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Port endorses revised PG&E 230 kV term sheet; staff negotiates prepaid rent and community benefits
Summary
The Port Commission authorized staff to enter a revised term sheet with PG&E for a proposed 230 kV transmission redundancy project, preferring a submerged "blue" route and negotiating public benefits including an estimated $14.8 million prepaid rent and an OEWD option on the Hoedown Yard site.
Port staff presented a revised term sheet negotiated with Pacific Gas & Electric for a proposed 230 kV transmission upgrade intended to provide redundancy to downtown San Francisco and reduce the risk of prolonged outages.
Brad Benson, Director of Special Projects, summarized the revision: PG&E proposes a 40-year license with an option to renew (up to 66 years under the Burton Act) and a prepaid rent structure with an expected $14.8 million paid in two lump sums. The commission heard that the submerged "blue" route — which would run about three miles under bay waters and then follow the Transbay cable alignment to Potrero Substation — is staff's preferred route because it minimizes disruption to city streets and, from the port's perspective, creates rentable port impacts on submerged lands.
Benson described negotiated public benefits including an option for the Office of Economic and Workforce Development (OEWD) to acquire the Hoedown Yard (staff cited an OEWD option price of $8.3 million) and the possibility to capture improved land value to support the Hope VI Potrero Terrace and Annex housing project. Staff also outlined potential approaches to screen or enclose the Petro Substation to make adjacent waterfront development more compatible with new uses, and noted the CPUC is leading CEQA review (public comment period through Sept. 16, 2013 according to the staff presentation).
PG&E representative Ontario Smith told commissioners the submerged route is cost-effective and minimizes impacts to surface streets. Commissioners asked clarifying questions about remediation responsibility for the Hoedown Yard (staff said the site has gone through regulatory closure and any future developer would undertake further cleanup if necessary) and asked staff to confirm the projected beautification-fund contribution (staff said the earlier $665,000 estimate needed recalculation and could be closer to $1.2 million). The commission voted to rescind its prior endorsement and authorized staff to carry forward the revised term sheet; Chair announced "Resolution number 1334 has passed."
