perhaps the curtailment order could be modified so that SF gains access to water now held by the irrigation districts. However, that puts us at odds with the districts, allies in other respects.

That’s water politics in California. Ever murky.

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

NOVEMBER, 2021

PG&E - Market Street
Our City. Our Power.
Steve Lawrence
Steve Lawrence

Seeing ads for “Our City. Our Power.” you might well not realize that this is sponsored by SFPUC, our city’s water-sewer-electricity provider. Your rates pay for propaganda propagated by public employees. 

Not that these public employees don’t enjoy support of elected officials; they do. San Francisco’s Board of Supervisors supports public power, and the rising General Manager of the SFPUC, Dennis Hererra, is a strong supporter.

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The city has offered $2.5 billion for PG&E’s local assets (electrical infrastructure). It justifies that offer as based on nine months of careful study by experts, in-house and out. Your columnist predicts that the offer will be substantially increased without justification...”

Nonetheless, should ratepayer money be used to convince San Franciscans to support buying local PG&E assets? And if it is, why is it done in a manner opposite of transparent?

Now while SFPUC’s CleanPowerSF division generates and wheels (buys for resale) electricity provided in-city, PG&E owns the distribution facilities — the power lines and other infrastructure needed to bring that power to your home or business. It’s one thing to buy up power on the market, adding in power generated by the water system and solar panels. It’s quite another to distribute electricity throughout the city, tending power poles and lines. PG&E has experience; SFPUC little. 

Of course the city can hire and manage workers the same as PG&E can. In theory there might be little or no loss of efficiency. But given the highly political way our city departments operate, how likely is it that efficiency loss is minimal? 

Public officials are ever ready to expand their remit. Power is their game; more power is what they crave. That’s easy to understand.

Proponents of this likely take-over say that it’s necessary to achieve the city goal of no net greenhouse gas emissions by 2050. But why? There will be plenty over which the city lacks control in 2050; why is this particular ownership piece key? And after take-over PG&E will not be totally gone; it will still be relied on to sell and bring electricity to San Francisco.

The city has offered $2.5 billion for PG&E’s local assets (electrical infrastructure). It justifies that offer as based on nine months of careful study by experts, in-house and out. Your columnist predicts that the offer will be substantially increased without justification other than “it’s a negotiation.” Those in charge are so keen to achieve full public power that price — paid by you — is unimportant. 

Public utilities were created in good part to spread the cost, allowing rural areas to be electrified, permitting all to enjoy this then-new boon. San Francisco proposes to selfishly carve off the best cut of the business. Let the outlying regions pay for undergrounding lines so fires aren’t sparked.

Enjoying the advantage of serving a densely populated area, perhaps San Francisco, through the SFPUC and CleanPowerSF, can both generate and deliver electricity at reasonable cost. That remains to be seen. But count on over-paying for assets — then hearing complaints about their condition — and over-paying public employees to run the system. Hope and pray that it is run with as few outages as under PG&E.

It looks like we’re bound for a brave new world. Let’s hope the citizens aren’t first lulled, then zapped.

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

August, 2021

NASA Photos
NASA's Earth Observatory photos: March 31st, May 18th, July 7th /Photo: hypebeast.com
All Wet
Steve Lawrence
Steve Lawrence

Light has been shed on how and why SFPUC (water-sewer-power) perennially over-forecasts how much water will be required in upcoming years. The agency’s methods are logical and sound. But the underlying assumptions are flawed — by design.

Turns out that SFPUC’s forecasters use fanciful numbers. The numbers are supplied by others: official organizations that are tasked with providing the numbers, SPUR and such. These future forecasters come up with numbers that are “right.” By “right” is meant not accurate, but what should be. 

If SF should build x number of housing units for 4x new jobs, as is about typical, then it is assumed that SF will do so. So many jobs will be created, and thus so many housing units, with population growth duly following. 

That’s great, in theory. But then there’s what actually happens. Not only are there downturns, and maybe disasters, but also people resist. Urban planners don’t get what they want; what “should” happen doesn’t. Development does not proceed apace; it is delayed by community opposition. 

SFPUC is not entirely wrong to follow the numbers that officialdom provides and blesses. What should it do? Undermine officialdom and its plans? Is it for SFPUC to second-guess future population increases? The mayor ultimately controls who gets on the governing board (the Commission), as well as who is General Manager. Can appointees defy those in ultimate control? 

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... none of this means we water users are out of the woods ... many expensive efforts will be made to reduce demand and increase supply. Recycling, purification, groundwater, maybe desalinization, and many conservation schemes are coming. All that costs, and guess who pays?”

So SFPUC uses the numbers it is given, even while knowing that such numbers have been unreliable in the past. Because population is going to grow per the Bay Area Plan and similar urban planning, we’ll need so much water. Theoretically. 

According to the environmentalists (Tuolumne River Trust leading), the true numbers are closer to Dept of Finance numbers, which SFPUC could use, it suggests. But then SFPUC would be defying orthodoxy. 

The upshot is that SFPUC is in less trouble than it blares. If the state’s Bay Delta Plan is imposed, yes, we’ll be short, but not nearly as short as the crocodile tears SFPUC has been crying. Fanciful figures dreamed-up by urban planners and their ilk will not be realized. 

Understood this way, SFPUC, through its Commission, is best served by pretending to wring its hands, worrying about the shortage of future water, shedding 96 tears, but ultimately letting what happens happen. If the state imposes its full will, so be it. If all the acting and hand-wringing wrings out a bit more water, better. The Commission is Gulliver, tied by a hundred strings. Pull one way, tighten from another. Relax and play along; await opportunity.

Now, none of this means we water users are out of the woods. Whatever happens, whatever the state imposes, water will be in short supply. That means many expensive efforts will be made to reduce demand and increase supply. Recycling, purification, groundwater, maybe desalinization, and many conservation schemes are coming. All that costs, and guess who pays? Rates are forecast to rise 91% over the next fifteen years, and likely will rise more. That’s 5% per year. We’ll see. Things are not looking good with the largest project of the huge sewer program. Staff has thrown up hands, wants a reset; bids come in far too high. This is but one of many surprises likely to cause rates to rise more than currently forecast. But at least we can understand that the loud alarm bells re water supply are partly a product of playing a role. The machinations of government are rarely crystal; it’s a small win just to see shapes below the surface.

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

July, 2021

Fishing in Tuolumne County
Salmon and Steelhead Trout restoral on the Tuolumne are the cause of major problems for city water users Photo: Dave's Sierra Fishing
SFPUC's Double Whammy
Steve Lawrence
Steve Lawrence

With the West’s extreme drought much in the news, perhaps it’s time to review the fix our water department is in. Uncertainty prevails. Berated from multiple sides, our challenged bureaucracy procrastinates. Perhaps that’s the best it can do.

The water department is part of SFPUC (San Francisco Public Utilities Commission). For the past seven months it lacks a permanent general manager. A commission of five guides the agency. The State Department of Water Resources is now a key foil. Its “Bay Delta Plan” to save fish in peril of extinction looms, and threatens to prevent SFPUC from taking needed water out of the river. SFPUC serves two-thirds of its water to suburban customers, who have rights via a binding agreement. Eighty-five percent of SFPUC’s water has come from the Tuolumne River. To Tuolumne water SFPUC has junior rights; irrigation districts hold senior rights. Being senior means that you get first dibs; if little or nothing is left after firsts take, tough luck for junior. Getting needed water depends on adequate precipitation, favorable timing of runoff, and ability to store water to bridge times when senior rights holders get all the available water.

Not only does the state want more water to go down the river, but also climate change is changing patterns of precipitation and runoff. SFPUC is being hit with a one-two punch.

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What are some of SFPUC’s assumptions? That demand for water will grow 19% between 2020 and 2045; that San Francisco’s population will rise 39% to 1.25 million; and that average usage per resident will fall from 42 to 38 gallons per person per day; ”

The State is under legislative mandate to save the river’s fish. It has decided that the best, if not the only way to do so is to mandate that more water flow down river. It proposes to double the flow. In many years this would limit SFPUC to inadequate water. SFPUC proposes to allow some more water to flow while benefiting the fish in other ways. It would provide gravel beds for spawning, and places for fry (young fish) to shelter and thrive, and would control predators which feast on fry. It would pulse the water that flows to optimize what the fish need. All this SFPUC proposes to do by what’s come to be called a Voluntary Agreement — a settlement with the State Department of Water Resources. 

But so far the State refuses to accept SFPUC’s plan. Its experts insist that doubling river flow is the least that is necessary. Environmental groups, too, want more flow. They are keen to influence the Board of Supervisors, Commission, public, and selection of the new General Manager, all towards getting more flow per the State’s proposal.

SFPUC’s plan is not without supporters. The big one is the organization of suburban customers, who use two-thirds of the water. 

What are some of SFPUC’s assumptions? That demand for water will grow 19% between 2020 and 2045; that San Francisco’s population will rise 39% to 1.25 million; and that average usage per resident will fall from 42 to 38 gallons per person per day; 

There is tremendous uncertainty. Will the State relent and settle, entering into a “Voluntary Agreement,” allowing SFPUC to take close to the water it has customarily taken from the river, while SFPUC aids the fish with gravel spawning beds, nice hideouts for fry, and suppresses predatory bass? If the State does stick to its demand that the river runs double, does SFPUC get lucky with a big water year to fill reservoirs once every four or five years? Or does climate change raise the snow line so that the pattern of spring runoff changes to the detriment of SFPUC and its water rights? How much money does SFPUC invest in expensive recycling and in yucky water purification, or perhaps in energy-intensive desalination? Can SFPUC pull a rabbit out of a hat, finding new sources of water in an increasingly parched state? 

Water customers will be asked to pay more and use less. Those are among the few sure things. It’ll help some, but not enough. The truly consequential decisions lie elsewhere, shrouded by uncertainty.

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

June, 2021

SFPUC Commission
President Sophie Maxwell, Vice President Anson Moran, Commissioner Tim Paulson, Commissioner Ed Harrington, Commissioner Newsha Ajami 
Is Herrera the General Manager SFPUC Needs?
Steve Lawrence.
Steve Lawrence

The papers are abuzz with Mayor Breed’s announcement that City Attorney Dennis Hererra is her choice to become the next head (General Manager) of the SFPUC (San Francisco Public Utilities Commission, water-sewer-power). But…

The Mayor does appoint the GM of the SFPUC. But, she does so from a list of qualified candidates provided to her by the five member Commission. And Hererra ain’t on the list. Yet.

The Commission was busy (take word advisedly) going through the Process (sacred?) of selecting one or more qualified candidates to forward to the Mayor. The Commission had engaged, at no little expense, a search firm to winnow through the minions who might provide service. Despite the passage of weeks and months, the search firm had not yet reported in when the Mayor announced her choice, Hererra. Hmm.

quote marks

The Commission was blindsided. From its perspective it is diligently engaged in a search, in good faith and fair, for the best possible leader of an important city enterprise that has suffered from allegations of corruption. ”

The Commission was blindsided. From its perspective it is diligently engaged in a search, in good faith and fair, for the best possible leader of an important city enterprise that has suffered from allegations of corruption. 

So the Commission meeting to discuss where to go from here was...well, interesting. Many words were spoken; meanings were exceedingly difficult to discern. Commissioners are political creatures. No one wants to anger the mayor; no one wants her to ignore them and their prerequisites. But the upshot seemed to be that the Commission will not accede to the Mayor, at least right away. 

The word “stakeholders” was used more than any other. We need to hear from stakeholders (not just the mayor). Is that code for: “we’re going our own way?” 

May 25 is the day set for decision, although is that perhaps early? A postponement should not surprise. 

The General Manager’s position is important. Not only is there corruption to weed out — and Hererra is alleged to have slow-walked City Attorney interest in that corruption -- but also the GM sets the tone and charts the course of the agency. There are big problems. Number one is water supply. Our century of taking freely from Yosemite and the Tuolumne is, or may well be, at an end. The State is mandated to save the river’s fish. Or is it? Recently Newsom’s action cast a monkey wrench into plans the State water people had crafted over more than a dozen years. Newsom may be telling the State to settle with SFPUC (enter into a “Voluntary Agreement”). Regardless, SFPUC will be expected to go all out for fish, including making every effort to save water (reduce demand) and find new sources. No longer is the agency one that runs as its own fiefdom, thumb on nose, fingers waggling. It’s a new day.

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

May, 2021

utility bill shock
Just remember as you pay your ever higher combined water and sewer bill, it’s a privilege to live in San Francisco! 
The Future & Unlimited Rates

San Francisco’s Water Enterprise is rich. That’s the take-away of a recent audit presented to the Commission of the SFPUC (water-power-sewer). 

Steve Lawrence.
Steve Lawrence

The Water Enterprise, one of four SFPUC enterprises, has assets of $5.5 billion. In the year ending last year, revenues were up 16.6% to $688.6 million. Expenses were up 11%. Most of the rise in revenues came from—you guessed it—your rate increases.  

Rates Up, Up and Away!

Rates rose 8% for that most recently completed fiscal year (2020). That followed a 9% increase the year before, and precedes what they claim is a 7% increase this July 1. But your correspondent calculated the bills for a four person household, using 44 gallons of water per person, and the bill rises 7.95%. “Your value may differ.” Over ten years rates are up 138%, so they’ve doubled and more. Has your income?

quote marks

It will take a few years for SF to deplete its stored water, but rationing could begin early to prevent worse later.”

Much of that rate and bill increase is due to what was called the Water System Improvement Program. This built up infrastructure. Trouble is, at the end we’ve got fine infrastructure, but we may have insufficient water. The State’s Bay Delta Plan parches San Francisco during droughts. While SFPUC has tried mightily to change the State’s plan (aiming for what SF calls a Voluntary Agreement, or settlement of SF’s lawsuit against the State), it has had no success. So soon SF will be asset rich and water poor. Who knows what this does to your rates. But all those outstanding bonds have got to be paid, whether or not water flows. And costs hardly decrease when less water flows. Same cost, less water delivered...what happens to rates, folks? Up, up and away!

Frantic Activity

But of course that’s not all. There’s already frantic activity aimed at alleviating the upcoming shortage of water. For years SFPUC has tried to buy water, with almost no success. It’s not getting easier. Water recycling, and “purification,” are coming. Purification is...well, you don’t want to know. But how much wastewater can be purified? At what cost? 

Frantic activity doesn’t come cheap in SF. SFPUC needs to hire a GM (general manager) as it lost its old one to scandal. It faces an audit of its community benefits program. Some believe the benefits went to insiders, with crumbs at best to community. But the audit shows that SFPUC Water does pay generously for art, and also pays MTA for “water conservation.” Maintaining good city relations is important!

Sewer Shock

Your water bill is only a part of your monthly bill. (It used to be bimonthly; it was made monthly to mask increases and minimize sticker-shock.) The other half of your bill is sewer. Your sewer charge is based on the amount of water you use — nine-tenths is assumed to go down the drain. The Sewer System Improvement Program, $7.9 billion sticker price, is still in its early stages. That’s where the big increases to your bill will be coming in upcoming years. Should you lower your water use to only, say, 30 gallons per person per day in future dry years, that does not mean the cost of sewer improvements declines. Oh, no, quite the opposite. Less water will mean more expense. Now, how does that affect rates? Oh, never mind!

Just remember as you pay your ever higher combined water and sewer bill, it’s a privilege to live in San Francisco! 

# # #

Love SF Water

Water Supply for 2021 and beyond.

You’re hearing about drought. How is San Francisco doing; how much water do we have for this summer and fall? 

Enough. In early April our water system stored 77% of maximum. Average at that point is 82%, so we’re a bit low, but no worries for this year.

The future is a big question mark. SFPUC is required to report about water planning, and it has recently done so in a draft Urban Water Management Plan 2020 (issued just recently). Because the State’s Bay Delta Plan would parch us, but SF has not accepted it and still seeks a settlement (“Voluntary Agreement”), SFPUC writes about two “scenarios.” If the Bay Delta Plan is not implemented (wishful thinking), all is well. If implemented, all is terrible. Here’s the summation: “Implementation of the Bay-Delta Plan Amendment would result in system-wide shortages of 30 – 55% in single and multiple dry year periods, leading to up to 42% shortages for retail customers and 59% shortages for the Wholesale Customers.”

When does the Bay Delta Plan kick in? Unknown. Perhaps as soon as 2022. It will take a few years for SF to deplete its stored water, but rationing could begin early to prevent worse later.

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

April, 2021

drought graphic
When drought times come, and they will, San Francisco will run short
River Flows, Water Woes.

For decades the SFPUC (agency delivering water, sewer service, and power) has been walking on clouds. Pure mountain water, nearly free; power generated by the flow and fall of this water from nearly 4000’ elevation to sea level; a gravity system, mostly, to deliver the water; politicians aplenty to protect the flow; jobs and contracts to liberally disperse; support from a population that remembers the critical importance of water, and knows what its lack meant after the 1906 quake, reminded in 1989, when the Marina District nearly burned. SFPUC was so in the clover that it doled out millions to supes who used it as a deep pocket for pet projects and programs--until a rate freeze put an end to that theft a quarter of a century ago. The freeze expired, SFPUC got a new state-of-the art headquarters, expanded its staff to about 2300, raises all around, and works at its own (slow) pace at achieving its various aims and commitments.

Steve Lawrence.
Steve Lawrence

Now it looks like the good times may be in jeopardy. 

Three forces are pressuring SFPUC. First, water. For pushing a century SFPUC has enjoyed a spectacular flow of crystal pure water from Yosemite, water diverted from the Tuolumne River. But soon that free flow is likely to be choked. The State and its agencies are under mandate to keep fish alive in the river. Scientists say river flow should be at least 55% of unimpaired flow. SFPUC and its allies have them down to 40%, plus or minus ten percent, but that still means a loss of perhaps half of San Francisco’s water.

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Decades ago, when SF built its water conveyance system, it tapped water out left and right to the then minor communities along the 167- mile line from Hetch Hetchy in Yosemite. These communities came to rely on SF water ... the suburban customers were smart enough to extract a commitment ... basically the ‘burbs get the first water, the city the leftovers ... The system runs short, the burbs get first dibs, the City gets the dribbles.”

On February 5 there was a special meeting to address the matter of what to do. So far SFPUC has promoted a “voluntary agreement,” a nice term for a settlement. The State ain’t buying. It wants its 40% unimpaired flow, and feels that’s too generous. The NGOs (environmental groups, mainly) aren’t buying, either. SFPUC’s staff was tasked with presenting their case for their VA, voluntary agreement, or settlement. NGOs were invited to critique.

While there was science and jargon enough to make a head spin, the impression this listener came away with is:  not going to cut it. Desperately, SFPUC has hired good scientists and tasked them with figuring out how to keep our water. And they’ve done a credible job. But it’s probably not good enough. The fish are in desperate straits. They’ve been declining for decades. The State has been lenient, has gone easy. But that’s over.

...
While the severity of droughts have temporarily lessoned, it's only temporary

Maybe not. SF has amazing political clout. Newsom has encouraged settlement; maybe he will mandate it. But don’t count on it. SFPUC will likely be required to ensure a flow of 40%, and once drought times come — and they will — we’ll run way short.

Which brings us to force #2 pressuring SFPUC: our suburban customers. Decades ago, when SF built its water conveyance system, it tapped water out left and right to the then minor communities along the 167- mile line from Hetch Hetchy in Yosemite. These communities came to rely on SF water. When SFPUC was finally tasked with updating and preserving its water conveyance and storage assets (instead of diverting big bucks to supes’ pets), the suburban customers were smart enough to extract a commitment. SFPUC committed to deliver up to 184 mgd (about ⅔ of the system’s present deliveries). There are some exceptions for drought. But basically the ‘burbs get the first water, the city the leftovers. It’s our system, but we run it for others first. That’s the second major force. The system runs short, the burbs get first dibs, the City gets the dribbles.

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The fish are in desperate straits. They’ve been declining for decades. The State has been lenient, has gone easy. But that’s over.”

Third is our own self-inflicted wound: corruption. The SFPUC has lost its General Manager to the FBI’s corruption probe. It has happened at an inopportune time. Not only is covid slamming the workforce, but also there’s an seven-billion-dollar sewer program just getting underway. It’s already delayed. There’s also the possibility that the agency will be pressured into taking over PG&E’s job of delivering electricity throughout the city. It’s the long-time dream of public power advocates who are unlikely to be put off. In other words, there is a lot to manage other than keeping our supply of water.

Mountain water has been 85% of what is served. Groundwater has been developed; there’s no more. We’re building a recycled water plant; it’s not much. Water could be “purified.” That is taking wastewater and making it pure enough to re-serve; not appetizing, that. We could try to buy water; but in dry California, good luck with that. We’ve tried for many years, without success.

Back in 1988 your correspondent lived on 32 gallons per person per day. We crimped and saved — shower water to toilets, washing machine wastewater also, landscaping dead. Within a decade that 32 gallons may look generous. There are more low-flow devices. Still, San Francisco is down to using 43 gallons per resident per day now. How low can we go? Looks like we’ll find out.

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

February 23, 2021

digging the sewer system
Bad News and Worse News...

There’s bad news and worse news about sewer infrastructure. Most readers already will be aware of the resignation of SFPUC’s (water, sewer, power) General Manager, who has been charged with corruption. That’s the bad news. In addition, a new report about expected capital costs is out, and costs are up 42%. That’s even worse.

Steve Lawrence.
Steve Lawrence

Capital cost refers to the cost of building infrastructure, including repairing and upgrading. Since 2012 SFPUC has been spending your rate payments (included in rent for some) in part for its Sewer System Improvement Program (SSIP), a set of many projects, initial cost about $7 billion. Phase One of this big program included about $2.9 billion worth. Now that’s $3.655 billion. Completion dates have slipped too. Program management is up $50 million, a 40% increase. 

Work outside what has been considered the SSIP has been added to the to-do list. All in all, the cost is up 42%, all to be done this decade.

SFPUC need not get voter approval to sell bonds to fund its work. You-the-voter will not be voting up or down on a bond proposal. Only the SFPUC Commission (rubber stamp), and Board of Supervisors can stop the spending. Not going to happen. 

Likely the work, or most of it, is needed. Costs have risen rapidly. Why? Among the reasons are:  unfavorable market conditions and bidding environment (means contractors are busy, so they bid high; you’d like them hungry for work), project interdependencies (means it’s city work and Public Works and other departments are impacted, creating trouble), scope refinements (means we planned, we erred, we re-plan), differing site conditions (means we dug, WTF?), site logistics (city work is tough), and, of course, covid-19. 

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Among the reasons are:  unfavorable market conditions and bidding environment (means contractors are busy, so they bid high; you’d like them hungry for work), project interdependencies (means it’s city work and Public Works and other departments are impacted, creating trouble), scope refinements (means we planned, we erred, we re-plan), differing site conditions (means we dug, WTF?), site logistics (city work is tough), and, of course, covid-19.”

It’s difficult enough to run a big city sewer system. Doing so wounded (General Manager down, corruption investigations) and with covid while the recession does not even yield the usual benefit of hungry contractors bidding low and working faster has left those who pay for all this paying more; much more. That additional payment does not show up immediately: bonds are sold as funds are needed; typically payment does not even start for 18 months after bonds are sold. But pay you will. 

A previous re-pricing was done in 2018. Surely there will be further re-pricings. But costs up 42% in a little over two years is very bad news. 

A couple of the larger projects are: biosolids digesters, up $404 million to $1.68 billion, with completion delayed 28 months (now expected August 2028); Headworks up $200 million to $619 million, still to be completed by September 2023. Stormwater projects have been delayed, bad news for those who suffer flooding. Also, a project at South Ocean Beach is delayed and the cost is up; while not such a large job, should climate change and ocean storms come unlucky, lots of trouble and expense might befall SF’s sewer system.

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

December 30. 2020

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Toulemne Flow Rights Meeting
Fish Gotta Swim...

Water, Fish, and You.

November 30 SFPUC (water, sewer, power) held a special workshop focused on water supply. While it’s tempting for the reader to space out now, this will be kept simple. Promise.

Steve Lawrence
Steve Lawrence

Double the Fish

Briefly, twenty-five years ago the State set a goal to double fish in our river. It required scientists and state agencies to figure out how to do it. Lots of science has been done. The State has concluded that more water needs to flow down the Tuolumne River, the source of 85% of San Francisco’s water. (San Francisco also serves suburbs, which use about two-thirds of our water system’s water. No, we can’t cut them off.)

SFPUC screamed that if State implements its findings we’re up the river without a paddle. In super dry years, no way there’s enough water. You will be forced to ration fifty percent, that is, you get half rations of water. What is needed, SF avers, is what has come to be called a Voluntary Agreement, by which San Francisco will be nice to the river fish and their habitat, nasty to their predators, and adequate with flows of water, optimizing its use for all.

quote marks

In super dry years, no way there’s enough water. You will be forced to ration fifty percent, that is, you get half rations of water.”

We’ve been negotiating towards the desired “Voluntary Agreement” for many months. But the State doesn’t buy it. All of its study and science says river flow must be substantially increased for the fish to have any chance to increase. SF’s wishful thinking won’t wash. 

The newest commissioner on the governing board of the SFPUC, Ed Harrington, caused this recent workshop to bring together the State and SFPUC, and to see where things stand. There’s been months of talks, much expressed optimism, but little actual evident progress; let’s come together and we’ll hear from both sides. 

Reliance on Hetch Hetchy Water Supply

It was typical Harrington. He gets to the nub, fast. 

River Flow and Voluntary Agreement

However, to this listener, the State has a very convincing case. While the target of doubling fish in the river may have been wishful, it’s law, and the state agencies can’t completely ignore it. All their science and expertise points to flow (river flow) as the key factor to increasing fish. And San Francisco’s proposals, as set out in its proposed Voluntary Agreement, just don’t yield flow. You can’t have your cake and eat it too, and the river can’t have its required flow and let SF take the water out it says it needs. 

...

SFPUC’s response to the State’s presentation was essentially: we’ll review and let you know later. It’s been months. Staff must have seen this science presented before. Staff’s response seems lame. While there is politics that supports the desirability of reaching a Voluntary Agreement—a settlement essentially—science and the weight of expert opinion does not. 

If the State sticks to its guns, SFPUC staff essentially says our Hetch Hetchy water system will be left high and dry.

Not only will our water system be parched, but also fish are subject to suffering from heat. Climate change is raising temperatures. Low flows would raise water temperatures further. Fish thrive in cool water.

We water customers can only hope that our Hetchy watershed, which with climate change is on the border between “gets more precipitation” (Northern Sierras), and “gets less precipitation” (Southern Sierras), could, conceivably, turn out to be on the beneficent side of that line. More precipitation might bring relief.

Still, the State is understandably unwilling to bet that more precipitation will help the fish it is charged to protect. It seems that SFPUC and our water system is in trouble. Perhaps SFPUC can yet engineer a political win, but it sure looks like it is struggling to row a leaky vessel upstream.

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

December 2020

The Irony of Progressivism.
PG&E Headquarters
PG&E, Sacramento 1912

It’s the fashion among progressives to hate PG&E. It’s old, hide-bound, slow and unresponsive. Replace it with local control! Fight climate change! More renewables! Power to the People!

Steve Lawrence
Steve Lawrence

Consider how public utilities formed more than one hundred years ago. The wonder of electricity was first brought to densely populated places where it made best economic sense. Progressives of that day advocated that all should enjoy the benefits of this new power miracle. But how can the nation provide electricity to rural and less populated places where it is uneconomical?

quotes

Back in the early days public utilities were formed so that public officials would not steer the ship of modern electricity. Public officials were corrupt, or corruptible. They would use their power to benefit their supporters, and punish opponents. Better to empower those removed from the insidious public fray to captain a new public service organization. An oversight board, here the state Public Utilities Commission, would review, and ensure fair treatment.”

The solution was public utilities. By combining a large number, including both densely populated cities and rural areas together, it was possible to extend electricity to outlying places where providing the service was less economical. All would share in the cost; all would receive this modern benefit.

old photo of laying pipeline across California
Laying pipeline across rural California

Decades later, though, “progressives” have morphed into those favoring local control. They found fault with the crusty institutions their grandparents had birthed. They demanded more renewables, sooner.

How to accomplish the new progressivism? Split off areas where it is most economical to provide power. Require PG&E to distribute power for CCAs — community choice aggregations, the local power providers. 

Back in the early days public utilities were formed so that public officials would not steer the ship of modern electricity. Public officials were corrupt, or corruptible. They would use their power to benefit their supporters, and punish opponents. Better to empower those removed from the insidious public fray to captain a new public service organization. An oversight board, here the state Public Utilities Commission, would review, and ensure fair treatment. 

But today all that is forgotten. Local control empowers local pols, allowing them to steer contracts and jobs. Kicking PG&E is fashionable and makes for good publicity. Legacy facilities (like nuclear) that didn’t work out? No problem for the new CCAs that modern progressives create. Service hard-to-reach rural areas? No problem (or cost) for the dense cities, like San Francisco, which formed their own CCA: CleanPowerSF. Let the flyovers fry.

Folsom Powerhouse
Folsom Powerhouse, Sacramento 1920

Today’s progressives, who like to style themselves “on the right side of history,” are on the selfish side. No worries about those rubes living in flyover land. Local control. We’re for renewables. How virtuous are we? Our CCA can outbid legacy utilities (PG&E) for renewably generated electricity because we’ve shed burdens, and their higher costs; we run lighter.

Never under-estimate the power of fashion, and of forgetting.

###

Here are two SFPUC programs readers, or their friends or family, may wish to know of and take advantage of:

Small Business Relief Program: Through our Community First Bill Relief Program, you are able to lower your monthly utility bills by up to 20 percent for the next six months.

Emergency Community Assistance Program: Our Community Assistance Program (CAP) helps single-family residential customers pay their water and sewer bills, with eligible customers receiving a 15 percent discount on water and a 35 percent discount on sewer service charges.

Go to sfwater.org and search, or call and ask 415-551-3000.

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

November 2020

Proposed Biosolid digesters
Proposed Biosolid Digesters
Can Ed Harrington Save the SFPUC?

Two of the five commissioners who oversee SFPUC (San Francisco Public Utilities Commission: water power sewer) have resigned. Ed Harrington, a former General Manager, has been added to the Commission, which now has four seats occupied, of five.

Ed Harrington
Ed Harrington
Photo: UCSFCA.com

Ed Harrington is a welcome addition, to say the least. Two leaders ago, SFPUC delayed performing its Water System Improvement Program, a series of eighty some projects. Mr. Harrington stepped in and got the program going.

Perhaps today’s situation is similar. Today SFPUC has launched its $7 billion program to update city sewers and treatment facilities (called SSIP). It is bigger and even harder than the water program was. Early going has been slow. Usually, costs only rise, and slow going almost always means extra cost. 

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...the largest job, almost a billion dollars, has not gone well. The so-called biosolids digesters are tanks half in the ground, half above, that digest solids in sewage — the heart of the operation. Since the contractor has begun, his pre-construction services have increased in cost by a factor of 18 times. Lately he wants to re-write his contract’s payment provisions. And it looks likely he’ll get his way.”

While commissioners have limited authority, a ray of hope is to be seized and celebrated.

Illustrative of what has been happening, the largest job, almost a billion dollars, has not gone well. The so-called biosolids digesters are tanks half in the ground, half above, that digest solids in sewage — the heart of the operation. Since the contractor has begun, his pre-construction services have increased in cost by a factor of 18 times. Lately he wants to re-write his contract’s payment provisions. And it looks likely he’ll get his way. The project has already been delayed. It is to be completed in 2027. The system design covers expected demand only through 2045. It has taken more than five years to design this project, and design apparently remains unfinished. Once the work is done, staff must learn the new system, which is much more difficult than what they operate now. 

Existing Digesters

Although the contractor’s re-write of his contract may be innocuous, your columnist worries that it sets up delay and claims. It is unusual for a contractor to re-write a public contract.

The largest project of the water program overran its cost and time, doubling and more. That project was a third the size of the SSIP biosolids digester job. Doubling this job’s cost and time would significantly raise rates. Already rates are rising fast, doubling about every eight years. (All homeowners pay water and sewer bills; sewer is based on water usage. Renters pay indirectly. Because business pays most SF taxes, an increase in water and sewer rates is more impactful for residents than is a tax increase.)

Rendering of proposed biosolid digesters
Proposed Biosolid Digesters

Rumors swirl about whether SFPUC bigwigs are targets of the FBI investigation into corruption (Nuru). Time may tell. Doling out of community benefits is a ripe area. Briefly, the way it works is a contractor promises to spend say 1% of his contract price on community benefits. Then he asks the bigwigs to steer to whom, when, and how. It’s essentially a slush fund. The direct loss of public funds is only a portion of the loss; bigwigs spend time, time not spent managing neglected projects, which then overrun. Their organization may lose respect; morale sinks. Early this year the word got out that the FBI was investigating; much of this truncated year may have been spent worrying about what the FBI would find.

Hopefully the ship is not rotten. Rough waters ahead.

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

October 2020

Free Government Money. 
SFPUC Assistance graphic
Steve Lawrence
Steve Lawrence

Does Your Household or Small Business Qualify for Lowered Bills? Low income residents can reduce water-sewer bills by 15 and 35%. Low means less than a maximum income of $34,480 for one or two person households, $43,440 for three persons, $52,400 for four, $61,360 five, etc. Other requirements apply: residency, bill in your name, sole account, not a tax dependent. Apply to SFPUC: Community Assistance Program. Sfwater.org.

Small businesses, including non-profits, with 50 or fewer full time equivalent employees before the virus hit, and with a active, standard water and wastewater account in the name of the business, or of its owner or manager, but not its landlord, can get 20% off bills if the business has lost revenues due to covid-19. Must apply before year’s end, but apply now as once funds run out, done.

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While the FBI is investigating city bigwigs, SFPUC personnel included, the investigation has nothing to do with the above gifts of public funds. Everyone in power is complicit in forcing the rate payer to “donate”

Or perhaps you are a customer of CleanPowerSF and entitled to free money. Here’s the program: “CleanPowerSF customers who are enrolled in the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) low-income programs by September 30, 2020: (1) a credit of $50 for single family residential customers, (2) a credit of $3,000 for multi-family residential customers, and (3) a credit of $750 for non-profit small-commercial customers.”

Everybody loves free, right? Well perhaps we shouldn’t. It is one thing for private individuals and companies to give freely. It’s another for public agencies. Public agencies are giving other people’s money, rate payers’ money. SFPUC rates are based on cost. The more cost, the higher the rates. Sure, it’s popular to give freebies. As the Band sang, but when the money’s gone, they (friends) won’t be ‘round again. Lavish spending is a road to popularity. What agency, what General Manager, doesn’t want to be popular? Plenty of friends. By spending other people’s money.

Once upon a time in our state’s legal history gifts of public funds were null and void. The giftee was liable to pay them back. It was understood that public money is different. Public officials were as fiduciaries; public money was a public trust. You don’t give it away. Even a contract improperly made was voidable, and then payments under it were to be returned. 

But today’s world is one of helicopter money. Rain down on me. This may work to save the economy from depression. But giving out city money to the “needy,” who are often those in the know, perhaps friends of those in power, customers who are informed, enables corruption. Public officials who have the power to give away money and benefits are public officials to whom would be giftees suck up, or perhaps get the dirt on to use as leverage. 

Gifts of public funds should be identified as corrupt. 

“Community benefits” is just one more form of giving public funds. Big SFPUC (San Francisco Public Utilities Commission) contractors are required to give one percent to benefit the community. While supposedly the contractor steers the gifts, come on, you know that is not so. The contractor is keen to give to those favored by those who are managing the contract. Now it’s a way to avoid open public process, to hide. Millions in community benefits are being doled out by SFPUC, and the rate payers pay for every dollar. It should be a crime to waste, to give away, public funds. 

While the FBI is investigating city bigwigs, SFPUC personnel included, the investigation has nothing to do with the above gifts of public funds. Everyone in power is complicit in forcing the rate payer to “donate” to chosen donees — steered by the SFPUC powerful.

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Half of SFPUC’s employees are “working at home.” This will continue at least until August 31. But an extension of 12-18 months is expected. Meanwhile covid-19 is constantly heard as an excuse for delays. Unlucky SFPUC employees, not “working from home,” complain that their work conditions are unsafe.

SFPUC loses revenue due to the virus.  But its General Manager claims that the budget is being revised and all is well. 

SFPUC has adopted an agreement to spend to promote fish in the Tuolumne River. While it had been hoped that this agreement would be one with the state authorities, and, would supplant a harsh order to reduce river water taking, the “agreement” made is with SFPUC itself. That is, it appears to be a document that commits to action which environmentalists want before reaching settlement with the state. State authorities won’t negotiate. So, without reaching a negotiated settlement, SFPUC agrees to do what it puts on the negotiation table. It’s an odd tactic.  But there you are. Ever willing to spend your money is SFPUC. 

Usually meetings of the SFPUC Commission are boring and sparsely attended, even though you pay rates that are rapidly rising at more than four times inflation. But Balboa Reservoir and the TRVA (Tuolumne River Voluntary Agreement, mentioned above) did bring out people ready to have their say. At times commissioners looked uncomfortable. One abandoned the meeting. Another talked about continuing action on the voluntary agreement when amendments became so confusing that no one could follow them, or understand what they said. With these fireworks out of the way, expect a dull summer ahead.

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

August 2020

SF PUC Watch

Steve Lawrence
Steve Lawrence
Chaos at SFPUC

It’s chaos at SFPUC (water, sewer, power). Costs are escalating, and delays are ubiquitous. The virus is a much-used and oh-so-convenient excuse. “We couldn’t complete the rebaselining during the virus, so now we hope to complete it in the Fall.” How does a job to be completed in a couple months next come to have a schedule ending a good six months out? Welcome to today’s SFPUC.

Editor's note: Essentially, rebaselining is the act of recording your original project estimates so you can compare them to actual results at a later time. Re-Baseline by implication represents updating or modification of a projects baseline, as a result of any approved change to the schedule, cost, or deliverable content.

cutting credit card

To its credit, at a recent meeting the Commission spent ten minutes asking about delays. Not all commissioners; some are apologists, and all prefer not to confront or sharply question staff. At the end of its ten-minute foray into delays, the Commission quickly accepted a presentation on a vague topic to occur two meetings hence.

It is clear that much is far from well. Design that took years to do is being jettisoned, and a re-design of digesters, now a nearly $1.7 billion project, is being done on the fly. Apparently, foundation piles will start, maybe this summer, before the re-design is complete. What could go wrong? This is how your hard-earned money is spent? 

The largest project of the WSIP (water system improvement program), the program to upgrade the water system that led the way for the larger SSIP (sewer system), overran its budget and time by more than doubling. Big projects tend to generate big overruns. The SSIP’s biggest project is more than three times as costly to begin with. Ratepayers can’t afford it to double.

When San Francisco was booming it could more easily afford profligate spending on public works. With tomorrow’s economy?

quotes

The Commission, which is supposed to look after the public’s interest, is a sinecure for special interests and supporters of the mayor. There’s the labor seat, the environmental seat, and so forth ... The mayor just wants minimum trouble; she’s got plenty to do on other fronts.”

Yet so far there seems to be little political pressure. Rates don’t need to rise until years after spending occurs. Then they must rise; the bonds must be paid off; there is no remaining choice but to raise them. The disconnect between when action is required, and when pain is felt, means that pressure to take corrective action arrives too late. 

The Commission, which is supposed to look after the public’s interest, is a sinecure for special interests and supporters of the mayor. There’s the labor seat, the environmental seat, and so forth. You don’t get ahead by making big waves. The mayor just wants minimum trouble; she’s got plenty to do on other fronts.

The General Manager is sleepy. Delay doesn’t faze him. His job is to protect his troops. They’ll get the job done “right;” it takes as long as it takes. Cost overruns? An irritant.

It’s a recipe for pain for the ratepayer. Rates have been rising at least three times inflation, and with the SSIP and its costs and delays, rates are sure to rise at a similar, if not greater pace for the next decade and more. Meanwhile, the stink from old digesters wafts on. God help us if a quake strikes. A literal s---storm might well erupt.

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

June 17, 2020

When We Need Leadership the Most

Leadership. It’s probably as hard to mine good from our virus experiences as it is to change lead into gold—the aim of alchemists, “scientists” of old. But if only for financial reasons, perhaps we should try. Covid-19 is taking a bite out of our financial apple. San Francisco’s apple is large and juicy, but even San Francisco should work to reduce inefficiency in the wake of this virus.

SFPUC (San Francisco Public Utilities Commission), our provider of water, power and sewer service is inefficient. Its leader is sleepy. Delays are tolerated. Pressure to perform is largely absent.

While water and sewer bills are not taxes, they are worse. They hit ordinary people harder. In SF businesses pay most taxes. If government is inefficient in delivering services, business suffers more. But when it comes to water and sewer, it’s the other way around. Ordinary folk suffer more. Rates are like taxes. And rates are determined by cost. When costs rise, so do rates. Rent? Well, you still pay for water and sewer indirectly.

quote marks

While water and sewer bills are not taxes, they are worse. They hit ordinary people harder... Ordinary folk suffer more. Rates are like taxes. And rates are determined by cost. When costs rise, so do rates.”

Harry Tracy Water Treatment Plant
The Harry Tracy Water Treatment Plant in San Bruno, has an expanded treatment capacity. Photo: SFSPUC

Recently the Water System Improvement Program (WSIP), $4.9 billion, has been delayed again. How many times has it been? Far too many. It will finish up, if it sticks to this latest schedule, eight years late. At launch this was a thirteen-year program (shortened for a time to 12); despite downsizing the scope of work, it’s become a twenty-year program.

But such delay is not unusual under current leadership. Schedules are routinely breached. Digesters are delayed ($1.3 billion budgeted), low-profile wall at South Ocean Beach too. The miles of water and sewer pipe replacement just about never meets target. There are far too many delays to catalog. 

hydraulic improvements
Five new filters were added as part of the hydraulic improvements made to the water treatment facility Photo: SFPUC

The tacit “deal” San Franciscans made with Willie Brown is in default. Willie got things done. Sure, they were his things (downtown Brown; Bay Bridge on the side I pick). But mostly they got done. But Willie’s progeny are, too often, not getting the job done timely. We tolerated this in good times, but the times are not so good anymore. 

SFPUC has a Commission of political appointees who don’t rock the mayor’s boat. The mayor is progeny of Willie Brown. The head of the SFPUC is too. He’s tangled with an assistant GM, with whom he’s said to have, or had, an affair. She comes burdened with ethics violations past, and questions present. 

There’s too little focus on getting work done, and too much on distractions. It’s costing ordinary folk money—and not small money. If this virus focuses attention on municipal waste, that’s a silver lining. Let’s start by flushing the leadership that’s not getting the job done.

###

Police files. In many jurisdictions police personnel files are shut. They should be open. Officers’ complaints and discipline should be on display so that bad apples can be weeded out.

We need to take constructive action. Protesting is all well, lets off steam, but to what end? Another “reform?” We’ve already tried many of those. Chiefs are already black. Reforms have yet to work.

We all know that some officers are thugs. They are tolerated and, in a way respected. They do dirty work others prefer to avoid. But after George Floyd they need to be spotted and booted. 

Sure, the POA (police officers’ association) “negotiates” to keep files shut. It negotiates with pols who want POA’s endorsement, and surely want to avoid its wrath.

It is because understandable human self-interest undermines the general welfare that there should be a constitutional right to open files and records. If there were, watchdogs could weed out the bad apples, or at least put them behind a desk. Gavin Newsom, running for Prez’24, might lead the way.

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

June 2020

Hold Up on that “Insurance” for Your Water and Sewer Lines

Steve Lawrence
Steve Lawrence

By mail homeowners have received a solicitation to buy insurance for their water and sewer lines. The offer comes on the letterhead of San Francisco Water Power Sewer, the new appellation of San Francisco Public Utilities Commission (SFPUC), as well as American Water Resources Insurance Services. What is this; is it legit?

In bold and all caps the solicitation says IMPORTANT INFORMATION FOR SAN FRANCISCO HOMEOWNERS. The Subject is Homeowner Service Line Repair Responsibility. The text suggests the homeowner is to “enroll,” if you’re responsible. Don’t be fooled: you’re being sold insurance. Do you have a choice? Yes you do, although the letter veils it. 

SFPUC did authorize the use of its logo and name. What the reader of this Notice letter does not discover is that SFPUC receives $3.61 per month per enrollee. SFPUC expects to receive more than one million dollars. If the enrollee picks the plan that covers both water and sewer lines, SFPUC skims 28% right off the top.

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Don’t be fooled: you’re being sold insurance. Do you have a choice? Yes you do…

SF Water Power Sewer insurance scam

This is your trusted local water agency? The one you trust to provide you and your family with pure water, continuously, and sewer service? In bed with a sleazy insurance company? 

The actual insurance company turns out to be Virginia Surety Company, Inc. out of Chicago. But you only find that out if you make a call and get referred to the online Terms — to which many will “agree” without ever reading. 

American Water Resources has long-time connections with SFPUC. AWR was one of two bidders for this business. Usually the low bidder wins. But here the high bidder won. Presumably tvhe company paying SFPUC most per customer (enrollee) won. How’s that for looking out for your interest? 

Worse, if one reads the Terms, much is not covered (insured). “Yes, I want protection and peace of mind,” reads the enrollment form. You decide:

Exclusions: Damage caused by the actions or negligence of You or third parties; 

Breakdown...earth movement caused by normal settlement and not caused by natural disasters or other external forces (external forces includes Your actions and the actions of third parties).

Good luck urging that settlement that caused your line to break was “normal” and not caused by a natural disaster or human actions. Also, if your lines do not meet building code, no compensation for you. Do you know whether your lines comply?

At the hearing at which the Commission approved this business the General Manager stated that SFPUC wanted homeowners to understand their obligation to maintain their sewer and water lines. Perhaps this offer will inform some that they own and are responsible for the pipelines on their property. But allying with this insurer, and skimming more than a quarter off each payment, seems...well, sketchy at best. This is not how to build trust and confidence.

Nor is it the first instance of sewer line funny business. Back in the early part of the last decade payments to sewer repairers soared, and were found to be for unnecessary work. Seems when the City goes underground, things often stink. 

* * *

Drought? As of early February system reservoirs are 86% full. That compares to 80% average, so despite the paucity of rain this winter, water supply is still in good shape.  

February 2020

Who in this rich city cares about price anyway?

Steve Lawrence
Steve Lawrence

CM/GC—Moneymaker. “CM/GC” stands for “construction manager slash general contractor.” It is a new method of contracting now in favor with the SFPUC (water-power-sewer agency). Is it working?

The old method of contracting, required of most public agencies but not of SFPUC, is “design-bid-build.” First the city, or professional engineers it hires, designs what it wants—a new facility, or repairs or update to an existing facility. The designer prepares plans and specifications so that competent contractors can understand what is required, and then competitively bid for the job. Sealed bids are submitted all at one time; the low bidder wins the job. The public gets the lowest available price. The possibilities for hanky-panky—for corruption—are minimized.

Well, that’s no fun for public servants. And who in this rich city cares about price anyway?

And so a new means of contracting for public works has arisen: CM/GC. Here the SFPUC makes a deal with a firm that “manages” the construction, and also does a portion of the work itself.

quote

Why is the public fleeced? Well, don’t worry about it, it’s in the future. The bonds that pay for today’s work (and lunch) won’t be paid off immediately. Payment begins in a couple of years, and then continues for thirty years thereafter. During all those years in the future homeowner bills will be higher.

The first thing the firm does is review early city plans, and rearranges and completes them. This involves, undoubtedly, many long lunches with officials, where the new scheme is thoroughly chewed, swallowed and digested. Often more testing and study is done. Eventually, all become convinced that they have a fine plan.

Both of the largest two projects of the SSIP (Sewer System Improvement Program, $7 billion) are being accomplished by this new CM/GC model. And in both the first thing that happens is serious revision of the project. Naturally the price rises. Quite a lot. And that’s before construction even begins.

The largest job, new digesters, has been delayed “a year,” so it is now said, but don’t bet on merely a year. The price rise is even more understated: at present $39 million.

The second largest job, new Headworks, is up in cost 37% before construction begins. No delay for the time being, it is said, just an extra $90 million, and also no backup electrical generation.

Why does this happen? Why is the public fleeced? Well, don’t worry about it, it’s in the future. The bonds that pay for today’s work (and lunch) won’t be paid off immediately. Payment begins in a couple of years, and then continues for thirty years thereafter. During all those years in the future homeowner bills will be higher.

Not only is the pain of payment delayed, but also there is the SFPUC Commission. Theoretically the five commissioners are there to pay attention to rates. But the position of SFPUC commissioner is a political plum. In recent years commissioners have come to have special constituents with other agendas. There’s the environmental commissioner, the labor commissioner, and the commissioner from Bayview, each concerned perhaps not so much with the ratepayer but with a subset of our SF community. Not that commissioners have the time, information and expertise to evaluate or understand what they routinely approve, anyway.

Maybe the SFPUC staff understand. But it has learned how best to deal with the Commission. The appearance of propriety and deference is important. Actual understanding not so much. Keep it simple (for the…).

Sophisticated CM/GCs are hip to the new game, of that you can be sure. Where there’s money to be made… So yes, CM/GC is working—for some.

* * *

Public Power Surge? CleanPowerSF, the city’s rather new purveyor of public power (a division of SFPUC) already generates, or buys generation, to supply most electricity used in the city. Today PG&E distributes that power over its lines. The city offered $2.5 billion for PG&E’s facilities (lines and more) so that CleanPowerSF could distribute power as well as generate, could do it all. PG&E turned the offer down. But in bankrupcy, PG&E is not entirely in control. Who knows what the city’s spark might light?

Scott Wiener, one of the progressive supporters of public power, says the politics has shifted: more people understand that “PG&E is not up to the task.” How many blackouts have you experienced in recent years? Even if PG&E is deficient, what makes Scott think the city will do a superior job?

Naturally CleanPowerSF says that it is ready, willing and able. It can hire experienced PG&E employees. It will bravely take on the distribution infrastructure—after modifications necessitated by the split into two separate jurisdictions, city and PG&E. Perhaps. But don’t bet on a glitch-free transition.

* * *

Bonds Away. Does Prop A ever lose? It seems a safe bet that the $600 million bond for affordable housing will prevail. All the city swells gush for it. And “Prop A” just sounds good. Besides, who can say no to affordable housing? Everyone should be for that. Let’s not think about whether government’s steadily increasing intrusion into what once was mainly a private market is working to promote the general welfare. And certainly let’s not think about less expensive and intrusive ways to accomplish the same end. For example, for each new unit with less than median rent the city could provide a subsidy equal to half the difference between median and the unit’s rent. But elected officials naturally want control to remain with them and the nonprofits they influence. Once the money is secure, it often is years and years before it is spent. Having money is power. Once spent, gone.

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

November 2019

Time for a Change?

Steve Lawrence
Steve Lawrence

Is it time for the Water-Power-Sewer department (SFPUC, San Francisco Public Utilities Commission) to consider hiring a new General Manager?

Today and for the past seven years the GM position has been and is occupied by Harlan Kelly. Under Kelly SFPUC has nearly completed the $4.9 billion program to renew the water system, and has begun an $8 billion renewal of our sewer system. CleanPowerSF has been formed to provide greener power (electricity) to San Francisco. These are impressive accomplishments.

But time takes its toll. Circumstances change. A leader for one time may not be optimal for another.

Kelly and SFPUC are no strangers to procrastination. The agency he presently leads, and the city, can ill afford costly delays.

The largest project of sewer system renewal, building new digesters, is off to a bad start. Right out of the box the billion dollar job is delayed a year, at least. If we get it done at a loss of less than a billion we should consider ourselves lucky. Too, there will be delay in having new up-to-date digesters. With each month of delay there is risk that the old ones fail, causing damage and more expense. As it is, the new digesters are only sufficient until 2045, for less than twenty years.

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...the largest project of the water system renewal, Calaveras Dam. This job is still not complete. By its end will have overrun by more than five years, and more then $300 million; it has more than doubled in cost.”

The delay to digesters comes on top of the long delay to the largest project of the water system renewal, Calaveras Dam. This job is still not complete. By its end will have overrun by more than five years, and more then $300 million; it has more than doubled in cost.

In addition to project delays there is dealing with problems within the agency. Or rather failure to deal with same. It is alleged in a legal complaint that one of Kelly’s employees wrongfully terminated an older, black employee three days before his probationary period expired. Further detailed allegations of this complaint paint a grim picture of employment within Kelly’s SFPUC. If allegations are even partly true, there are reasons to question his stewardship.

More questions are raised in the area of community benefits. These are payments, usually through contractors, to organizations said to be doing good works in San Francisco. Under Kelly’s leadership the employee in charge, one who has had her troubles with ethics and been fined, has remained in charge despite questions and allegations. Community benefits are too easy to corrupt; special diligence is wanted.

In 2003 Kelly came to the organization from within the City family. He soon got in trouble by repainting his brand new SUV at a cost of more than $5000. While a second chance for this peccadillo was warranted, it is not forgotten.

Kelly serves at the pleasure of the Commission. Commissioners are given their positions by the mayor as a political plum. Absent direction from the mayor, it is probably unlikely that the Commission will take the initiative. But it should.

Civic organizations benefit from periodic renewal.

Today challenges abound. A $2.5 billion offer has been made to acquire PG&E power facilities in the City. This would require major expansion of an already large organization. The City and PG&E have been in litigation for years. Whatever deal is made, expect pay-back. Will PG&E’s best employees be transferred to the City? Should the deal go through, not only will City employees service your power outage, but also new employees, hired in a tight labor market, when cost of housing nearby is high, will do the servicing.

The State has announced plans to seize a portion of the City’s Sierra water supply. While SFPUC continues to try to talk the State out of some of this water grab (to protect fish), hoping for a Voluntary Agreement, SFPUC’s customers are already whipping the agency into line to find replacement water.

Kelly seems tired. One sees that in his demeanor during Commission meetings. Work is likely to grow harder with the $8 billion sewer renewal program, including the already delayed digesters, and possibly a whole new set of electrical facilities and employees to manage. It is time to review options.

If removal were desired, the procedure seems to be that the mayor recommends removal of a department head to the Commission, which acts within thirty days. Then the Commission submits at least three qualified candidates for replacement, and the mayor chooses or rejects; BOS may nix on two-thirds vote. Kelly’s employment contract is at-will.

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

October 2019

Water-Sewer-Power: A Primer.
Steve Lawrence
Steve Lawrence

We begin the “school year” with a primer: What is the San Francisco Public Utilities Commission (SFPUC, water-sewer-power), and what does it do?

SFPUC is a billion dollar public business. The City calls it an Enterprise Department as it generates its own revenues. Those revenues are mainly from your monthly water and sewer (wastewater) bill payments. Thousands of employees are busy, from San Francisco to the Sierras, where most of our water originates. SFPUC headquarters is at 525 Golden Gate, in the Civic Center. Its general manager is Harlan Kelly, husband of the City Administrator.

SFPUC employs numerous private companies by contract. Construction contractors do most building; engineering companies do much planning and design.

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In the past rates were used by the City as a sort of slush fund, paying for Supervisors’ and Mayors’ pet programs, unrelated to water and sewer. Corruption and waste are ever-present concerns where public money flows. SFPUC is the one city department that need not get voter permission to sell bonds.”

SFPUC’s Water Enterprise gathers and purifies water for City residents, and wholesales water for about 1.8 million of those living south and east of San Francisco, our suburban customers. The Wastewater (sewer) Enterprise treats and discharges City sewage and storm water (plus a bit from outside the City limits). Wastewater is treated at one of three plants. One, North Point, treats only during the wet season when flows are large. Eighty percent of the City’s wastewater, from the Eastside, is treated at the Bayview (Southeast) plant. Twenty percent, from the Westside, is treated at the newer Oceanside plant south of the Zoo. While the sewage of Westside residents does not flow to Bayview, that plant holds interest for Westside residents because your sewage rate pays for it, and will be paying for its improvement—now underway.

Since 2003 SFPUC has been engaged in upgrading aging facilities, first water (Water System Improvement Program, WSIP, $4.9 billion, now nearing completion) and recently sewer (Sewer System Improvement Program, SSIP, $7 billion). SFPUC sells bonds; these are paid off over 30 years. The cost of $7 billion will be well over $10 billion once interest is also paid to bondholders. Your monthly rates rise to pay off the bonds, as well as paying for ever rising salary and operating costs. Rates have been rising at multiples of inflation, and are expected to continue to do so. For example, recently sewer rates rose in one recent year 11%.

Recently SFPUC also operates an electricity provider, CleanPowerSF. City facilities long generated electricity for MUNI, City Hall, the airport and Port, power generated when water falls from the high Sierras. Now CleanPowerSF also buys renewable power on the market, and sells to ordinary consumers—you. It may buy PG&E facilities and undertake to distribute electricity citywide. (Generation of electricity, and distribution of it, are separate functions.)

Recent SFPUC issues include: the $7 billion SSIP (sewer program) is off to a shaky start, with its largest project, building new digesters, delayed by at least one year; the cost of that delay will be at least $39 million, but expect much more overrun. From PG&E CleanPowerSF may buy electricity distribution facilities of unknown value and condition. The largest project of the WSIP (water program) remains incomplete; its cost has more than doubled. The State mandates that the volume of water coming down the Tuolumne River be doubled; SFPUC will lose much of its water; how will the lost water be replaced? Or, can SFPUC convince the State to accept a remedy that forfeits less water?

Governance is ever a concern. SFPUC is led by a Commission of five appointees of the Mayor. The City Charter and oversight groups guide as well. SFPUC has recently let a billion and a half of work without competitive bidding—which is not necessarily required. This raises questions of whether, through our rates for water and sewer, residents overpay. In the past rates were used by the City as a sort of slush fund, paying for Supervisors’ and Mayors’ pet programs, unrelated to water and sewer. Corruption and waste are ever-present concerns where public money flows. SFPUC is the one city department that need not get voter permission to sell bonds.

After the City’s private water provider failed to deliver water needed to extinguish fires in April 1906, after the Great Earthquake, San Francisco stepped up. It obtained permission to tap a watershed in Yosemite, built a gravity-flow conveyance system, and has since enjoyed abundant, exceedingly clean water, 85% from the Sierras. Over the years it has acted to clean wastewater so that discharges in Bay and ocean are acceptably clean. SFPUC is and should be proud of its accomplishments. Yet there are inevitably warts, too. Please return here for more on accomplishments and warts.

* * *

Necessary? California has a new standard for when police may use deadly force—that is, shoot: “when necessary in defense of human life.” “Necessary” replaces “reasonable.” Suppose there is a hostage situation; you’ve probably seen the police shows on TV. Perp has a train car (or MUNI bus) of 15, and a gun. Perp tell authorities no one need get hurt; he just needs a helicopter, or plane, and money. False moves by authorities, or failure to do per demand, then and only then does someone get hurt. “Necessary in defense of human life?” Were you the police, would you risk finding out?

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

SEPTEMBER 2019

C’est la vie PG&E
Steve Lawrence
Steve Lawrence

Will SFPUC kick PG&E out of town? With PG&E in bankruptcy it’s possible. Both mayor and Board of Supervisors have directed SFPUC (water, sewer, power) to investigate acquiring PG&E’s City infrastructure, and report.

A preliminary report to the mayor is in. It fails to answer all of her questions, but is a start. The report identifies three levels of involvement from which to choose.

First, background: Just a couple of years ago PG&E was the main provider throughout the City. There were exceptions. Hetch Hetchy powered City Hall, General Hospital, MUNI, the Port and airport. PG&E distribution lines were used.

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So what’s the problem? What will it cost? SFPUC doesn’t know: “a few billion dollars” to buy PG&E assets. In what condition are these assets? Unknown. How difficult would it be to integrate the PG&E assets with City facilities? Unknown...”

A couple of years ago, with the advent of SFPUC’s CleanPowerSF, the City began supplanting PG&E. Homes and businesses, not just municipal customers, were enrolled. PG&E does still distribute the power over its lines, and bills. CleanPowerSF generates, buys and supplies cleaner electricity.

Electric power comes from the grid. The origin of any electron that lights up your light is unknown. It’s an accounting thing. CleanPowerSF buys and generates, and supplies to the grid as much electricity as its customers take from the grid; PG&E too.

Now, with PG&E’s bankruptcy, the idea is for CleanPowerSF to supply possibly all of the electricity used in the City, and to take over the lines and distribution facilities that have long been maintained by PG&E. Workers at those facilities, and on those lines, would no longer be riding in PG&E trucks; they would be City workers.

Returning to the three levels identified in the report, the first option is to very modestly increase City involvement in providing power -- essentially the do-nothing option bureaucrats routinely trot out and reject. The second is a targeted increase in distribution. The third, serious option, is full takeover.

Many reasons are advanced for full-takeover, but the first among them is to take control and be in the driver’s seat in the City’s effort to be greenhouse gas free by 2030. Lacking control of electrical facilities is a path to failure, implies the report. PG&E is roundly disparaged as well: unsafe, unreliable, uncooperative, etc. Seventy percent of San Franciscans are said to favor kicking the bums out.

So what’s the problem? What will it cost? SFPUC doesn’t know: “a few billion dollars” to buy PG&E assets. In what condition are these assets? Unknown. How difficult would it be to integrate the PG&E assets with City facilities? Unknown, but there is a shortage of electrical workers. How difficult will it be to hire skilled workers given SF’s housing and cost of living?

The upshot is: the matter needs more study. Stand by.

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Last month this space raised an alarm concerning the largest active SFPUC project: the $1.3 billion bio-solids digesters, part of the $7 billion Sewer System Improvement Program (SSIP). The digesters are located in Bayview and will be the heart of sewage treatment. Digesters are big tanks. They will be half in the ground and half above, about 65 feet tall above ground. Sewage is separated into “solids” and water; digesters take the solids. Bugs eat (digest) the sewage, then die; the resulting sludge is disinfected and hauled off for fertilizer.

New digesters (the old ones from the Fifties are beyond their useful life) were to be completed in 2024, but now, with a year’s delay, 2025, and operational in 2026. The new digesters are designed to be sufficient until 2045, only twenty years.

Alarm was raised in this space because, right out of the starting box, the job has been delayed one year. Cost implications are yet undetermined. Is the job being drawn out to optimize profitability? That is what happened on the largest job of the soon-to-be-finished water program. Calaveras Dam more than doubled in cost and time.

Who is in charge? The unusual method of contracting used for the digesters calls for “collaboration.” The foundation for the digesters is still unknown. Study continues. No one seems in charge. Decisions are easily postponed. Costs mount while decisions are deferred.

Digester construction is to start this August. Expect nominal, not substantial, work in early months.

To your bill, how important is the digesters project? Suppose it overruns as did Calaveras Dam, the largest job of the water system program. The overrun would be about $1.5 billion. Today’s annual budgets for water and sewer are almost a billion; by project midpoint, say $1.2 billion. For thirty years the overrun would increase the average bill, now about $115/month, by about $4.80 in current dollars, without considering interest on debt. Added to each month’s bill, with interest, perhaps $7-8 per month (escalating from today’s dollars).

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart.

JULY 2019

The Golden Fleece.

It’s not only in Tech that one finds unicorns. The construction industry may be old and boring, but once in a while there are riches galore. Big jobs, and owners with more dollars than sense: bonanza.

Owners get reputations. And then there are owners who advertise their ripeness. “Look at this plum!”

In SFPUC’s (water sewer power) water system work the plum was Calaveras Dam. The contract for the dam, big to begin with, more than doubled in size. With about $300 million in change orders, what a bonanza! Not hard to imagine tens of millions of profits pocketed. That’s the kind of job about which contractors dream, and drool.

So when the much larger sewer program came out with a job 3 to 4 times larger than the Calaveras bonanza—wow! SFPUC the owner again.

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Who controls rate rises? Nobody. There’s no citizens’ organization. Theoretically the SFPUC Commission keeps reigns on costs; but come on: If a pol plays along all is swell. Rock the boat? You don’t make friends.”

Even better, the job was not competitively bid. Taking the low bid is the traditional way of putting some limit on the greed and price of your contractor. He or she must be low bidder to win the job. But managers dislike testy bid competition. So the contract for the mammoth biosolids digesters avoided dollar competition, in favor of which contractor is supposedly overall “best.” Shmoozing quietly invited.

And once a contractor has shmoozed to success, securing the billion dollar biosolids digester baby, the name of the game is maximizing. First thing: elongate the work, stretch it out, extending the opportunities to milk to the max the cash cow. And sure enough, right out of the box, in its first year the digesters job has been delayed one year; two according to some.

And what a fat cash cow this mammoth digester job is! Opportunities like this come once in a lifetime. Mixing metaphors, it’s truly a Golden Fleece. Whoever controls is king-maker. Plenty of largess there is to spread around town, and barrel-fulls of benjamins to bag as profits.

Who is the fleece-ee? Need you ask? It’s the sheeple, of course. We’ll pay and pay in our rates—for decades.

Water and sewer rates have been rising at about seven and two-thirds percent per year over the last decade, doubling. Rates are supposed to continue at about the same pace, at least triple inflation. But it’s not hard to see the writing on the wall. Not only the digesters fleece, but also the loss of water from the Sierras must be paid for. Those extras are likely to be big—and are yet to be figured in.

Most homeowners have reduced water usage during the past decade. Usage is down to 41.5 gallons per person per day. Reduction in use offsets rising rates. But that won’t continue apace.

Who controls rate rises? Nobody. There’s no citizens’ organization. Theoretically the SFPUC Commission keeps reigns on costs; but come on: If a pol plays along all is swell. Rock the boat? You don’t make friends.

SFPUC is an enterprise generating well over a billion dollars a year, growing fast. Opportunities abound. For contractors, employees, Commissioners, and of course for the professionals who land contracts worth tens of millions. But biggest of these opportunities is the fat contract for the biosolids digesters. Watch it swell.

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Public Power. Another step towards full public power has been taken by SFPUC, which issued a report favorable to acquiring PG&E’s city distribution assets. Cost: “a few billion dollars,” plus loss of about $40 million per year PG&E now sends SF in payroll and other taxes. But benefits are said to outweigh costs. The report accuses PG&E of delaying and disrupting SF efforts to reach its goal of being 100% greenhouse gas-free by 2030. Dual provision of power doesn’t work well. A poll shows that 70% of San Franciscans support full take-over. Rates will be lower, and more transparent, according to the report. Revenue bonds can fund the take-over.

At present SF, through CleanPowerSF, supplies almost 80% of SF’s electricity needs. But this is the generation of the power only for the vast majority of accounts. Distributing power (power lines) is far more difficult than buying and selling power. Under the preferred plan, SF would buy PG&E’s distribution facilities to become the sole public power provider for the city.

The report does not specify how many new employees would be required to distribute power, but certainly SFPUC would expand lots. Billing would also shift from PG&E to SFPUC.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart.

JUNE 2019

New Blood, Same Old Feud

Steve Lawrence
Steve Lawrence

Two new Commissioners join the SFPUC (water-sewer-power) governing Commission: Sophie Maxwell and Tim Paulson. There are five commissioners, so two may have quite an impact. Paulson is the labor guy, serving as Secretary/Treasurer of the San Francisco Building and Construction Trade Council, which represents 140 unions. Before that he was with the Labor Council. Sophie Maxwell served ten years on the Board of Supervisors representing District 10. She lives in Bayview. These appointments may not be good news for ratepayers. Labor typically is keen to maximize local jobs and salaries. Bayview, where the major sewer treatment plant is located and where much of the $7 billion sewer program will be spent, typically extracts max for that community. A new community center is being built, and more.

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…settlement negotiations … would double river flows and deprive SF of considerable mountain water … The state has been reluctant to accept steps to boost fisheries other than more flow. SF will surely lose water. The question is how much.”

Word is that settlement negotiations with the state continue and progress well regarding the Bay-Delta Plan (aka WaterFix), which would double river flows and deprive SF of considerable mountain water. SF seeks to invigorate fisheries by means less onerous. The state has been reluctant to accept steps to boost fisheries other than more flow. SF will surely lose water. The question is how much. Finding replacement water is very hard, and costly.

The sewer program (SSIP Sewer System Improvement Program) has spent about one-tenth of its budget of about $7 billion. Right out of the starting gate the largest project, Biosolids Digesters, has fallen one year behind. No budget adjustment is yet made. The reason given is underground water and utilities. Really? Those were not expected? When you dig sixty feet into city ground, what is expected?

SFPUC is a billion dollar plus City business that is growing rapidly. Financed by ratepayers, and exempt from the usual requirement to get voter approval before incurring debt, City pols increasingly find SFPUC a convenient vehicle. It has expanded its reach formally, taking over the firefighting water system and Lake Merced, as examples, and touches ever more of City life. Bioswales, greenways, community center, gardens, landscaping—no need for highly competed general fund bucks; ratepayers rarely notice or squawk.

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At last the Planning Commission takes aim at the Westside and its single family zoning. Too few new housing units are built on this side of town, miniscule in number compared to the Eastside. Most commissioners seemed copacetic with overturning single-family zoning protection.

It’s the shot heard ‘round the Westside, is it not? If Scott Weiner’s SB50 fails to fly in Sacramento, look for San Francisco’s pro-housing crew to zoom in on zoning.

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Internships for High Schoolers. SFPUC is growing about three times as fast as the economy at large. Doing an internship with SFPUC may give a high school student a leg up. The intern shows interest in practical, local matters while also learning and gaining experience about horticulture, environmental, and social justice issues. College resumes might do worse. Post-college the intern might find a job opportunity. Consider recommending to your high school student becoming a SFPUC intern this summer. Go tosfwater.organd type internship in the search box.

Steve Lawrence is a Westside resident and SF Public Utility Commission stalwart.

MAY 2019

Ratepayers and Homeowners Future

Steve Lawrence
Steve Lawrence

Vince Courtney has resigned as commissioner on SFPUC (SF Public Utilities Commission: water, sewer, power). A new labor commissioner (“at-large,” officially) will be appointed by the mayor, confirmed by the BOS.

Environmentalists have proposed electing commissioners. They would have an excellent chance at putting up a slate of candidates, and winning.

As things stand, a balance exists. Environmentalists are heard most frequently at commission meetings, and one commissioner is firmly in their camp. But other commissioners are more cognizant of rates and local communities.

SFPUC should do a good job of providing water and sewer service, and lately electricity too, but should do so efficiently and affordably. The standard has been to keep the rate burden (for water and sewer) from rising above 2.5% of median income. It is expected to hit that level in about twenty years. If commitments and programs become too extravagant, that level will be reached sooner, and passed. Lower and middle income San Franciscans will suffer.

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The system opened in the early 1930s, and has been a godsend. But all good things come to an end, or at least come to be challenged. Now that the state wants twice the water for fisheries, SF is challenged. Eighty-five percent of our water, very pure water, has come from Yosemite. In the future?”

For 90 years San Francisco has enjoyed low water rates. The 1913 Raker Act allowed SF to build a water system in Yosemite for next to free. The system opened in the early 1930s, and has been a godsend. But all good things come to an end, or at least come to be challenged. Now that the state wants twice the water for fisheries, SF is challenged. Eighty-five percent of our water, very pure water, has come from Yosemite. In the future?

For certain more of our water will come from groundwater. Probably we’ll have to desalinate, and also “purify”, which means making wastewater pure enough to drink.

SFPUC is a large agency, running about a billion dollars a year, employing well over a thousand. As it can incur costs and add them to rates, it is tempting to do things through SFPUC. It provides community benefits, summer programs, internships, local hiring, community gardens and greenways, cares for Lake Merced, has taken over the fire-fighting water system, and much more. Commissioners can’t always say no, but they can be stewards of your rate money. Or not.

Ratepayers remain unheard at Commission meetings. None testify. There is no ratepayer organization.

In a city where government is called upon to do much, and more all the time, all it takes is creative rationalization to find a nexus with water, sewer or power. Once found, pressure for SFPUC to do “off-budget” good is easily applied. Which is why the list of what SFPUC provides to “the community” has grown so over the past couple of decades.

Last month this column reviewed challenges SFPUC faces in 2019 and beyond. All these challenges pressure rates. When will rates, and limiting their rise, which has been fast -- three times inflation at least -- become a civic focus?

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Grants to Deal with Stormwater. SFPUC (water, sewer, power) has a new grant program to reduce stormwater going to sewers from large, paved surfaces. Grants of up to $2 million are available to qualifying property owners. Half-acre and up parking lots may qualify.

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Affordable housing. Everyone favors buzz-word affordable housing. But, really? City Hall sits on hundreds of millions of unspent dollars while arguing over who, where, what, and how to spend. Neighborhoods challenge each proposal and seek to extract benefits, each activist vying to be boldest and baddest. Supes pump up affordable housing percentages private developers must pay for the “privilege” of providing a necessity of life, shelter. The cost of a housing unit keeps climbing, and most is unnecessary soft cost, not hard construction cost. Based on what is done, rather than said, an outside observer might question SF’s commitment to affordable housing.

Suppose zoning were sensible, and owners could build so long as it complied. Suppose we had a building inspection department that served pronto. The claim is that only $10 million dollar homes would be built. But that is not what has happened in the past (see for example the book Supreme City, Donald L. Miller, about New York in the Twenties); perhaps it is a baseless fear today. Why not pilot a neighborhood? Or, we can keep doing what works so well - not.

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

March 2019

Focusing on the Big Picture

Happy New Year! For SFPUC (water-sewer-power) it will be achallenging 2019.

Water: A whole lot of water has been taken from our water supply, throwing a monkey wrench into SFPUC’s careful planning. To survive the inevitable dry spells, water from wet years must be stored. Our water system was designed to weather a long dry spell, using what is called a “design drought.” The entire system of facilities was sized accordingly. The process took years.

But the state has implemented its Bay-Delta Plan over the strenuous objections of SFPUC and the irrigation districts that share water rights with SFPUC. SFPUC’s rights are junior, which means that it drinks at the fountain only when the irrigation districts have had their quota. If flow is insufficient in any year, tough luck for SFPUC.

The state has decided that twice as much water must go down-river as before. Fish benefit. SFPUC and the irrigation districts have sued to overturn the state’s decision (and to maintain some negotiating leverage). They say there are other ways to benefit fisheries.

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SFPUC’s rights are junior, which means that it drinks at the fountain only when the irrigation districts have had their quota. If flow is insufficient in any year, tough luck for SFPUC.

 

SFPUC calculates that during its design drought, rationing of 40% will be required under the state’s plan. Previously, its design drought was based on a maximum of 20% rationing, and suburban customers claimed that was too high. Serious economic harm would result.

SFPUC is searching for replacement water. But in California that is very hard to find, and is expensive. Desalination and “water purification” are likely to be explored. Water purification is making wastewater fit to drink.

Power: With PG&E going bankrupt, SFPUC’s infant public power agency will be challenged in 2019. There is talk of buying up PG&E’s physical assets. CleanPowerSF lacks experience handling those. This Spring, enrollment is to triple; most of the city (including the Westside) will be automatically enrolled.

Additionally, pressure is being applied to build renewable energy generation. Everyone agrees that local, renewable generation of electricity is desirable. But accomplishing this is difficult and expensive. Now, with PG&E’s competition fading from the picture, the heat is on to do what has been put off. Leaders have promised to begin working up a build-out program beginning in July. The Commission is to receive it in January.

Sewer: On the sewer side, the largest project of the $7 billion SSIP (Sewer System Improvement Program) is set to begin this year. Deep foundations for the new digesters will be dug. This will be an early test of whether the mammoth project can be kept on time and budget. The largest project of the earlier water program more than doubled in cost, overrunning by $300 million and years in time. Will that repeat? The digesters job is considerably larger.

What do all these challenges mean for the ratepayer? No one knows, it all depends on how the challenges are met. But the signs are ominous. Will progressive supervisors and advocates berate CleanPowerSF into fast-track building local renewable generation facilities? Will it be able to handle physical power facilities? Will the digesters job overrun? Will replacement water be found? So much converging all in one new year.

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South Ocean Beach. While storms and high surf have pounded the beach, no emergency action has been required (at time of writing). No sand was brought in last year, but previous years’ sand has helped. Rock (riprap, revetments) remain to protect the cliffs, although eventually these will be removed. Rain runoff has been controlled. The southbound lane of Great Highway was briefly closed, but roadway has not been permanently lost, nor has wastewater infrastructure been seriously threatened. (A small portion of closed roadway has been undermined.)

SFPUC says it is on track to protect wastewater infrastructure with a 3000 foot buried wall. It is advancing geotechnical (soil, earth) investigation, and hopes to have a conceptual wall design in about six months. A permit is needed by the end of 2021; construction is to begin mid-2022, and should take 28 months. The cliffs will likely be somewhat reshaped. Once wall protection is in, rock can be removed from the beach. Until then, large sandbags will be added if “trigger points” are reach, that is, if the ocean closely threatens damage to wastewater infrastructure.

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Fiscal San Francisco. For those who missed it in the mainstream press, San Francisco projects a deficit of $644 million in five years, no recession figured in. In response the mayor directs departments not to add new positions, and to cut budgets two percent. The average annual cost of each employee is $160,700. There are somewhere in the neighborhood of 31,000 employees, costing about $5 billion per year.

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

February 2019

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