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Board approves $58 million appropriation for Public Utilities advanced meter project after questioning
Summary
The San Francisco Board of Supervisors approved on first reading an ordinance to appropriate roughly $58 million for the Public Utilities Commission's advanced meter infrastructure (AMI) project after supervisors pressed PUC staff about why a large upfront appropriation was needed when meter costs are collected through rates.
The San Francisco Board of Supervisors on Tuesday approved on first reading an ordinance appropriating approximately $58,000,000 of capital lease revenue to fund an advanced meter infrastructure project at the Public Utilities Commission.
Supervisors pressed PUC staff about how the city is already collecting meter-related charges through water rates and whether ratepayers are being charged twice for meter replacements. Heather Pohl, identified at the hearing as the PUC project manager for the project, introduced the item: "I'm Heather Pohl, the project manager for the PUC for the project." Laura Spangen, speaking later for the PUC, told the board the appropriation covers replacement of about 170,000 meters and related system costs: "The supplemental that you're approving today is about $20,000,000 of it is for actual new meters... $15,000,000 of it is for the AMI system itself that can read all of the meters... and the remainder of the costs are for actual installation."
A supervisor who asked detailed questions about how meter costs are recovered pressed officials on whether the PUC already accounts for meter replacement costs in rates and how frequently meters are replaced. PUC staff said meters are typically replaced every 15 to 20 years and that the utility has replaced only about 4,000 meters per year in recent years because the commission had been delaying broader installation pending board approval. The PUC described the ordinance as a way to fund a citywide program to replace all meters over a short period, rather than spreading replacements over decades: "So instead of doing replacement over 15 to 20 years like we normally have, we're replacing them all at once now." (PUC representative)
Controller Ben Rosenfield also addressed revenue estimates, saying the department had not provided a detailed model to the controller but that PUC staff had represented that the program could generate about $1,000,000 in its first year and up to approximately $3,000,000 at maximum yield if every rental unit were charged and remitted the fee. Rosenfield said: "At maximum yield, meaning if all rental units in the city were being charged this fee and remitting it, it would generate approximately $3,000,000 but... the department is estimating a million dollars during the first year." (Ben Rosenfield, Controller)
Supervisors sought clarity on cost components of typical water bills and the extent to which charges billed to customers cover metering, billing, operations and customer service. PUC representatives said ongoing operations and billing costs are continuing charges that customers pay annually even if the physical meter itself is amortized more quickly.
The board took a roll call vote on the ordinance. The clerk announced 10 ayes and 1 no; the ordinance passed on first reading.
The ordinance directs the PUC to proceed with installation and authorizes appropriation of capital lease revenues to pay for meters, AMI system equipment, and installation labor. PUC staff told the board the one-time appropriation also aims to create local installation jobs by replacing meters over a two-year schedule rather than the prior 15-to-20-year replacement cycle.
PUC staff said further accounting and rate impacts will be reflected in PUC budget and rate proceedings, and supervisors asked staff to provide additional breakdowns of unit cost components (meter hardware vs. operations, billing and customer service) in follow-up briefings.
