SFPUC advances cost-based retail electric rate proposal for redevelopment areas including Hunters Point

The San Francisco Public Utilities Commission on Jan. 11 reviewed and advanced a staff proposal, grounded in an independent cost-of-service study, to set retail electric rates for redevelopment areas including Hunters Point.

The study, presented by consultant Frank Perdue, estimated the power enterprise’s average cost of service at roughly $95 million over the study period, or about 9 cents per kilowatt-hour. Perdue and staff identified a residential proposal with a $4 monthly customer charge and a three‑tier energy structure intended both to promote conservation and to stabilize revenue.

Charles Pearl, deputy chief financial officer, said the staff plan layers additional policy elements on top of the cost base: a rate stabilization reserve (estimated contributions of about 1–2 cents per kWh), a Green Power Capital Investment Fund supported largely by the higher usage tiers, and a low‑income discount of roughly 30% for eligible households. "By day one, we should be able to provide 100% clean and green carbon‑free energy for these customers in the redevelopment areas," Pearl said.

Commissioners pressed staff on methodology and distributional effects. Commissioner Moran questioned whether enterprise activities that generate excess revenue should be separated from cost‑based retail calculations, arguing the model's revenue offsets can lower the revenue requirement allocated across all customers. "We’re talking about potentially giving a rate to one part of the city that would be, at the end of five years, 20% below market rates," Moran said, urging clarity on whether market‑value opportunities and general‑fund subsidies are being allocated transparently.

Staff said the rate model can isolate enterprise components and that the present proposal was designed to be cost‑based while offering a targeted price advantage to support redevelopment goals. The Rate Fairness Board, which reviewed the study, told the commission the proposed structure meets fairness criteria and urged regular reporting on how the Green Power fund benefits redevelopment customers.

Public comment from economic‑development staff emphasized using targeted discounts to attract clean‑tech firms to Hunters Point Shipyard and Candlestick Point; Wells Lawson of the Office of Economic and Workforce Development said geographic or site‑level pricing could be a powerful recruitment tool.

Staff recommended returning with the detailed tariff language for adoption in two weeks; the commission signaled support for the direction while asking staff to surface clearer presentations of revenue offsets, the value of any current general‑fund subsidy and options for how frequently rates would be revisited.

The proposal remains subject to final vote after staff files formal rate ordinances and the commission reviews the tariff text.