What a San Francisco Grid Takeover Could Really Cost Customers

A City and County of San Francisco (CCSF or City) takeover of PG&E’s electric system in San Francisco would require the City to pay PG&E total compensation of more than $20 billion (in 2021 dollars), according to PG&E’s analysis.

That’s more than the City’s current annual budget of nearly $17 billion.

PG&E Corporation CEO Patti Poppe shared the company’s estimate during a Climate One event at the Commonwealth Club in San Francisco on Wednesday (Oct. 14).

CCSF, which has many times attempted to take over PG&E’s system, petitioned the California Public Utilities Commission (CPUC) in 2021 to determine its cost to municipalize.  PG&E will submit its full analysis to the CPUC on Oct. 20.

PG&E’s valuation consists of the fair market value of PG&E’s San Francisco system, including electric assets and PG&E’s real property, as well as severance costs: the cost to sever the City from PG&E’s integrated grid and the amount necessary to protect PG&E’s remaining customers from the cost-shifts that a takeover would cause.

PG&E’s estimate is multiple times that of CCSF’s April $3.4 billion valuation, which does not yet include an analysis of severance costs.

A government takeover would be bad for San Francisco for other reasons, Poppe said.

“My coworkers and I love serving San Francisco. San Francisco’s expectations are high, and we intend to measure up,” she said. “We have 600 people who serve you every day and if San Francisco were to take over those assets, those people would leave. I imagine a day when a whole convoy of blue and white trucks are driving across the Bay Bridge heading to Oakland, never to come back. I don’t think that’s in San Francisco’s best interest.”

What CCSF’s total compensation must include

The value of PG&E’s electric assets is only one part of the total compensation the City would have to pay PG&E.

Under the CPUC’s process, CCSF would also have to pay PG&E for costs to physically separate the interconnected electric grid, restore its remaining system, and ensure that a government takeover would not financially harm PG&E’s remaining customers.

These estimated payments to PG&E, which will be described in PG&E’s October 20 testimony, must include: 

• Electric system assets: The fair market value of infrastructure. 

• Separation costs: Work to divide PG&E’s integrated electric system, as well as restoration and construction of PG&E facilities needed to continue serving customers outside the City, including construction of a new PG&E substation. 

• Business severance damages: Preventing cost shifts to remaining PG&E customers for mandated statewide programs, including wildfire risk reduction, low-income qualified assistance and energy efficiency programs.

PG&E’s analysis finds the City’s April 2026 offer for PG&E’s assets to be well below market value. That includes the City providing no value for 2,000 PG&E real estate interests, such as easements and licenses that would be costly for the City to purchase in a dense urban area.

PG&E’s estimate does not include hundreds of millions of dollars that the City would incur in start-up costs to establish a new city-run electric company.  Nor does it include the revenues that the City would lose from PG&E: The Company’s tax and franchise fee payments, which total approximately $100 million a year, help the City pay for public services including fire and police protection.

Making power more reliable in San Francisco

PG&E is proud to have served San Francisco for more than 120 years and is working every day to improve reliability, increase grid capacity and strengthen system resilience for the future.

The company recorded 23% fewer outage minutes in the first half of this year compared to 2025.

The company has spent $3 billion in San Francisco in the past decade and plans to accelerate spending, investing nearly $2 billion in half that time, over the next five years.

PG&E is planning major investments in large transmission substations, asset health and mitigating large power outage risk. The work includes replacing critical equipment in areas that experience frequent power outages.

Recent work completed this year includes 23 reliability projects and installing new underground cable. Additional work on track this year includes replacing 50 isolation and switching devices, which reroute power during outages.

Longer-term projects are planned in the Richmond and Sunset neighborhoods to convert power lines to higher capacity to improve reliability.

PG&E also remains committed to supporting San Francisco’s clean energy goals.

The company believes that a collaboration with the City can deliver those benefits, improving the lives of San Franciscans and their communities.