San Francisco Supervisor Moves to Increase Franchise Fees
(May 29, 1996)

Supervisor Angela Alioto announced a new effort to increase Pacific Gas and Electric's (PG&E's) low franchise fees to the city of San Francisco, from .5% to 2% of gross electric receipts, a move that would bring millions of dollars in new annual revenues to San Francisco. Under Alioto's proposal, the utility's natural gas franchise fee would increase from 1% to 2%.

PG&E pays some of the lowest fees in the country and has refused to increase them, claiming the fees (established by a 1939 franchise agreement) are set in perpetuity. Deputy City Attorney Michael Olsen said that PG&E's franchise contract is not in the public interest; "there is a very good argument on public policy grounds that these indeterminate franchises should not exist."

The proposed changes would bring $21 million per year in franchise fees to the city, compared to $3.9 million it currently collects.

The city is currently pursuing two lawsuits against the utility, one charging PG&E was not given the right to use city streets to deliver power to the Presidio, the other contesting the National Park Service's awarding PG&E the bid to supply power to the Presidio.

San Francisco is already partly involved in self-generation, generating its own electricity for 1300 publicly owned locations (Muni and fire stations) at the city's low cost Hetch Hetchy plant across PG&E's distribution lines, for which PG&E charges the city approximately 27 million in "wheeling fees" per year, seven times the franchise fee it pays the city for its city-wide monopoly.

Many public power advocates, such as Joel Ventresca, are calling for municipalization in San Francisco.

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