Public Utilities Revenue Bonds
Public Utilities Revenue Bonds
Authorizes the San Francisco Public Utilities Commission to issue revenue bonds to pay for power and electrical facilities without having to obtain voter approval.
What the Measure Would Do
This measure would amend the City Charter to give the San Francisco Public Utilities Commission (SFPUC) the authority to issue revenue bonds to pay for new power facilities with a two-thirds vote of the Board of Supervisors and the support of the mayor.1
While the SFPUC has the authority to issue revenue bonds for drinking water and wastewater facilities, the agency is mostly restricted to using cash to pay for new power facilities; it can issue revenue bonds only for a narrow set of power-related projects, including energy efficiency upgrades and improvements to the Hetch Hetchy power system.
Under this measure, revenue bonds for power facilities would be subject to the same process that now exists for water and wastewater bonds: obtaining approval from the SFPUC and the Revenue Bond Oversight Committee, passing a two-thirds vote of the Board of Supervisors and getting the support of the mayor, following an independent engineering evaluation and a certification of compliance with the California Environmental Quality Act.
The SFPUC could use the new revenue-bonding authority to build new clean power facilities and to invest in newer sustainable technologies, such as electric vehicle infrastructure and energy storage. The ballot measure would specifically prohibit the SFPUC from using its new revenue-bonding authority to invest in any fossil fuel or nuclear power facilities.
The SFPUC provides water, wastewater and power services to residents and businesses in San Francisco. The agency’s Power Enterprise program has two roles. First, it delivers clean power from the Hetch Hetchy hydroelectricity system to all municipal electricity users, including Muni, the fire department, the airport and the school district. Second, it provides clean energy to San Francisco residents and businesses that are enrolled in CleanPowerSF, a community-choice energy program that was established in 2016. This charter amendment would make it easier for the SFPUC to issue debt in order to finance projects that serve both classes of customers.
In 2015, the SFPUC became subject to federal regulatory requirements for energy reliability that will require it to own and operate more power facilities to serve its growing base of CleanPowerSF customers. This measure would help the SFPUC pay for those facilities more cost-effectively and scale up its ability to take on projects.
This measure was placed on the ballot by a unanimous vote of the Board of Supervisors. As an amendment to the City Charter, it must be on the ballot and requires a simple majority (50 percent plus one vote) to pass.
- Using bonds to finance projects is a prudent business practice that utilities, like most businesses, need to maintain assets in a state of good repair and to strategically expand when necessary.
- Requiring voter support for infrastructural revenue bonds is too burdensome, typically requiring an expensive public information campaign to win. Other types of revenue bonds that support the city’s infrastructure have already been exempted from having to obtain voter approval.
- This measure would support San Francisco’s climate action goals by making it easier for the city to invest in innovative and sustainable clean power technologies, such as electric vehicle infrastructure, grid improvements and solar-plus-storage batteries.
- This measure would help the city comply with new electricity reliability requirements more easily and cost-effectively.
- Some voters might object to taking decision-making power — in this case for revenue bonding of power and electricity facilities — away from voters and vesting it with the SFPUC.
Prop. A would give the city’s power operations the same ability to issue debt that is already delegated to the airport, the port and the SFPUC’s own water and sewer operations. We believe it’s important to confer on the city’s public electricity utility the ability to reinvest in aging infrastructure, respond to new sustainability technologies, comply with regulations and maintain cost-effectiveness for its customers.
1 Unlike other cities and counties, the San Francisco City Charter requires voter approval for revenue bonds unless otherwise exempted. There are about eight different exemptions to this voter approval requirement.