PG&E Puts San Francisco Grid Takeover Compensation at $22.5 Billion

PG&E’s compensation estimate for a possible San Francisco takeover of its electric grid totals $22.5 billion. The proposal includes asset values and damages, while the city’s separate $3.4 billion valuation covers the land, property and rights it seeks.

In testimony filed Tuesday, Oct. 20, with the California Public Utilities Commission (CPUC), PG&E assigned $13.9 billion to electric and real-property assets, $7.6 billion to business-severance damages and $1 billion to physically separating San Francisco’s system from its wider network. The damages together account for $8.6 billion of the total.

PG&E’s filing describes the severance costs as a way to keep expenses for statewide programs, including wildfire risk reduction and energy efficiency, from shifting to its remaining customers. The company calculated that dividing its proposed total across San Francisco’s 420,000 electric accounts would equal about $53,000 per account. It cautioned that the calculation is not a forecast of a specific customer’s bill or charge.

San Francisco’s April testimony valued the land, property and rights it seeks at $3.4 billion, using a valuation date of July 27, 2021. An investment-banking valuation cited in the city’s filing put those assets in a range of $3.1 billion to $3.6 billion.

The city proposed allocating most or all business-severance damages to ratepayers and recovering actual physical-separation costs through a memorandum account. Its filing valued real property and land-related rights at about $600 million, including 33 PG&E properties and thousands of easements, licenses and similar interests. The city’s asset figure and PG&E’s total cover different cost categories because PG&E’s estimate also includes its proposed severance and separation costs.

San Francisco began the valuation proceeding in 2021, seeking assets it says it needs to provide electric service throughout the city. The matter remains before the CPUC, and the commission has not set a final compensation amount.

PG&E CEO Patti Poppe said, “A government takeover of our grid is not the right solution for our San Francisco customers.”