Budget Committee pauses Clean Power SF contract, seeks amendments and protections amid PG&E bankruptcy concerns

The Budget and Finance Committee considered a retroactive resolution to approve a 10‑year service agreement between Clean Power SF (the city’s community choice aggregation program operated by the San Francisco Public Utilities Commission) and Pacific Gas & Electric Company for meter reading, billing and related services. The proposed agreement runs January 1 through December 31, 2028, and staff estimated PG&E charges of roughly $1.5–$2.0 million per year, for an estimated total of about $19–$20 million over 10 years; the contract authority was described on the agenda as not to exceed $20,000,000.

Mike Hayams, director of Clean Power SF, described statutory and regulatory requirements under Assembly Bill 117 and CPUC rules that require a CCA to have a service agreement with the incumbent investor‑owned utility to provide billing and related services. Hayams said SFPUC authorized and began operating under the new agreement after executing it on Nov. 13 and commencing service Jan. 1, and staff subsequently determined that Board approval was required because the agreement’s anticipated costs exceeded $10 million.

Dan Goncher from the Budget and Legislative Analyst’s Office recommended an amendment to correct the contract end date to Dec. 31, 2028, and presented the BLA’s cost and enrollment estimates, including a 5% contingency and an estimate of ~385,000 active customers after opt‑outs.

Supervisors pressed staff about the impact of PG&E’s pending bankruptcy. Hayams said PG&E staff assured CCAs they would continue operations during bankruptcy and would seek court authorization to remit CCA payments; staff are consulting bankruptcy counsel and the city attorney. Committee members also asked whether the agreement contains termination language; Hayams and AGM Hale said the agreement includes termination‑for‑default provisions and would be superseded if the city became a fully integrated public utility. AGM Hale and other staff described cash‑flow contingency planning — including coordination with the controller’s office and access to a letter‑of‑credit facility (about $50 million available) — to sustain Clean Power SF if remittances were delayed.

Given remaining questions about legal protections and operational assurances in the event of a PG&E bankruptcy, the committee accepted the BLA’s technical amendments and the chair moved to continue the item to the next Budget Committee meeting for further information; the motion was taken without objection. The item will return to committee before final Board action.