Big oil and eco-conscious San Francisco may sound like the strangest of bedfellows, but The City is on the verge of signing a contract with Shell Energy North America to launch a public-power program.
The City has proposed partnering with Shell for the summer launch of CleanPowerSF, a public-power program designed to deliver greener energy than PG&E, but at a higher cost. The San Francisco Public Utilities Commission underwent two competitive bidding processes before selecting Shell, which also runs a similar program in Marin.
“Shell Energy North America has emerged as the best option to deliver reliable, clean energy to San Franciscans,” said Tyrone Jue, a spokesman for the SFPUC, which would oversee the program.
Shell would procure the energy for the program, which would be delivered using PG&E’s infrastructure.
But the company’s status as a subsidiary of the global oil company Royal Dutch Shell is not lost on environmental advocates and the Board of Supervisors, which recently proposed giving bidding advantages on city contracts to socially responsible companies.
In a recent public hearing, Supervisor John Avalos spoke of Shell’s “pretty mixed” track record and of being implicated in political turmoil where it has worked. For instance, in February, Shell filed a pre-emptive lawsuit against environmental groups — including the Sierra Club — that oppose the company’s planned offshore oil drilling in the Arctic Ocean.
“Would we rather have someone else besides Shell?” asked John Rizzo, political chairman of the San Francisco chapter of the Sierra Club “Sure. But the SFPUC is telling us they are the only ones who can do it.”
For the average residential customer, monthly bills would increase by $7 to $15. Customers would be signed up automatically and have to opt out to return to PG&E.
Eric Brooks, a local clean-energy organizer, said that “in light of Shell’s recent outrageous lawsuit against environmental groups,” The City should reconsider cutting Shell out of its program. Brooks added, however, that regardless of Shell’s involvement, the most important part of the program is the prospect of creating thousands of jobs “to install hundreds of megawatts of local renewables and efficiency in San Francisco over the remainder of this decade.”
Shell declined to comment and referred comments about selection for the program to the SFPUC.
Supervisor David Campos said concerns about working with Shell are “legitimate,” but he said in the energy industry there aren’t ideal socially responsible companies.
“It’s a question of choosing the best options available,” he said.
Avalos said the end game is to “get to a point where we are generating our clean power and we can find other respondents that we can work with.”
The proposed contract includes a $15 million payout to Shell if CleanPowerSF is terminated before the 4½-year contract expires, and $4 million to “mitigate potential program risks.” Both scenarios are unlikely, but the money would have to be allocated just in case.
It’s unclear when the board will consider the contract with Shell. Supervisor Mark Farrell has called for a hearing on the proposed program, which is scheduled for April 12.