PG&E puts cost of San Francisco grid takeover at $22.5 billion
Key Facts
PG&E estimated the total cost of the proposed municipal acquisition of its San Francisco electricity distribution grid at about $22.5 billion in testimony submitted to the California Public Utilities Commission. The estimate is part of regulatory proceedings to assess the acquisition, through which the city seeks to bring the local grid into public ownership. The company put the fair market value of the electricity assets and real property interests at about $13.9 billion. It added $7.6 billion in compensation for business separation and $1 billion in compensation for physically separating the grid. Chief Executive Patti Poppe said in the company's statement that the acquisition "does not make financial sense for customers."
By contrast, updated expert testimony submitted by San Francisco valued the assets at about $3.4 billion, according to the city's Public Utilities Commission. City experts based their updated valuation on additional asset details and revised cost estimates. The city's estimate covers the assets, while the company's total includes compensation for business separation and physical separation alongside the value of assets and property. Both sides are presenting their estimates in valuation proceedings before the regulator, ahead of a potential deal. Utilities commission General Manager Dennis Herrera said owning the grid would allow the city to invest directly in electrical infrastructure with a focus on "reliability and affordability."
The San Francisco Public Utilities Commission says it already supplies 75% of the electricity used in the city, although it does not own the local distribution grid. The city's clean electricity program buys power for homes and businesses, while PG&E currently delivers it to consumers. The city's existing operations therefore cover buying and supplying electricity, while the company retains the local delivery assets. According to the commission, its two public power programs saved customers more than $75 million on bills during 2025. The commission compares those savings with what customers would have paid PG&E for electricity over the same period.
San Francisco envisages financing the acquisition by issuing bonds, with the resulting obligations repaid from electricity rate revenue, according to the utilities commission. The plan relies on using that revenue rather than financing the grid purchase from the city budget or taxes. The framework for issuing power bonds is based on a measure approved by San Francisco voters in June 2018 with 77% support. That vote gave the utilities commission authority to issue revenue bonds to build or improve clean electricity facilities. Using that authority requires approval by a two-thirds majority of the Board of Supervisors, according to the commission's account of its financing powers.
On the project's environmental review, the Planning Commission voted unanimously on July 9, 2026 to certify the final environmental impact report for the proposed acquisition. The Board of Supervisors then unanimously upheld the report on September 22, 2026, according to a statement from the San Francisco Public Utilities Commission. The board's endorsement completed a required step before the acquisition of the local grid could be approved. The environmental certification concerns the proposed project to bring the electricity grid into public ownership. Determining asset values and assessing the potential transaction fall within proceedings before the California Public Utilities Commission.
The next phase includes continuing proceedings before the California Public Utilities Commission to determine asset values, according to the San Francisco Public Utilities Commission. That process also includes assessing the potential transaction and planning the transition to public power. On the company's calendar, PG&E scheduled a call to discuss third-quarter results for October 22, 2026. The call begins at 11:00 a.m. Eastern time, according to the company's earnings announcement. Shares of the parent company trade on the New York Stock Exchange under the symbol PCG.