San Francisco’s public-power plans appear to be going from bad to worse. Originally promising to provide competitively priced, green-energy alternatives for residents, the program has ballooned into a $19.5 million city contract with Houston-based Shell Energy that is poised to double residential utility bills and put jobs at risk — all without any guarantee of a greener future.
While we all support the concept of cleaner power, there are some bedeviling details about The City’s contract with Shell Energy that need more exploration.
First is the extraordinary cost. Last month, the San Francisco Public Utilities Commission and its Rate Fairness Board indicated that participants may now have to pay twice as much as those who stay with their current provider. This means the average resident could end up paying more than $250 more per year for electric power. Many homeowners, especially those with large households, and almost every business will pay substantially more than that.
These cost increases will hurt our economy and put jobs at risk. According to a report issued last year by the City Controller’s Office, the contract with Shell Energy will cost nearly 100 San Franciscans their jobs. But that report was based on the initial cost estimates, which were much lower. The number of local jobs lost, given the now-higher prices, will almost certainly be more.
Jobs will be lost because the higher rates will not be used to expand green power generation locally. Under the terms of the contract, no new green power facilities will be built in San Francisco or even in California. The funds from the higher rates will be sent to Houston, where Shell Energy is based, and to other out-of-state power generators.
Finally, the Chamber of Commerce is highly concerned about the program’s automatic enrollment, which first enrolls customers and then requires them to opt out during a specific period of time or face financial penalties. Many busy residents might forget to fill out and mail in the paperwork required to opt out, and they might end up paying dramatically higher bills than they can afford.
When residents pay more for energy, it means they have less money available for other goods and services. And that impacts every business in The City along with every family that remains in the CleanPowerSF program.
Clean power is important and some San Franciscans will be willing to pay twice as much for electric power to stay in the city-Shell partnership. But the chamber encourages businesses and residents to do their homework and read the fine print as the city moves ahead with the rollout of CleanPowerSF.
Jim Lazarus is senior vice president of public policy for the Chamber of Commerce.