San Francisco Offers To Buy PG&E's Electric Grid For $2.5 Billion
RACHEL MARTIN, HOST:
San Francisco is offering to buy PG&E's electrical grid in the city for $2.5 billion. Sonja Hutson of member station KQED has been looking into the consequences.
SONJA HUTSON, BYLINE: The city has been considering making an offer since PG&E filed for reorganization in January, as it faced mounting liability from wildfires started by its equipment. City Attorney Dennis Herrera says San Franciscans would get safer and more affordable power from a city-owned utility.
DENNIS HERRERA: There has been a lack of investment in infrastructure over the course of the last decade by PG&E. And it was motivated, I think, primarily by pursuit of profit. That's not something that San Francisco is going to be pursuing.
HUTSON: Herrera says the offer is competitive, but PG&E doesn't seem very interested. It said in a statement it doesn't think the city's offer is in the best interests of its customers and stakeholders, but it'll remain open to communication. Another potential barrier is pushback from the union representing PG&E workers. The city has offered to hire them, but Tom Dalzell, the union's business manager, says that would hurt pensions.
TOM DALZELL: It is compromised because they did not make it to retirement age. And then they start all over with the city, where you have to work a number of years until you vest in the pension.
HUTSON: The money for the sale would come from bonds approved by voters last June. The bonds would be paid off through customers' electric bills. The city says rates wouldn't increase. But Stanford University energy policy researcher Michael Wara says it could drive rates up for customers outside the city.
MICHAEL WARA: San Francisco has no wildfire risk, honestly, and other areas have a lot of it. And so if you remove the customers that don't create that risk, you're going to maybe raise costs for other customers.
HUTSON: San Francisco says that could be avoided through the regulatory process for approving the sale. The city and PG&E are expected to meet later this month to discuss the offer.
For NPR News, I'm Sonja Hutson in San Francisco. Transcript provided by NPR, Copyright NPR.