San Francisco, Calif., took a major step on July 9 as it explores public power expansion, with the Planning Commission voting unanimously to certify the final Environmental Impact Report for the city’s proposed acquisition of PG&E’s electric assets that serve San Francisco.
The report analyzes the environmental impacts of the proposed acquisition, including infrastructure modifications and the construction needed to fully transition San Francisco to a public power system.
The report is required by the California Environmental Quality Act, the state’s environmental review law. The analysis was led by the San Francisco Planning Department.
“This is an important milestone,” said Ron Flynn, Deputy General Manager and Chief Operating Officer of the San Francisco Public Utilities Commission. “San Francisco has been a public power provider for more than a century. Today, the SFPUC provides 75% of the electricity used in San Francisco, but we don’t own the local electric grid. Acquiring those assets from PG&E would allow all San Franciscans to benefit from the clean, reliable, and affordable power we provide. There is more work ahead, and there are future decisions to be made, but the final Environmental Impact Report is a key step to expand public power.”
The report evaluates the PG&E Power Asset Acquisition Project. If San Francisco policymakers decide to proceed with a purchase, the SFPUC would need to physically separate the portion of PG&E’s existing electric system that serves San Francisco.
This work -- generally along the San Francisco-San Mateo County border -- would create two systems to be safely, reliably, and independently operated, the SFPUC said.
The SFPUC would provide electricity service to city customers; PG&E would continue to provide electricity service to its customers outside of San Francisco.
Next Steps
With the final EIR now certified, the city can move into the next phase of work, including engagement and evaluation proceedings at the California Public Utilities Commission to establish a value for the electric assets the city seeks to purchase, evaluate a potential transaction, and support a seamless transition to full public power in San Francisco if policymakers decide to proceed with the acquisition.
San Francisco’s effort to expand public power builds on more than 100 years of providing publicly owned electricity through the SFPUC, which operates two clean energy programs, the SFPUC noted.
Hetch Hetchy Power generates and delivers greenhouse gas-free electricity to public facilities like the airport, libraries, and the Muni transit system, as well as to a growing number of residential and commercial customers.
Through CleanPowerSF, the SFPUC’s community choice aggregation program, the SFPUC purchases clean electricity for homes and businesses, while PG&E continues to deliver that power.
Together, the SFPUC’s two not-for-profit public power programs saved customers more than $75 million on electric bills in 2025 alone compared to what they would have paid PG&E. Hetch Hetchy Power customers pay the lowest electricity rates in San Francisco.
“PG&E is a for-profit utility. That means added costs, which are passed on to ratepayers,” said Michael Hyams, Acting Assistant General Manager for Power at the SFPUC. “The SFPUC is a not-for-profit publicly owned utility. San Francisco doesn’t pay shareholder dividends, corporate taxes, or executive bonuses. We also have access to lower-cost financing because of our strong credit rating. All those savings reduce ratepayer costs, which means lower customer bills. On average, public power utilities across the United States offer more affordable rates than investor-owned utilities.”
Fair Market Value
Separately, San Francisco has asked the California Public Utilities Commission, the state utility regulator, to determine the fair market value of PG&E’s electric assets that serve the City.
San Francisco provided updated expert testimony in April that valued those assets at about $3.4 billion based on new information, including additional asset details identified by PG&E and updated cost estimates. "PG&E has so far refused to say what it thinks those assets are worth, but the CPUC has directed it to provide that testimony in October," the SFPUC said.
The money to acquire PG&E’s grid would not come from the City’s budget or taxes. It would come from bonds that would be paid over time through electric rates. San Francisco voters in June 2018 already overwhelmingly passed Proposition A, which amended the City Charter to authorize the SFPUC to issue revenue bonds to build or improve the City’s clean power facilities, with approval by two-thirds of the Board of Supervisors. The measure received 77% of the vote in its favor.
Revenue bonds are the financing mechanism being contemplated for this acquisition. It is money the City would only get if it acquires PG&E’s grid that serves San Francisco, and the money couldn’t be used for any other purpose. Acquiring PG&E’s grid would have no impact on other city funding priorities, like public safety or affordable housing, SFPUC said.
