95,835 / 46.28% Yes votes ...... 111,255 / 53.72% No votes

See Also: Index of all Measures

The City generates hydroelectric power at its Hetch Hetchy facility in Yosemite National Park. The City uses this power to meet its municipal power needs and those of other public entities such as the Unified School District. The City sells its excess power to the Modesto and Turlock irrigation districts. The City does not sell power to San Francisco residents and businesses. The City's Public Utilities Commission oversees the City's water and power utilities. This Commission has five members appointed by the Mayor. By a two-thirds vote, the Board of Supervisors can reject any of these appointments. In general, the Public Utilities Commission must get voter approval to issue revenue bonds. Power for San Francisco residents and businesses is provided by a private company. The State sets the rates charged for that power. Some of that power comes from a power plant in the City's Hunter's Point neighborhood.

The Proposal:

Proposition D is a Charter amendment that would change the authority, duties and composition of the Public Utilities Commission in order to make it the primary provider of power to San Francisco residents and businesses. The Commission would be tasked with developing sufficient and reasonably priced power for the City. One goal of this would be to allow the Hunter's Point power plant to be closed.
The Public Utilities Commission could:

• Buy and operate power plants and distribution facilities, and sell power;
• Enter into long-term contracts to buy power; and
• Issue revenue bonds to improve, buy or build energy facilities without voter approval. The bonds would have to be approved by the Board of Supervisors and meet certain other requirements.

Proposition D would increase the Public Utilities Commission to seven members. Three would be nominated by the Mayor and one by the Controller, all subject to Board of Supervisors approval. The Board would appoint the three remaining members.

The proposal's most significant costs would occur if the PUC develops or acquires energy generation, transmission, or distribution facilities. Until development or acquisition plans are known, costs or revenues which would be generated cannot be estimated, however the range would be in the hundreds of millions of dollars, depending on the mix of facilities proposed. Under the amendment, the PUC may issue revenue bonds to develop or acquire energy facilities when authorized by a majority vote of the Board of Supervisors. However, before the PUC could acquire transmission and distribution facilities owned by the local distribution utility, a cost-benefit analysis must be completed and the Controller must certify that the rates set by the PUC for this purpose would not exceed the local distribution utility's rates covering debt service and profits.

The PUC's acquisition of facilities which are now privately owned could reduce revenues to the City by the loss of property, business and franchise taxes ranging, in total, between $8 million and $15 million annually, depending on whether the publicly-owned entity would pay certain taxes and fees. Specific costs or savings cannot be determined at this time for other objectives and options under the amendment such as closing the Hunters Point power plant, generating 25% of San Francisco's power from non-hydro renewable sources by 2010, entering into long term contracts and joint powers agreements, and providing a severance package for employees laid off if the City acquires local energy facilities.

Meaning of Voting Yes/No

A YES vote of this measure means:

If you vote "Yes," you want to change the authority, duties and composition of the Public Utilities Commission in order to make it the primary provider of power to San Francisco.

A NO vote of this measure means:

If you vote "No," you do not want to make these changes.

How to Evaluate the Propositions

Decide for yourself

Yes on D

No on D

KQED-FM San Francisco Public Radio

• Discussion with guests for and against this measure - 1 hour Forum broadcast on 10/29/02 (opens in new window)

• Televised Ballot Measure Discussions: - Check the SFGTV Cable Channel 26 Schedule for rebroadcasts.

• PG&E spends big to defeat Prop. D - 10/29/02
• City spurned mandate for public power S.F. stuck with high energy rates, risk of blackouts - 9/16/02

• Backers plug public power - 10/01/02

PROPOSITION D

Describing and setting forth a proposal to the qualified voters of the City and County of San Francisco to amend the Charter of the City and County of San Francisco by amending Section 4.112 and adding a new Chapter 8B addressing Commission governance, goals and objectives related to energy, powers of the Commission related to energy, siting of energy facilities and rates for energy services. The Board of Supervisors hereby submits to the qualified voters of the City and County of San Francisco at an election to be held on November 5, 2002, a proposal to amend the Charter of said City and County by amending Section 4.112 and adding a new Chapter 8B, to read as follows:

Note: Additions are single-underline italics Times New Roman. Deletions are strikethrough italics Times New Roman.

SECTION 4.112. PUBLIC UTILITIES COMMISSION.

The Public Utilities Commission shall consists of five members appointed by the Mayor, pursuant to Section 3.100, for four year terms. Members may be removed by the Mayor only pursuant to Section 15.105.

8B.100. GOVERNANCE OF THE PUBLIC UTILITIES COMMISSION.

(a) The Commission shall be governed by seven commissioners; three commissioners shall be appointed by the Mayor; three commissioners shall be appointed by the Board of Supervisors; one commissioner shall be appointed by the Controller. The commissioners appointed by the Mayor and the Controller shall be confirmed by the Board of Supervisors by majority vote. Vacancies among the commissioners appointed by the Board of Supervisors shall be filled by appointment of the Board of Supervisors; those appointed by the Mayor shall be filled by appointment of the Mayor subject to confirmation by the Board of Supervisors; those appointed by the Controller shall be filled by appointment of the Controller, subject to confirmation by the Board of Supervisors. Persons appointed to fill vacancies shall serve until the expiration of the term of the commissioner that vacated the office.
(b) Of the commissioners appointed by the Board of Supervisors, one shall have significant knowledge of and experience with environmental justice advocacy. Of the commissioners appointed by the Mayor, one shall be a representative of a non-profit consumer advocacy organization. The commissioner appointed by the Controller shall have a background in utility management or municipal finance. The commissioners shall elect a chair annually. The chair shall serve at the pleasure of the commissioners.
(c) Commissioners shall have a term of office of four years, except that the initial terms shall be staggered with four commissioners serving two years and three commissioners serving four years. The initial appointee of the Board of Supervisors with a background in environmental justice advocacy shall serve four years. The other two initial appointees of the Board of Supervisors shall each serve two years. The initial appointee of the Mayor representing a non-profit consumer advocacy group shall serve four years. The other two initial appointees of the Mayor shall each serve two years. Commissioners appointed by the Mayor may only be suspended and removed from office by the Mayor as provided in Section 15.105. Commissioners appointed by the Board of Supervisors or the Controller, respectively, may only be suspended and removed from office by the Board of Supervisors or the Controller, as provided in Section 15.105, except that the Board of Supervisors or the Controller shall act in place of the Mayor.
(d) Commissioners shall receive reasonable compensation for attending meetings of the Commission, which shall not exceed the average of the two highest compensations paid to the members of any board or commission with similar authority and responsibility in the nine Bay Area counties.
(e) The provisions of Charter Section 4.102, (4), (5) and (6) shall not apply.
(f) Commissioners who are in office when this measure takes effect shall continue to serve until four or more new commissioners have been appointed under this section. At 12 o'clock noon on the date that four or more commissioners have been appointed under this section, the terms of office of the members of the Commission who are in office when this measure takes effect shall expire, and the terms of office of the new commissioners shall begin. The Mayor, the Controller and the Board of Supervisors shall make their initial appointments by January 8, 2003.

8B.101. GOALS AND OBJECTIVES RELATED TO ENERGY.

(a) The Commission shall develop, periodically update and implement programs to achieve goals and objectives consistent with the following:

8B.102. POWERS OF THE COMMISSION RELATED TO ENERGY. The Commission shall have all powers granted to Boards and Commissions by the Charter, and in addition, shall have the following powers in carrying out its responsibilities related to energy: (a) Notwithstanding the requirements of Section 9.118 or any other section of this Charter, enter into long term contracts for energy and related services subject to requirements for approval by the Board of Supervisors which shall be specified by the Board of Supervisors by ordinance. (b) Enter into joint powers agreements with other public entities in furtherance of the responsibilities of the Commission without approval of the Board of Supervisors. (c) Serve as the default provider of energy to San Francisco residents and businesses, consistent with state law. (d) Notwithstanding the requirements of Section 9.107 of this Charter, issue revenue bonds, loans and/or any other forms of indebtedness to be repaid from revenues of the Commission in accordance with State law and any outstanding bond covenants, with approval of the Board of Supervisors, subject to the Controller certifying in writing that sufficient unencumbered Commission revenues will be available to timely meet all of its obligations arising from such issuance or obligation. Notwithstanding any other provision of this Charter or of any ordinance of the City and County, the Board of Supervisors may take any and all actions necessary to authorize, issue and repay such bonds, indebtedness or loans, including but not limited to modifying schedules of rates and charges to provide for the payment and retirement of such bonds. Except as expressly provided in this Charter, all revenue bonds may be issued and sold in accordance with state law or any procedure provided for by ordinance of the Board of Supervisors (e) Revenue bonds issued pursuant to this measure may be used for the following purposes: (1) Development and construction of new energy facilities and energy efficiency projects; (2) Repair and replacement of city-owned energy facilities; (3) Acquisition of generation facilities; (4) Acquisition of transmission and distribution facilities owned by the local distribution utility, after completing a credible cost-benefit analysis. Any determination by the Commission that it will acquire the transmission and distribution facilities is subject to the approval of the Board of Supervisors by a motion approved by six votes. Revenue bonds may only be issued pursuant to this section for acquisition of transmission and distribution facilities owned by the local utility to the extent that the Controller certifies that the rate component covering projected annual debt service would not exceed the local distribution utility's rate component covering debt service and profits, during a recent relevant time period.

(f) Enter into project labor agreements with appropriate building, construction and trades councils for significant capital projects where appropriate.
(g) Undertake all actions necessary or convenient to the full exercise of the powers granted to the Commission by this Charter or other law.

8B.103 SITING OF ENERGY FACILITIES.

(a) In decisions related to siting new energy facilities, the Commission must consider and make findings on each of the following:

(ii) Public health and environmental impacts of the project.
(iii) Project need and alternatives.
(b) For new generation projects, the Commission shall not site or support facilities in Southeast San Francisco unless an independent air quality expert selected by the Commission documents that the project will result in a significant net decrease in criteria pollutants in Southeast San Francisco, consistent with the standards set forth in Ordinance 124-01 or any other ordinance. In other locations, the Commission shall not site or support facilities unless an independent air quality expert selected by the Commission documents that the project will result in no net increase in criteria pollutants. The Commission shall not site or support nuclear generating facilities.
(c) In siting clean technologies, the Commission shall give preferences to locations in Southeast San Francisco to maximize public health, environmental, and economic benefits for local residents.

8B.104. RATES FOR ENERGY SERVICES. Notwithstanding Charter sections 2.109, 3.100 and 4.102 or any ordinance including Administrative Code Appendix 39, the Commission shall set rates, fees and other charges in connection with providing the utility services under its direction, subject to approval or rejection within 30 days of submission by resolution of the Board of Supervisors. In setting rates, fees and charges the Commission shall: (a) Establish just and reasonable cost-based rates that encourage the efficient use of energy for its residential, commercial, and municipal customers. The Commission may establish rate surcharges to fund implementation of energy efficiency and/or renewable energy generation projects. The Commission shall provide rate discount programs generally consistent with the programs mandated by state and federal law for utility services. (b) Establish rates, fees and charges at levels sufficient to maintain a positive financial condition and bond ratings of each enterprise under its jurisdiction, meet requirements and covenants under all loan agreements, bond resolutions and indentures, and provide sufficient resources for the continued financial health of each utility, including sufficient revenues to fund appropriate reserves, operation, maintenance and repair of each enterprise consistent with good utility practice; (c) Retain an independent rate consultant to conduct rate and cost of service studies for each utility at least every five years; (d) Annually adopt a rolling 5-year forecast of rates, fees and other charges; (e) Establish a Rate Fairness Board consisting of seven members: the City Administrator; the Controller; the Director of the Mayor's Office of Public Finance; two City residential retail customers: one appointed by the Mayor and one by the Board of Supervisors; two city retail business customers: a large business customer appointed by the Mayor and a small business customer appointed by the Board of Supervisors. The Rate Fairness Board will: (i) Annually review the five-year rate forecast; (ii) Participate in one or more public hearings with respect to rate recommendations prior to the Commission adoption of rates; (iii) Provide a report and recommendations to the Commission with respect to the rate recommendations. (f) The Rate Fairness Board may, in connection with periodic rate studies, submit to the Commission rate policy recommendations for the Commission's consideration, including recommendations to reallocate costs among various retail utility customer classes.

(g) The Commission may transfer revenue to the City's general fund only after meeting both of the following conditions: (i) The Commission is serving San Francisco retail customers and the Controller certifies that the Commission's rates, including any surcharges, are below the rates that would be charged by the local utility distribution company, and (ii) Revenues are adequate to meet the financial requirements of subsection (b), above.

8B.105 DISPLACEMENT OF UTILITY WORKERS. The City shall negotiate with non-City employees laid off as a result of the City's acquisition of any electric generating facility or electric distribution and/or transmission system as a result of the City providing electric service to residential and commercial customers located in San Francisco regarding an appropriate severance allowance.

If any part or provision of the amendments to the Charter provided herein, or their application to any person or circumstance is held invalid, the remainder of the amendments, including their application to other persons or circumstances, shall not be affected by such a holding and shall continue in force and effect. To this end, these amendments are severable.

APPROVED AS TO FORM: DENNIS J. HERRERA, City Attorney

By:

Deputy City Attorney