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Monday, August 6, 2012

Public Power: Economic Report Says It'd Cost Millions, Lose City Jobs

Posted By on Mon, Aug 6, 2012 at 1:30 PM

click to enlarge Is this "100 percent renewable energy"? Perhaps it is!
  • Is this "100 percent renewable energy"? Perhaps it is!

On Friday afternoon, the city Controller's office released a report on the economic impact facing the city if it chooses to dabble in providing residents with public power. You couldn't time a release better -- if you were hoping no one would read it.

And that's too bad. Because, per the controller's analysis, the proposed contract with Shell Energy to inaugurate the CleanPowerSF program will cost the city millions more than the status quo, require a 77 percent spike in San Franciscans' electricity costs just to break even, and require city agencies to begin paying higher energy rates -- and, therefore, spend millions less on services -- and will actually cost the city jobs.

Spending far more money, bleeding city agencies, and costing the city jobs would still be ostensibly worthwhile to provide San Franciscans with "100 percent renewable energy," the term used, repeatedly, in the controller's analysis.

Just one thing: "100 percent renewable energy" doesn't mean what most English-speaking human beings think it does.

With great power comes great responsibility...
  • With great power comes great responsibility...

The "green" power that may come San Francisco's way will be composed of a "to-be-determined combination" of "bundled" power; "firmed and shaped renewable resources"; and "transferable renewable energy credits."

This is complicated -- but one thing it doesn't portend is the creation of a sea of windmills or solar farms or other green energy motifs of the sort San Franciscans love. Per the contract with the multinational energy corporation, "No new facilities are required to be constructed in order for Shell Energy to meet its supply obligation under this Agreement." (it's a long contract; see page 37).

That means Shell would obtain its energy from existing sources -- sources that may not be be any greener than the ones PG&E would provide, though San Francisco would now be paying far more for them.

But what, exactly, would we be paying for? "Bundled power" is the closest thing to what most people would consider "renewable energy." It could be derived from wind or solar sources -- but could also hail from burning the methane spewing from landfills, sewage treatment plants, or feedlots.

"Firmed and shaped renewable resources" are, essentially, renewable power sources accentuated with potentially non-renewables in order to meet supply and demand.

Renewable Energy Credits (RECs) work a bit like carbon offsets. If a California utility provider purchases the power generated by, say, a wind farm in West Texas or solar installation in Florida, it wouldn't be practical to ship that energy all the way back here. So, instead, providers buy the power as a credit, which counts toward the amount of renewable energy the state mandates California providers must generate. That means San Franciscans paying a premium for "100 percent renewable energy" could actually still be using coal- or gas-generated electricity in lieu of the renewable stuff that will never get within thousands of miles from here, but Shell is being credited for.

So, in summation, renewable power would include burning methane or wood byproducts as well as regular old coal- and gas-generated power, in a "to-be-determined combination" -- a phrasing that ought to raise eyebrows.

And it's going to cost millions -- more, in fact, than the city appears to be letting on. For some reason, a summary released along with Friday's report claims the average household would be ponying up an additional $9 a month under CleanPowerSF. But within the report that figure is listed as $18 a month -- which is the total obtained when you actually do the math and multiply the rates by the kilowatt hours and whatnot.

San Francisco ratepayers will shell out more for energy of dubiously renewable provenance  -- and those opting out of CleanPowerSF may be taxed to make up the difference. San Francisco city departments will be forced to spend more of their budgets on energy, and the promise of a cavalcade of green jobs stemming from CleanPowerSF was, per the city economist, a green herring. But, for those who've made it their raison d'être to rid the city of PG&E's yoke, at least we're doing that, right? Well, not exactly.

The controller's report notes CleanPowerSF "may only provide electricity generation services. PG&E would continue to provide electricity transmission and distribution services to all San Francisco residents and businesses, and would continue to handle billing."

What's more, it boggles the mind that spurning PG&E for Shell could be interpreted as some sort of ethical or environmental upgrade. It's like leaving Chris Brown for Ike Turner.

But wait! There's more! After the 4.5-year contract with Shell runs its course, the city and its ratepayers could end up kicking down even more money: Those who stick with CleanPowerSF "face a risk that future rates could be significantly different than those associated with the present contract."

Perhaps it's best no one read this report on Friday. It'd have ruined their weekend.

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About The Author

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.


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