SFPUC unveils $571M Power budget, outlines 10-year capital plan and public-power expansion

The San Francisco Public Utilities Commission on Thursday heard a detailed presentation from Assistant General Manager Barbara Hale on the Power Enterprise operating budget and a 10-year capital plan that together rely on roughly $571 million in annual ratepayer funding and align with the city’s Climate Action Plan.

Hale told the commission that Power operates two distinct retail electricity businesses — Hetch Hetchy Power (the city-owned utility) and Clean Power SF (a community choice aggregation program) — serving about 388,000 retail accounts. She said the proposed Power share of the agency’s fiscal-year budget totals roughly $2.2 billion over the planning window and that the Power Enterprise’s requested operating-and-capital appropriation equates to $571 million of ratepayer-funded spending in the coming year.

Why it matters: Hale said the budgets fund projects intended to support electrification and decarbonization in buildings and transportation, retain and grow a local workforce, and expand the city’s ability to serve load as more customers electrify. ‘‘Every dollar in our budget is dedicated to successful implementation of the city’s Climate Action Plan,’’ Hale said.

Key numbers and programs: Hale described a Hetch Hetchy Power annual program budget of about $262 million and a Clean Power SF budget of about $444 million. She estimated roughly $33 million in avoided costs to general fund departments and about $31 million in savings to enterprise customers this fiscal year — a combined figure she said amounts to about $64 million in benefit from Hetch Hetchy service. Hale also said Clean Power SF has saved San Franciscans about $120 million since 2022.

Hale projected customer growth for Hetch Hetchy meters (from about 2,122 meters in 2021 to an estimated 8,453 by 2027) and warned that Clean Power SF faces ‘‘competitive headwinds’’ as PG&E exit fees and shifted generation charges squeeze the program’s margin. She said staff plan to absorb some PG&E-driven cost increases for customers by drawing on reserves and that a noticed rates hearing for Clean Power SF is scheduled for next Tuesday to consider proposed generation-rate changes.

Capital plan and major projects: The presentation reviewed a reprioritized 10-year capital program that staff said reduces short-term appropriations by about $204 million compared with the prior plan. Major projects highlighted included the Spear Street substation (to serve port and waterfront loads), a proposed large-load substation, the Bay Corridor transmission-distribution (BCTD) backup loop to improve reliability, a West Side substation to meet projected load growth, grid-connection funding to serve new buildings, redevelopment-related distribution work (Treasure Island, HOPE SF), upgrades to San Francisco International Airport substations, and a carbon-free steam project in partnership with Cordia to electrify steam manufacture.

Hale described the carbon-free steam effort as a cost-share project with Cordia that would convert steam production from natural gas to electricity and make Cordia a customer of Hetch Hetchy Power. ‘‘San Francisco’s Climate Action Plan identifies decarbonizing the steam process as a high priority,’’ she said, adding the approach allows district heating customers to decarbonize more feasibly than electrifying individual buildings.

Public power expansion and PG&E assets: Hale framed an expanded public-power footprint, including acquisition of PG&E assets that serve San Francisco, as a tool to lower long-term costs, reduce delays, accelerate electrification and modernize the grid. She said some costs associated with the status quo — wholesale distribution charges and disputes with PG&E — amount to ongoing expenses the city could avoid through expansion.

Commissioner questions and staff commitments: Commissioners pressed staff on budget templates, the meaning of ‘‘new proposals’’ versus base-budget increases, and specific line items such as why grid-connections showed zero in early years. Hale explained that zeroes reflect existing appropriations on hand and that some capital costs were rephased rather than cut. Commissioner Jamdar asked for the program-level breakdown of customer programs; Hale agreed to provide the two slides with program detail for inclusion in the record. Budget Director Dunning explained that a time-limited SF Environment work order that funded grant-writing support (about $370,000 annually) is expiring, producing a modest reduction in that particular line while other interagency work with the Department of the Environment continues.

Public comment: A member of the public, Mister DeCosta, urged the SFPUC to accept responsibility and provide transparency for repeated eight-hour outages in some neighborhoods and asked who was responsible for an inundated line near Napoleon Street, noting PG&E has sued the SFPUC over related disputes. ‘‘For 8 hours, we didn’t have power. This happened twice,’’ DeCosta said.

Rates and next steps: Hale previewed Clean Power SF rate work and said the rates team will present details at a noticed hearing next week; she said generation rates are proposed to decline in the near term while customers may still see upward pressure on total bills from PG&E-imposed charges. Hale said the Hetch Hetchy program’s 10-year average projected residential rate increase remained modest (she cited a 5.8% figure as an unchanged 10-year average projection in the presentation).

Procedural action: The commission passed a motion to continue the meeting to a special session on Thursday, Jan. 29, 2026. Commissioner Stacy moved; Commissioner Jamdar seconded. President Arce, Vice President Leverone and Commissioners Jamdar, Stacy and Thurlow recorded ‘‘Aye’’ and the motion passed.

What’s next: Staff will provide the requested program-detail slides for the record, present Clean Power SF rates at the noticed hearing next week, and return to the commission on outstanding capital and contract items as required.

Sources: Presentation and discussion at the San Francisco Public Utilities Commission meeting (Power Enterprise budget and 10-year capital plan).