San Francisco Ballot Measures Target Energy Crisis

Power: San Francisco voters will decide on creating a public utility and funding the world's largest solar energy complex.

Source: MARIA L. La GANGA in LA TIMES

http://www.latimes.com/news/local/la-000078597oct01.story

October 1 2001

SAN FRANCISCO -- Faced with the yearlong energy crisis, this city has responded like no other in California, with four propositions on the November ballot
designed to shed light on the difficult situation.

Two measures, if passed, would create a public utility, snatching away more than 365,000 customers from the struggling hometown power company, Pacific Gas &
Electric.

Two would fund a variety of renewable energy projects, and could bring the city closer to its goal of building the biggest solar energy complex in the world. PG&E
views the first two initiatives as a threat to its livelihood. The company already has spent hundreds of thousands of dollars combating the proposed public power
district, largely through its advocacy group, the Coalition for Affordable Public Services.

"We are facing a hostile takeover of the system," said PG&E spokeswoman Jennifer Ramp, describing the potential effects of Measure I and Proposition F.

"As with any major corporation, if there is a threat such as this--a hostile takeover of the company's way of business--these kinds of costs or efforts are justified."

With shock over the World Trade Center disaster beginning to recede and the election looming Nov. 6, thousands of volunteers have started to mobilize.

Public power advocates have begun leafleting and putting up campaign signs.

Their opponents say they will begin a "visible campaign" this week.

Campaign Has Lasted Years

Ross Mirkarimi, campaign director for the organization promoting three of the four propositions, views their chances of passage as high.

In private polling, all of the measures have good support, he said, but the fight will be intense.

"They've been working for public power in San Francisco for 80 years," Mirkarimi said, ever since the federal government decided to build the Hetch Hetchy dam
and mandated that the city form a power agency. "The main battle will be this November. It really could be a pay-per-view event."

And one with an audience that stretches much farther than San Francisco's 47 square miles.

"We believe that there is a lot of interest from cities and towns looking at the option of public power as well as other means of taking control of . . . electrical
systems," said Madalyn Cafruny, spokeswoman for the American Public Power Assn. "A lot of people will be watching what happens in San Francisco."

Cafruny and others in the energy debate say they know of no other city in California with such a combination of ballot measures addressing the power crisis. And no
local jurisdiction has created a municipal utility district in California since state law changed in 1992, making the process more difficult.

About 20 Southern California jurisdictions interested in creating their own power districts banded together this year with the help of state Sen. Nell Soto
(D-Pomona) to push for a change in state law that would improve their chances.

But the legislation didn't pass, said Edward Smeloff, assistant general manager for power policy of the San Francisco Public Utilities Commission.

"San Francisco is unique right now, probably nationally, because of the combination of all four of these on the ballot," said Michael Bornstein, director of the Sierra
Club's San Francisco Bay chapter.

Measure I would create a municipal utility district, which would be run by a five-member elected board. The nonprofit agency would have the authority to deliver
power to an estimated 365,000 customers in San Francisco and 2,000 in Brisbane, just south.

The district could sell revenue bonds to buy PG&E's power delivery system.

A study commissioned by San Francisco in 1997 pegged the cost of buying the delivery system at from $250 million to $800 million. PG&E estimates that the cost
would be closer to $1 billion.

Proposition F would change the City Charter and disband the existing San Francisco PUC, which delivers water and sewer services to the city and electricity to city
departments such as the airport.

In its place, Proposition F would create a municipal water and power agency run by a seven-member elected board. The agency would take over the city's current
water, sewer and electric power utilities and could replace PG&E with a city-run, citywide power system.

Either proposition would be a step toward public power in San Francisco. If both were passed, the two boards would convene publicly to figure out which is more
capable of being the city's public power agency.

'Infighting' Is Feared

If the boards reached an impasse, the municipal utility district would have two years to switch the city to public power. If that process failed, then the water and
power agency would take over.

Proponents of the measures look at them and see a backup system: F would be in place if I didn't work. Critics look at them and see a mess.

If both are passed, there will be "political infighting over something that people have to rely on as a basic necessity," said Jon Kaufman, campaign manager for the
Coalition for Affordable Public Services.

A municipal utility district "just won't work," he added. Such districts were a good idea 100 years ago when the Los Angeles Department of Water and Power was
set up, and 50 years ago when the Sacramento Municipal Utility District was created, he said.

At that time, the federal government was building dams, generating huge amounts of power and selling it at discounted rates to municipal districts through long-term
commitments, he said.

"Today, the opposite is true," Kaufman said. "Today, a municipal utility district of any kind is in the same economic environment that an investor-owned utility is. It
has to buy power at market prices. The advantage that used to exist is not the case."

Mirkarimi and other backers of municipal systems argue that public power is cheaper than that offered by a private utility such as PG&E because such districts don't
pay dividends to investors, are exempt from taxes and can borrow for capital improvements far more cheaply.

A chance to have cheaper power by whatever means resonates strongly in a region where the energy crisis has caused electricity rates to jump.

Earlier this week, volunteers from the environmental and organized labor movements canvassed San Francisco's Mission District, passing out leaflets and urging
merchants to put colorful campaign signs in store windows in support of the ballot measures.

Suresh Parmar, owner of the Bombay Bazar, was more than happy to have a poster placed in his incense-tinged store. Since the energy crisis began, he said, his
power bills are "more than double. Too much, it increases."

Kaufman will not detail PG&E's plans to fight the measures, but he said the efforts "will become self-evident" this week.

Paul Fenn, director of the Oakland-based advocacy group Local Power, said he believes PG&E will do whatever it can to prevent or delay a municipal utility district
in San Francisco, where the company is headquartered.

"For PG&E, it's a major threat to their corporate identity," Fenn said.

"It's a symbolic threat throughout [PG&E's] territory. They're in bankruptcy and restructuring, and this gets in the way."

Solar, Other Renewable Energy

The company has no position on the two other power measures on the ballot. PG&E spokeswoman Ramp, however, notes that solar energy currently comprises
"less than 1% of total customer accounts" in the firm's territory, which stretches from Bakersfield to the Oregon border.

Proposition B would allow for $100 million in revenue bonds for energy efficiency, including solar and other renewable energy systems.

Though the measure does not detail how the money would be spent, the city envisions a system with 10 megawatts of solar power and 30 megawatts of wind
power. The renewable energy would be for city government use only.

Proposition H would change the city's charter and allow the Board of Supervisors to issue revenue bonds for renewable energy sources without the need for a
citywide vote.

Currently the supervisors can issue such bonds for certain uses--low-income housing is one--but not for new energy systems.

The measure would allow the city to fund a grand scheme unveiled in the spring, which would create a solar energy system on public and private buildings that would
eventually generate 50 megawatts of power.

That plan calls for 140 acres of photovoltaic panels, which would power 50,000 apartments or 50 commercial buildings, each on the scale of a Wal-Mart store.

The entire production of the U.S. photovoltaic industry is only 80 megawatts, said Bentham Paulos, program officer for the Energy Foundation, which promotes
clean energy. That is the amount of energy available at its peak at any time.

Paulos gets a bigger charge out of San Francisco's two renewable energy propositions than he does from measures I and F. Sure, the municipalization measures are
"a big deal," he said.

"But they're not as unique as the other two. The other two are clean energy initiatives," Paulos said.

"I don't think any other city has ever done that. What we're seeing is that cities are emerging as a new venue for promoting clean energy."