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Committee backs extension and expansion of SFPUC's delegated power procurement authority through 2030
Summary
The committee recommended approval of an ordinance to extend Section 21.43 of the Administrative Code through July 1, 2030, increase annual procurement caps and expand the scope of binding-arbitration authority for the San Francisco Public Utilities Commission's power enterprise.
The Budget and Finance Committee on Feb. 12 recommended that the full Board of Supervisors approve an ordinance extending and raising spending and revenue caps for the San Francisco Public Utilities Commission's (SFPUC) delegated authority to execute power purchase and sale contracts.
SFPUC witnesses and the administration said the measure extends Section 21.43 of the Administrative Code through July 1, 2030, increases the annual purchase expenditure cap from $200 million to $300 million, and raises the annual sales revenue cap from $20 million to $300 million. The change would also broaden delegated authority to include binding-arbitration provisions with any counterparty for electricity and related products.
Julia O'Gain, director of Power Origination and Supply for SFPUC's Power Enterprise, told supervisors the wholesale and retail power markets are highly dynamic and the authority allows the city's power programs, including Hetch Hetchy Power and CleanPowerSF, to transact at a commercial pace. "Section 21.43 allows the San Francisco PUC's power enterprise to acquire energy supplies we need at a commercial pace necessary in our highly competitive power markets," she said.
SFPUC staff said price increases in energy markets and regulatory requirements have driven higher procurement costs since the section was first adopted. The agency said the higher caps align with the SFPUC's financial plan and permit the enterprise to secure supply, meet renewable and reliability obligations and keep rates competitive.
The Budget and Legislative Analyst reviewed the PUC's prior use of the delegation and concluded the authority had been used for rapid, short-timeline contracts that were appropriate to execute without board legislation; the analyst recommended approval.
Several supervisors expressed support while acknowledging the board is ceding some contracting authority; committee leaders emphasized the PUC must continue timely quarterly reporting on contract duration, product types and cost.
On a vote, the committee forwarded the ordinance to the full board with a positive recommendation.
If the full board approves the ordinance, the SFPUC will continue to report quarterly to the Board of Supervisors and the PUC on contracts executed under Section 21.43.
