PG&E puts a $22.5 billion price on San Francisco's grid; the city says $3.4 billion

Overview

Updated Oct 21

PG&E told state regulators that a San Francisco takeover of its electric grid would cost $22.5 billion. Its Oct. 20 filing values the city assets at $13.9 billion and adds $8.6 billion in damages from cutting San Francisco's system away from the rest of the utility's network.

San Francisco put the same assets at $3.4 billion in April. State Sen. Scott Wiener, who wrote this year's law to help the city separate from PG&E, called the utility's number "ridiculous and made-up." The Board of Supervisors has unanimously affirmed the environmental review for the purchase; the California Public Utilities Commission now sets the price, with a proposed decision expected in 2027.

Why it matters

A state-set price decides whether San Francisco can own its power grid. The city says $3.4 billion; PG&E says $22.5 billion.

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Key Indicators

$3.4 billion

San Francisco's valuation of PG&E's city grid

Filed with the CPUC in April 2026; based on an investment banking range of $3.1-$3.6 billion.

$22.5 billion

PG&E's price in its CPUC filing

About $13.9 billion for the assets plus $8.6 billion in separation damages (Oct. 20 filing).

≈6.6x

How much more PG&E asks than the city offers

The roughly $19.1 billion gap between the two valuations.

$8.6 billion

Separation damages PG&E says it is owed

$7.6 billion for business severance plus $1 billion to physically split the system, including a replacement for the Martin Substation in Daly City.

$100 million

Yearly taxes and franchise fees PG&E says the city would forgo

PG&E says a takeover would end these payments, which help fund fire and police protection.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

David Chiu

San Francisco City Attorney

Leading the city's regulatory battle to force PG&E to sell

Matt Dorsey

San Francisco Supervisor, chairs public safety committee

City's most vocal elected champion of public power

Barbara Hale

Assistant General Manager, San Francisco Public Utilities Commission

Argues the city is capable of running its own grid

Dennis Herrera

General Manager, San Francisco Public Utilities Commission

Filed the city's $3.4 billion asset valuation

Sumeet Singh

Chief Executive, Pacific Gas & Electric

Opposing the city takeover

Mark Ellis

Former chief utility consultant, now private energy consultant

Skeptical the takeover will cut rates

Scott Wiener

California state senator, San Francisco

Backing the city's split from PG&E and disputing the utility's valuation

Organizations Involved

Pacific Gas and Electric Company (PG&E)

Investor-owned utility

Seller in a state-run valuation of its San Francisco assets; filed a $22.5 billion price

The investor-owned utility that has supplied San Francisco's electricity for more than 120 years and opposes a city takeover.

San Francisco Public Utilities Commission

Municipal agency

Would acquire and operate the city's electric grid; environmental review affirmed by supervisors

San Francisco's public utility, which delivers Hetch Hetchy water and power and would take over PG&E's city electric grid.

California Public Utilities Commission (CPUC)

State regulatory agency

Running the proceeding that will set fair market value

The state regulator overseeing the valuation that will decide whether San Francisco can buy PG&E's city grid.

Timeline

2019 October 2026

8 events Latest: October 20th, 2026 · 3 weeks ago

Tap a bar to jump to that date

October 2026
PG&E files a $22.5 billion valuation
Latest Filing

PG&E submits CPUC testimony putting the takeover cost at $22.5 billion: about $13.9 billion for its assets plus $8.6 billion in separation damages. It says the city would also need a new substation to replace Martin Substation in Daly City.
October 20th, 2026
State Sen. Scott Wiener rejects PG&E's figure
Statement

Wiener, author of this year's SB 875 to help San Francisco leave PG&E, called the $22.5 billion estimate 'ridiculous and made-up' and disputed the separation damages.
October 2026
April 2026
City files $3.4 billion valuation
Filing

City files $3.4 billion valuation with CPUC, meeting the April deadline for its final offer.
April 2026
February 2026
Supervisors hold hearing on PG&E reliability
Hearing

Board of Supervisors hearing presses PG&E; CEO Sumeet Singh testifies over outages.
February 2026
2026
Supervisors affirm environmental review for the purchase
Vote

The Board of Supervisors unanimously affirmed the final Environmental Impact Report for acquiring PG&E's city grid, after the Planning Commission certified it in July. The review had to be finished before the city could approve a purchase.
2026
December 2025
Mission substation fire blackouts San Francisco
Incident

Mission substation circuit breaker fire cuts San Francisco power for three holiday days.
December 2025
2020
PG&E rejects a second offer
Negotiation

PG&E rejects a second $2.5 billion city offer.
2020
2019
San Francisco makes its first purchase offer
Offer

San Francisco offers PG&E $2.5 billion for its city power grid; PG&E rejects.
2019

Scenarios

CPUC sets a price the city can afford; San Francisco buys the grid

Possible Resolves by Q2 2028

Discussed by: San Francisco city officials, including City Attorney David Chiu and SFPUC's Dennis Herrera

The commission's proposed decision lands near the city's $3.1-$3.6 billion valuation. The Board of Supervisors and voters fund the purchase with bonds; SFPUC takes over operations, ending PG&E's century-plus presence in the city.

The price lands high and San Francisco drops the takeover

Possible Resolves by Q2 2028

Discussed by: PG&E and consultant Mark Ellis

The commission sets a value near PG&E's figure or loads the price with severance costs a city can't bond for. Supervisors conclude a purchase would raise rates, and the city withdraws its petition, leaving PG&E in place.

Negotiated settlement lands between the two asking prices

Unlikely Resolves by End of 2027

Discussed by: Regulatory observers and energy market analysts

Facing a drawn-out proceeding, the two sides settle on a price in between, perhaps several billion dollars, with PG&E selling and the city financing it. The CPUC then ratifies the negotiated transfer.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

1946

Sacramento Municipal Utility District (1946)

Voters in Sacramento approved creating a municipal utility to buy PG&E's electric system in their city. The district, SMUD, took over local power service.

Then

Sacramento replaced PG&E with a locally elected public utility.

Now

SMUD has run its own grid for nearly 80 years, one of the largest public utilities in the country.

Why this matters now

It is the clearest precedent for San Francisco's goal: a city in PG&E's own service territory that successfully municipalized its grid.

2011-2020

Boulder, Colorado municipalization (2011-2020)

Boulder voters approved creating a city-owned utility to replace Xcel Energy, aiming for more local control and cleaner power. The effort ground on for years through feasibility studies and lawsuits as cost estimates climbed.

Then

In 2020, voters approved a settlement with Xcel, abandoning municipalization and keeping the utility.

Now

Boulder's decade of studies and legal fights ended with no transfer of assets, a cautionary example of costs and delays.

Why this matters now

It shows how a municipalization drive can stall on price, the risk San Francisco faces if the state valuation lands near PG&E's figure.