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In San Francisco, a Clean Energy Fight

SAN FRANCISCO - San Francisco voters will decide a public power ballot measure next month that could make California's fourth-largest city the first in the nation to require that all of its electricity come from renewable energy.

Proposition H - dubbed the San Francisco Clean Energy Act by supporters and the Blank Check by opponents - would give the city's Board of Supervisors the authority to issue billions in revenue bonds to take over Pacific Gas and Electric Co.'s electricity distribution system if the board determines that it's in the public interest after a study by the San Francisco Public Utilities Commission.

"It's a study to determine the best, most affordable way to reach the 100% clean energy goal," said Julian Davis, a community organizer and environmental activist who chairs the pro-public power campaign. "The city government has an amazing potential through its bonding authority to raise capital and create a sustainable, cleaner energy supply."

The charter amendment would also mandate that the city get at least 51% of its electricity from "clean," non-nuclear energy sources by 2017, 75% by 2030, and 100% "or the greatest possible amount" by 2040.

To outsiders, the plan may sound like an unrealistic dream from the Left Coast city that's considering renaming its sewage plant after President Bush on the same ballot. Politicians such as Mayor Gavin Newsom and U.S. Sen. Dianne Feinstein, who are considered conservatives by local standards, say the city cannot afford to buy a utility.

"Proposition H has nothing to do with the environment,"” said Eric Jaye, chief political consultant to the mayor and a consultant to PG&E, which is pouring millions of dollars into a campaign to defeat the measure through television ads and direct mail. "It defines renewable power as non-nuclear power, and it replaces enforceable state of California rules that require investor-owned utilities to use renewable power with completely unenforceable local goals."

San Francisco has been debating public power for almost a century, and local voters have turned down similar measures 11 times before, most recently in 2001 after California's electricity blackouts.

But Proposition H seems to have a constituency in the city, where environmentalists have strong influence over the electorate and the Green Party successfully competes in local elections. The Sierra Club, the San Francisco Democratic Party, the San Francisco Bay Guardian newspaper, the League of Conservation Voters, and eight of 11 city supervisors are campaigning for the measure.

Supporters are down playing the anti-corporate message that's dominated previous campaigns and focusing on worries about global warming, as well as PG&E's failure to meet state clean-energy guidelines that require utilities to get a fifth of the electricity they sell from renewable sources by 2010.

PG&E, California's largest investor-owned utility, "is striving toward 20% renewable at a rate that we think is completely, completely insufficient, considering the economic and environmental woes that cities are facing," said Supervisor Ross Mirkarimi, a member of the Green Party and a sponsor of the amendment.

He said consumers in California cities with municipal utilities, such as Sacramento, Palo Alto, Alameda, and Los Angeles, pay less for electricity than San Franciscans, and most get more of their energy from renewable sources.

"We very much would like to enact a clean energy act that empowers San Francisco city government and the citizenry's ability to chart their own energy future," Mirkarimi said before the Board of Supervisors earlier this year.

Opponents - including PG&E, Newsom, and the local Chamber of Commerce - point out that Los Angeles gets almost half its energy from coal plants. They argue the charter amendment and its study requirements are a thinly veiled cover for a power grab by local politicians. They say it would cost $4 billion that San Francisco can't afford, while giving the supervisors a "blank check" to issue revenue bonds without voter approval.

"The Board of Supervisors is talking about taking over PG&E; the PG&E system is not for sale," Brandon Hernandez, the director of government relations for the utility, said in testimony before the board earlier this year. "What the Board of Supervisors is proposing is a risk that the city cannot financially or operationally afford at this time."

PG&E is listed in campaign finance disclosure documents as the main sponsor of a campaign against Proposition H. Its Web site, StopTheBlankCheck.com, features citizens and politicians warning that the city can't be trusted to issue revenue bonds without voter approval.

"Under Prop. H, politicians and unelected commissioners will have the power to borrow billions to take over utilities and force you to pay the cost," Mayor Newsom says in a typical warning to voters posted on the site. "That is simply too much power to give to any group of elected and appointed officials."

Proposition H supporters counter that Newsom and the Board of Supervisors regularly use the same power to issue billions in bonds and certificates of participation for San Francisco International Airport, the Public Utility Commission's water and sewer utilities, and other city agencies.

"The reality is that revenue bonds cannot be issued unless they are approved by the mayor, the supervisors, and the city controller," Susan Leal, a former general manager for the Public Utilities Commission, said in a recent editorial in the Guardian, an alternative newsweekly that's been campaigning for public power for at least four decades.

Much of the debate focuses on the cost of an eventual takeover of PG&E's distribution network and the city's ability to run the utility at a profit. The $4 billion price tag is a PG&E estimate. Proposition H supporters say the system is worth less than $1 billion, according to state tax records.

San Francisco Controller Ben Rosenfield, who is required to give an unbiased estimate of the costs of the measure for the city ballot, estimated that the cost of a study would be $825,000 to $1.75 million, while the eventual acquisition of PG&E's network or construction of a new system would cost "billions."

The precise costs would depend on what the city does with its newfound power. The cost of electricity could be lower because a public utility would not need to make a profit, but it also could be pressured by stringent environmental standards in the charter amendment.

Rosenfield didn't comment on arguments that the utility could provide a subsidy to the general fund if it makes money. The California constitution requires that local government fees like utility rates be set to recover costs for services, not to turn a profit or to serve as a hidden tax.

Leal, who was forced out as head of the local water utility by Newsom earlier this year, said the municipal bond market will decide if the city can bring in enough revenue to support the takeover.

"If the proposal isn't viable, the bonds won't get sold," she said.

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