City and County of San Francisco Proposal to Take Over PG&E Electric Grid Would Increase San Francisco Electric Rates for Decades

Pacific Gas and Electric Company (PG&E) said again today that its electric grid assets are not for sale.

PG&E also noted that a City and County of San Francisco takeover of PG&E’s electric system in the city would be so expensive that it would raise San Franciscans’ electric rates for decades.

The company’s statement is in response to new testimony from the city as part of an ongoing proceeding before the California Public Utilities Commission. The city has asked the commission to place a value on the PG&E equipment and real estate needed to serve San Francisco.

In its latest filing, the city’s estimate greatly undervalues PG&E’s property, listing a value that is billions of dollars below fair market value. Nor does the city’s estimate include key parts of the valuation that the California Public Utilities Commission has ruled that the city must pay to PG&E.

The commission already has determined that the city’s payment to PG&E of “just compensation” starts with the fair market value of PG&E’s property. It also must include:

• The costs of physically separating from PG&E’s grid and restoring PG&E’s system for remaining PG&E customers 

• The costs of state-mandated programs, such as those that promote reducing statewide wildfire risk, low-income customer programs, energy efficiency, and electrification 

Based on the commission’s case schedule, the city was not required to estimate these amounts in its current filing. However, these are significant additional costs that San Franciscans would have to pay on top of their utility bills.

Other potential costs include building a new substation serving San Mateo County, for which PG&E may also have to buy additional land.

While the city’s strategy would increase rates for customers, PG&E is making progress lowering rates. PG&E has reduced electric rates by 23% for its most vulnerable customers since early 2024, and 13% for other residential customers who receive energy supply and delivery from PG&E. PG&E electric rates have stabilized and are going down, even while the U.S Energy Information Administration expects national electric prices to rise by nearly 10% between 2024 and 2026.

PG&E plans to file its own testimony in the valuation case in October 2026, consistent with the CPUC’s direction.