San Francisco Explores Break from PG&E
San Francisco lawmakers are intensifying efforts to separate from utility provider PG&E, citing concerns over reliability after a series of recent blackouts. The city is now exploring options to establish its own municipal utility for greater control over its power supply, which could impact local data centers and tech companies.
- This is not the first attempt; San Francisco offered PG&E $2.5 billion for its in-city electrical grid assets in 2019 after the utility filed for bankruptcy, but the offer was rejected. The city has been mandated to have a public power system since the 1913 Raker Act, which allowed the city to build the Hetch Hetchy dam in Yosemite, but efforts have been repeatedly blocked. - State Senator Scott Wiener recently introduced Senate Bill 875 to streamline the process for municipalities to acquire utility assets through eminent domain, aiming to break the current deadlock with PG&E. The valuation process, which by law should take 18 months, has been ongoing since 2021. - Recent major blackouts have intensified the push, with a December 2025 outage cutting power to 130,000 customers and halting services like Waymo's autonomous vehicles. This highlighted the vulnerability of the city's tech infrastructure, including data centers, to failures in the aging power grid. - San Francisco already operates a form of public power through two programs managed by the San Francisco Public Utilities Commission (SFPUC): Hetch Hetchy Power and CleanPowerSF. Together, these programs supply over 75% of the electricity consumed in the city. - CleanPowerSF is a Community Choice Aggregation (CCA) program that provides over 380,000 residential and commercial customers with electricity from cleaner sources. In 2023, its default "Green" service was sourced from 100% renewable energy. - The city argues that a full municipal utility would lower rates, citing that PG&E's rates are among the highest in the nation. The SFPUC claims its existing public power programs saved customers over $170 million in one year compared to what they would have paid PG&E. - PG&E contends that San Francisco's valuation of its assets is too low and that a public takeover would lead to increased costs for customers, as the city would also need to pay to separate and rebuild parts of the integrated grid. - The increasing electricity demand from the AI industry and data center expansion is putting additional strain on the aging U.S. power grid, making infrastructure reliability a critical concern for the tech sector.
