Home > 1 > PG&E 7, CITY 4 – July 23, 1997

PG&E 7, CITY 4 – July 23, 1997

San Francisco Bay Guardian

July 23, 1997

By Savannah Blackwell; Daniel Zoll contributor

PG&E 7, CITY 4

Supes pass sellout settlement

Former supervisor Angela Alioto will seek a federal court injunction to prevent the city’s July 21 settlement with Pacific Gas and Electric Co. from going through, she told the Bay Guardian.

“It is unconscionable to allow the city to lose millions and millions of dollars that it is owed on the basis of unjust enrichment,” Alioto said. “The supervisors who voted for this have abandoned their fiduciary responsibilities…. It’s simply not right and we are going to fight it.” Alioto will file the suit on behalf of San Franciscans for Public Power and several taxpayers.

Alioto said her suit is a response to the Monday, July 21, Board of Supervisors vote in which seven supes voted to settle the city’s suit against PG&E for $132, 494. Four supes – Tom Ammiano, Sue Bierman, Jose Median, and Leland Yee – stood firm against the utility.

Under the settlement, PG&E gets the right to deliver power to the Presidio and Treasure Island. The settlement also gives the city space in PG&E’s fiber-optic network, which was illegally laid underground last year. And Hetch Hetchy Water and Power receives 157 new commercial accounts and some new industrial accounts from PG&E. Revenues from those accounts are expected to generate $37 million over the next five years. The money will enable the city to pay for new street lighting made necessary by undergrounding electric lines. (Another bpart of the settlement called for the city and PG&E to cooperate on undergrounding 42 miles of overhead power lines.)

Alioto, who wrote letters to all board members urging them not to cave in to pressure from PG&E or its allies, Mayor Willie Brown and City Attorney Louise Renne, had offered to try the just-settled suit against PG&E pro bono. She and other public-power advocates believe that the case, which was originally filed in May 1995 over PG&E’s illegal use of city property to deliver power to the Presidio and the resulting tens of millions of dollars in franchise-fee and penalty payments the utility likely owed, would have given the city a chance to break the 1939 franchise agreement with PG&E. Under the 58-year-old agreement, which Renne has interpreted as going on “in perpetuity,” the city gets a measly .5 percent of PG&E’s annual gross receipts from the sale of electricity. (This compares with a national average rate of 4 percent.)

The pressure was on the supervisors for the July 21 vote. PG&E lobbyists had worked the halls, as did Brown – who came up with a neat carrot. As Supervisor Susan Leal, who carried the legislation for the City Attorney’s Office, noted, Brown had already put $8 million of the expected revenue from the new Hetch Hetchy accounts into this year’s budget.

“That’s pure unadulterated blackmail. Period,” Alioto told the Bay Guardian.

PG&E prepared diligently for the vote: According to the utility’s April 1 to June 30 lobbying report filed with the city’s Ethics Commission, Tom Evans, PG&E’s chief of San Francisco operations, lobbied Supervisors Leslie Katz and Michael Yaki, as well as Hetch Hetchy Water and Power general manager Larry Klein, Supervisor Mable Tent’s aide Ken Kong, and Supervisor Barbara Kaufman’s aides Erin McGrath and Allison Krumbein. PG&E lobbying firm Solem and Associates worked on Bevan Duffy, P.J. Johnston, and Kandace Bender in the Mayor’s Office, and David Metz in Leal’s.

But apparently Brown was the deal-closer, putting the screws to at least one supervisor. Gavin Newsom had told the Bay Guardian July 15 that after talking with Alioto he was leaning toward voting against the settlement. In the end, he voted for it. City Hall insiders told the Bay Guardian Brown had pressured his most recent appointee.

PG&E City Hall lobbyist Sam Lauter refused to comment for this story.

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