Clean Power SF proposes March rate cut, warns reserves will be drawn down
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Summary
Clean Power SF staff proposed a midyear generation-rate reduction effective March 1 — a 25% cut for residential and large commercial customers and 20% for other classes — citing higher fund balances and recent PG&E charge increases that raised typical residential bills about $11 per month. Staff warned the change will use reserves and could require rate rebound by mid‑2027.
Clean Power SF staff proposed a midyear reduction in the program's generation rates that would take effect March 1 and reduce residential and large-commercial generation charges by 25% and other customer classes by 20%.
Cheryl Taylor, Clean Power SF's presenter, said enrollment and participation remain strong with a roughly 95% retention rate since the program began in 2016 and that the program's 100% renewable product accounts for about 19% of annual retail sales. Taylor gave the floor to the program's rates administrator, Matthew Freiburg, who described the financial context behind the recommendation.
"We achieved our 180‑day cash‑on‑hand target at the end of fiscal year 25," Freiburg said. He told commissioners that wholesale power prices have come down and that, combined with a slower pace of purchases, Clean Power SF has seen fund balances grow faster than previously projected. At the same time, PG&E adjusted its charges on Jan. 1, increasing components of customers' bills — Freiburg said that change results in a near‑term increase of about $11 per month for the typical residential customer without any Clean Power SF rate change.
The staff recommendation is to use fund balance to lower Clean Power SF's generation rates in the short term to blunt that PG&E‑driven bill increase. Freiburg described the proposal as a temporary, funded drawdown: "We're using fund balance to offset the loss of revenue," he said, and warned that the drawn reserves could require restoring rates beginning as early as July 1, 2027, depending on future market and cost changes.
Commissioners asked questions about predictability and equity. Commissioner Sevier and Commissioner Singh asked whether achieving public power (city ownership of distribution) would make rates more predictable; Freiburg said owning local distribution would remove PG&E‑driven factors such as the PCIA and give the city greater direct control over rate design. Commissioners also asked why different customer classes would receive different percentage decreases; Freiburg said the program must mirror PG&E's billing structure and that staff targeted larger decreases to the customer classes most affected by the PG&E charge changes.
No action was taken on the proposal at the LAFCO meeting; staff said the rate change will be presented to the San Francisco Public Utilities Commission and that a formal proposal is scheduled for outside presentation on Jan. 27.