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San Francisco Public Utilities Commission
San Francisco Public Utilities Commission
San Francisco Public Utilities Commission
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San Francisco Public Utilities Commission (SFPUC)
SFPUC logo
Agency overview
Formed1932
JurisdictionCity and County of San Francisco
Headquarters525 Golden Gate Ave., San Francisco, CA 94102
Employees~2,700
Annual budget$3.5 billion USD (operating and capital combined, 2023-24)
Agency executive
Websitesfpuc.gov

The San Francisco Public Utilities Commission (SFPUC) is a public agency of the City and County of San Francisco that provides water, wastewater, and electric power services to the city. The SFPUC also provides wholesale water service to an additional 1.9 million customers in three other San Francisco Bay Area counties.[1]

Functions

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The SFPUC manages a complex water supply system consisting of reservoirs, tunnels, pipelines and treatment facilities and is the third largest municipal utility agency in California.[2] The SFPUC provides fresh water from Hetch Hetchy Reservoir and other sources to 2.7 million customers for residential, commercial, and industrial uses. About one-third of its delivered water is sent to customers within San Francisco, while the remaining two-thirds are sent to customers in Alameda, San Mateo, and Santa Clara counties.

The SFPUC has been an clean power provider for more than 100 years, when it began generating hydro power for the construction of the O'Shaughnessy Dam. The SFPUC Power Enterprise includes two power programs: Hetch Hetchy Power and CleanPowerSF.

Hetch Hetchy Power generates and delivers 100% greenhouse gas-free energy to more than 6,300 customer accounts, including municipal buildings and facilities, such as San Francisco General Hospital, San Francisco International Airport, schools, libraries and the Muni transit system. Hetch Hetchy Power also provides electricity to some commercial and residential developments, including affordable housing sites.[3]

The SFPUC also administers and operates CleanPowerSF, a Community Choice Aggregation program within the guidelines of California State law.

Together, the SFPUC’s two power programs meet over 75% of the electricity demand in San Francisco. In 2023, CleanPowerSF and Hetch Hetchy Power collectively saved customers more than $170 million on electric bills compared to for-profit utility PG&E.[3]

The SFPUC manages an extensive wastewater system that collects, conveys, and provides secondary treatment to combined sewage flows (both stormwater and sewage) within the City & County of San Francisco before discharging it into the San Francisco Bay and the Pacific Ocean.[4] The Southeast Water Pollution Control Plant handles about 80% of the city's wastewater, while the Oceanside Water Pollution Control Plant handles the remaining 20%. A third facility, the North Point Wet-Weather Facility, only operates during wet weather to provide primary treatment to combined sewage prior to discharging to the San Francisco Bay.[5]

Historical origins

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1922 map showing the pipelines of the SVWC and the Sunol Water Temple

From the mid-19th Century, much of the Alameda County watershed was owned by the Spring Valley Water Company (SVWC), a private enterprise which held a monopoly on water service to San Francisco.[6][7]

In 1906, William Bowers Bourn II, a major stockholder in the SVWC, and owner of the giant Empire Mine, hired Willis Polk to design a "water temple" atop the spot where three subterranean water mains converge, from the Arroyo de la Laguna and Alameda Creeks, the Sunol infiltration galleries, and a 30-inch pipeline from the artesian well field of Pleasanton.[8][9]

Municipal efforts to buy out the SVWC had been a source of constant controversy from as early as 1873, when the first attempt to purchase it was turned down by San Francisco voters because the price was too high.[10] Other sources claim that as one born into wealth and classically educated, Bourn was partially motivated by a sense of civic responsibility.[11]

Prior to completion of the Hetch Hetchy Aqueduct in 1934, half of San Francisco's water supply, approximately 6 million gallons per day passed through the Sunol temple.[12] The SVWC, including the temple, was purchased by the city of San Francisco in 1930 for US$40 million.[8][10]

In 1932, a new city charter was adopted which established the San Francisco Public Utilities Commission. At the time of its formation, the commission was responsible for the Hetch Hetchy Project, San Francisco Municipal Railway, Water Department, and Airport.[13][10] The Airport was later transferred out of the SFPUC to the newly formed Airport Commission in 1971.[14] Similarly, in 1994 the Municipal Railway was moved out to the separate Public Transportation Commission.[15]

Structure and leadership

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The SFPUC is headed by a board consisting of five Commissioners, who are nominated by the Mayor of San Francisco and confirmed by the San Francisco Board of Supervisors. Each of the five Commissioners is chosen according to criteria set forth in the San Francisco City Charter:

Seat 1 on the Commission shall be a member with experience in environmental policy and an understanding of environmental justice issues. Seat 2 shall be a member with experience in ratepayer or consumer advocacy. Seat 3 shall be a member with experience in project finance. Seat 4 shall be a member with expertise in water systems, power systems, or public utility management, and Seat 5 shall be an at-large member.[16]

The Commission meets on the second and fourth Tuesdays of each month. Their responsibility is to provide operational oversight in such areas as rates and charges for services, approval of contracts, and organizational policy.

The board appoints a General Manager as the chief executive of the SFPUC, with each division headed by an Assistant General Manager (AGM). The six divisions are: Business Services, External Affairs, Infrastructure, Power Enterprise, Water Enterprise, and Wastewater Enterprise.[17]

Controversy

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Main article: San Francisco Department of Public Works corruption scandal

Then-SFPUC director Harlan Kelly resigned on November 30, 2020,[18] charged with accepting bribes from a contractor.[19][20] Kelly's trial began in June 2023.[21] Kelly was convicted in July 2023 of felony bribery and bank fraud [22] and sentenced to four years in prison. [23]

Environmental sustainability

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With the goal of improving sustainability and the city of San Francisco's goal to become a "zero emission city" by 2030, the SFPUC is implementing a number of projects in all of its core businesses: water, power and sewer.

  • Water: SFPUC is applying a "Water System Improvement Program" (WSIP) to manage a wide range of projects focusing on the optimization of pipelines, pump stations and water tanks usage.
  • Power: SFPUC is generating and providing different typologies of clean energy (hydroelectric, solar and biogas) for municipal services and citizens needs. Moreover, in collaboration with Paradox Engineering is seeking to exploit street light pole developing an integrated infrastructure with the specific scope of monitor the usage of urban services, optimize the power consumption and consequently reduce waste.[24]
  • Sewer: SFPUC is applying the "Sewer System Improvement Program" (SSIP) to manage a wide range of projects that includes optimization of pump stations and wastewater treatment processes. In addition, SFPUC has applied over $50M of funding to pilot and are constructing various Low Impact Designs (LID) through their "Early Implementation Projects" to test if LID features such as bio-retention systems or creek daylighting projects would reduce the volume of stormwater that would be collected, conveyed and treated. By reducing the stormwater flows to the wastewater treatment plants, energy consumption may be reduced. SFPUC is equally committed to environmental justice causes and will address sewage flooding at many flood-prone neighborhoods in San Francisco: (1) Cayuga Avenue, (2) Alemany Circle, (3) Folsom and 17th Streets, (4) Toland Street, (5) Foerster Street, (6) Urbano Dr and Victoria Street, (7) Wawona Ave and 15th Ave. The low-lying areas of San Francisco along the San Francisco Bay is vulnerable to periodic flooding from runoff and wastewater during winter storms. Continued land subsidence, sea level rise, and urban growth in hitherto industrial neighborhoods will continue to challenge the runoff and sewage collection and conveyance system.

See also

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Further reading

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References

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Revisions and contributorsEdit on WikipediaRead on Wikipedia

San Francisco Public Utilities Commission

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from Grokipedia

The San Francisco Public Utilities Commission (SFPUC) is a department of the City and County of San Francisco that delivers retail drinking water and wastewater services to approximately 800,000 city residents, wholesale water to an additional 1.8 million customers across parts of Alameda, San Mateo, and Santa Clara counties, and hydroelectric power generated from the Hetch Hetchy system primarily to municipal facilities including public transit operations.
Governed by a five-member commission appointed by the mayor and confirmed by the Board of Supervisors, the SFPUC oversees a vast infrastructure including the 167-mile Hetch Hetchy Regional Water System, which sources unfiltered water from the Sierra Nevada, and the Southeast Water Pollution Control Plant, one of the largest wastewater treatment facilities in the nation. The agency has invested billions in seismic upgrades through the Water System Improvement Program, enhancing reliability against earthquakes, while its power division has delivered cost savings exceeding $120 million annually to customers via low-cost renewable hydropower.
Despite these operational successes, the SFPUC has been marred by governance failures, most notably the 2023 federal conviction of former General Manager Harlan Kelly for bribery and fraud in steering contracts to favored vendors, exposing vulnerabilities in procurement oversight amid multi-billion-dollar projects. Recent audits have further revealed persistent issues with contract administration and abuse of delegated authority, underscoring challenges in maintaining integrity within a publicly funded enterprise.

Historical Development

Origins in Early San Francisco

Prior to the , San Francisco's water supply relied on local streams such as Lobos Creek and Arroyo de los Dolores, springs including El Polin and Mountain Lake, as well as wells and private cisterns serving the small and . The 1849 triggered a population surge from approximately 1,000 to over 25,000 residents by year's end, overwhelming these sources and leading to widespread shortages, with water peddlers charging up to $1 per gallon. This scarcity was exacerbated by six major fires between 1850 and 1852 that devastated the city, as inadequate water hindered firefighting efforts. In response, the city's Common Council appointed a committee in June 1850, including figures like Capt. Lucius A. H. Folsom and William D. M. Howard, to secure a water supply for , raising $7,000 for the initiative. Early private ventures followed, such as the Mountain Lake Water Company established in 1851, which failed by 1853, and the Sausalito Water and Steam Tug Company, which imported water via barge starting that year. More enduring was the City Water Works, incorporated in 1857 by John Bensley, Alexis Schmidt, and Anthony Chabot, delivering up to 2 million gallons per day from Lobos Creek reservoirs. The Spring Valley Water Works, franchised in 1858, initially supplied modest quantities from a local spring but expanded aggressively, acquiring the Bensley company in and emerging as the dominant provider by consolidating rival operations. Despite infrastructure growth, including pipelines and reservoirs, persistent shortages plagued the system, as noted in 1877 assessments questioning supply adequacy amid urban expansion. By the late , Spring Valley's monopoly status resulted in elevated water rates and service unreliability, fueling dissatisfaction and litigation; from 1873 onward, municipal committees advocated for city acquisition, including a 1875 recommendation for a reservoir preempted by the company. These pressures reflected broader demands for oversight to address the private entity's high costs and inadequate responsiveness to growing needs.

Hetch Hetchy Aqueduct and Key Expansions

In the early 1900s, San Francisco's municipal water authorities pursued control over the Hetch Hetchy Valley in to secure a reliable Sierra Nevada water supply amid post-1906 population growth and chronic shortages from local sources. This effort, spanning 1901 to 1913, involved lobbying Congress for rights to dam the , culminating in the Raker Act of December 19, 1913, which granted the city rights-of-way for water diversion and hydroelectric development while prohibiting private power sales outside municipal boundaries. The campaign faced significant opposition from environmental groups, notably the under , who in 1908 and subsequent writings decried the project as desecration of a pristine Yosemite-like , arguing it prioritized urban utility over natural preservation. Despite internal divisions and Muir's public campaigns, including appeals to President , proponents emphasized public necessity for gravity-fed water and power, overriding conservationist objections through federal legislation. Construction commenced post-Raker Act, with O'Shaughnessy Dam groundbreaking in 1919 and completion in May 1923, impounding Reservoir to a capacity of approximately 360,000 acre-feet. The 167-mile Aqueduct, featuring tunnels, siphons, and canals, reached full operation on October 28, 1934, delivering up to 400 million gallons daily from the Sierra Nevada to reservoirs and enabling initial hydroelectric output at facilities like Early Intake Powerhouse. This system generated clean, renewable power—now managed by the SFPUC's Power enterprise—supporting municipal needs and excess sales to neighboring districts under Raker Act terms. Parallel to aqueduct development, expanded infrastructure in the 1910s to handle surging urban demands, constructing combined sewers and outfalls such as those at Hunter's Point to manage and amid rapid rebuilding. Early treatment efforts included rudimentary septic and facilities by the late 1910s, precursors to modern plants, addressing overflows from population booms that strained pre-1906 systems. These expansions laid groundwork for the integrated utility now under SFPUC oversight, focusing on conveyance rather than advanced purification until later decades.

Post-1930 Reorganizations and Modern Challenges

The San Francisco Public Utilities Commission was established as a consolidated department under the City Charter adopted on March 26, 1931, and effective January 8, 1932, integrating the management of , hydroelectric power generation, and sewer services previously handled by separate entities. This reorganization followed the city's $40 million acquisition of the private Spring Valley Water Company in 1930, transitioning water delivery from private to public control and centralizing oversight to address post-1906 earthquake vulnerabilities in distribution infrastructure. The , a magnitude 6.9 event centered 60 miles south of , exposed residual seismic risks despite prior reinforcements, prompting accelerated investments in redundancy and fortification. Although the water system largely withstood the shaking without major breaks, the event catalyzed comprehensive upgrades, including pipeline reinforcements and facility retrofits designed to endure magnitudes up to 7.9. These efforts culminated in the voter-approved $4.8 billion Water System Improvement Program in 2002, which enhanced storage capacity, seismic valves, and interconnectivity to mitigate disruptions from future quakes. Severe droughts in 1976-77 and 2012-16 further drove adaptations, with the earlier event—the driest consecutive years on record for the watershed—imposing strict rationing that reduced urban supplies by up to 50% and highlighted needs for expanded reservoirs and conservation infrastructure. The 2012-16 drought, California's most severe in 1,200 years by some metrics, saw SFPUC enforce 10-15% mandatory cutbacks, yielding a 20% drop in use through , turf removal incentives, and auxiliary supply planning, while reinforcing storage via WSIP completions. In the 1990s and 2000s, operational streamlining merged aspects of and divisions into unified enterprise frameworks for cost efficiencies, rejecting proposals in favor of public models amid ratepayer concerns over debt and reliability.

Governance and Organizational Structure

Commission Composition and Appointment Process

The San Francisco Public Utilities Commission (SFPUC) consists of five members appointed by the mayor, subject to confirmation by a majority vote of the Board of Supervisors. This process, established under the city charter, positions the mayor as the primary nominator while granting the supervisors veto power over nominees, creating a balance intended to ensure accountability through elected oversight. Commissioners serve staggered four-year terms, with initial terms for certain seats adjusted post-2008 reforms to prevent full turnover at once, thereby promoting continuity in decision-making. The city charter does not impose formal minimum qualifications for commissioners, such as required expertise in utilities, , or environmental , leaving appointments open to a broad range of candidates. This lack of mandates has drawn criticism for enabling politicization, with historical appointments under mayors like Willie Brown prioritizing political allies and donors over technical proficiency, leading to concerns about influence dynamics favoring loyalty over merit. Such practices have fueled debates on whether the commission adequately safeguards ratepayer interests amid complex challenges, though proponents argue the confirmation process mitigates unqualified picks. The commission's core responsibilities include setting policy direction, approving rates and charges, overseeing major contracts, and appointing the who executes day-to-day operations. These powers position it as the primary accountability mechanism for the SFPUC's , , and power enterprises, with influence extending to long-term . High-profile scandals, such as the 2023 conviction of former Harlan Kelly for in contract steering, have prompted scrutiny of commission oversight and contributed to leadership turnover, underscoring vulnerabilities in the appointment system's ability to insulate against .

Leadership Roles and Decision-Making

The General Manager of the San Francisco Public Utilities Commission (SFPUC) serves as the chief executive officer, appointed by the five-member Commission and responsible for overseeing daily operations, managing approximately 2,700 employees, and coordinating across the agency's water, wastewater, and power divisions. As of October 2025, Dennis J. Herrera holds this position, having been unanimously selected in September 2021 following a period of interim leadership. The GM delegates authority through a structure including a Deputy General Manager and Chief Operating Officer—currently Ronald P. Flynn—and Assistant General Managers (AGMs) who lead enterprise-specific teams for water supply, wastewater treatment, and power enterprise operations, ensuring alignment on infrastructure projects, regulatory compliance, and service delivery. Major decisions, such as policy approvals, rate adjustments, contract awards exceeding delegated thresholds, and authorizations for bond issuances, require Commission oversight and are processed through bi-weekly meetings held on the second and fourth Tuesdays of each month at SFPUC headquarters. These proceedings incorporate public hearings to allow stakeholder input, with final votes by the Commission—composed of five members appointed by the Mayor and confirmed by the —ensuring adherence to the City Charter's provisions under Section 4.112 for operational governance and fiscal accountability. The GM implements Commission directives, including executing contracts and managing capital programs like aqueduct maintenance or seismic upgrades, while internal audits and legal reviews mitigate risks in procurement and environmental compliance. SFPUC leadership has faced instability, with multiple General Managers in the and amid federal investigations into and procurement irregularities. Harlan L. Kelly Jr., who served as GM from 2014 until his resignation on November 30, 2020, following charges of honest services wire fraud and , exemplified this turnover; he was convicted on July 14, 2023, and sentenced to four years in on March 19, 2024, for accepting bribes to influence contracts. Prior to Kelly, Ed Harrington led from 2005 to 2014, after which interim appointments bridged gaps during probes into bid-rigging and conflicts of interest, contributing to perceptions of elevated executive churn compared to peer utilities. This pattern has prompted enhanced internal controls, though ongoing audits highlight persistent challenges in contract administration delegation.

Operational Divisions and Workforce

The San Francisco Public Utilities Commission (SFPUC) organizes its operations into three primary business enterprises: water, wastewater, and power. The water enterprise encompasses the and Treatment Division, which manages sourcing, purification, and distribution of , employing approximately 240 staff across treatment facilities and related sections headquartered in Millbrae. The wastewater enterprise oversees collection, treatment, and disposal processes, including the Collection System Division responsible for sewer maintenance and quality assurance programs. The power enterprise handles hydroelectric generation at facilities and programs like CleanPowerSF. Support divisions facilitate these enterprises, including engineering for infrastructure design and maintenance, business services for financial and administrative functions, and for billing and inquiries. Additional units such as the Bureau of Construction Management and Urban Watershed Planning Division coordinate capital projects and environmental compliance. This structure enables integrated management of SFPUC's regional systems spanning multiple counties. SFPUC employs about 2,300 workers across its operations, with a focus on retention and diversity initiatives to support service reliability. The is predominantly unionized, represented by organizations including SEIU Local 1021 for service and administrative roles, IFPTE Local 21 for professional and technical staff, and IBEW locals for electrical trades. Union agreements emphasize competitive wages and benefits, contributing to stable amid capital-intensive projects expected to generate thousands of jobs over the next decade. SFPUC prioritizes development, including apprenticeships where local hires accounted for 62% of apprentice hours on select projects in 2024.

Core Functions and Infrastructure

Water Supply Sourcing and Delivery

The San Francisco Public Utilities Commission (SFPUC) sources approximately 85% of its potable water from the Hetch Hetchy Reservoir in the watershed within , where rainfall and snowmelt accumulate in a 652-square-mile basin impounded by O'Shaughnessy Dam. The remaining supply derives from local surface reservoirs on the and in Alameda County, including Crystal Springs, San Andreas, Pilarcitos, and Calaveras, which provide backup during periods of reduced Sierra Nevada inflows, such as droughts. extraction remains minimal, serving primarily emergency or supplemental needs. This diversified sourcing supports delivery to about 800,000 retail customers in and wholesale agencies serving an additional 2.4 million people across the Bay Area. The Regional Water System conveys untreated Sierra via a gravity-fed network spanning 167 miles, including over 280 miles of pipelines, more than 60 miles of tunnels, and multiple hydroelectric powerhouses before reaching Bay Area treatment and distribution points. Local undergoes treatment at facilities like the Sunol Valley Water Treatment Plant, which processes inflows from Calaveras and Reservoirs using filtration, disinfection, and, as of ongoing upgrades completed in the mid-2020s, ozonation to mitigate taste-and-odor issues. Citywide distribution occurs through an extensive network of pipelines exceeding 389 miles, supplemented by reservoirs and pump stations to maintain pressure and flow. On average, the SFPUC delivers approximately 192 million gallons per day to its combined retail and wholesale customers, with volumes fluctuating based on seasonal demand and precipitation. To minimize losses, the agency employs programs targeting pipe breaks and mainline inefficiencies, achieving unaccounted-for rates of 9-12% in recent fiscal years, primarily attributable to physical leaks rather than or metering errors. Post-2010s droughts, resilience enhancements have focused on rehabilitation—such as upgrades along the San Joaquin route—and operational strategies like , enabling sustained supply without reliance on costlier alternatives like large-scale , which studies indicate would require substantial energy inputs exceeding current gravity-based efficiencies.

Wastewater Collection and Treatment

The San Francisco Public Utilities Commission's (SFPUC) wastewater collection system consists of approximately 1,900 miles of sewer mains and laterals, forming a combined network that conveys both sanitary and runoff primarily within the city boundaries. This serves 's roughly 884,000 residents, collecting an average dry weather flow of about 60 million gallons per day, which increases significantly during wet weather events due to the combined system design. is directed to three main treatment plants: the Southeast Control Plant (SEP), Water Pollution Control Plant, and Oceanside Water Pollution Control Plant, with the SEP processing nearly 80 percent of the city's total flow. At the SEP, the largest facility built in with a maximum capacity of 250 million gallons per day, influent undergoes preliminary treatment for grit and debris removal, followed by primary to separate solids, secondary biological treatment via processes, and disinfection using ultraviolet light or chlorination to meet Plan standards for discharge. Treated effluent from the SEP and other plants is discharged through ocean outfalls into the via pipelines extending from the plants, such as the Southwest Ocean Outfall from the SEP, ensuring dilution and compliance with effluent limits for parameters like , , and pathogens. generated from primary and secondary treatment are managed through at facilities like the SEP's digesters, producing for energy recovery while the digested solids are dewatered and processed for beneficial reuse or disposal, with ongoing $3 billion upgrades aiming to enhance . Storm events frequently overwhelm the aging combined system, leading to combined sewer overflows (CSOs) where untreated or partially treated wastewater bypasses treatment and enters creeks, streets, or the bay; for instance, during the 2022-2023 wet season, the SFPUU discharged over 4 billion gallons of combined sewage due to such overflows. In early 2023 alone, heavy rains triggered millions of gallons of overflows into San Francisco Bay and local waterways, with more than 3 million gallons spilling since late December 2022. To address vulnerabilities, the SFPUC completed the $717 million New Headworks Facility at the SEP in September 2025, consolidating operations from two outdated structures into a single, all-weather facility capable of handling 250 million gallons per day, with 95 percent grit removal efficiency (a 45 percent improvement), advanced odor control systems to reduce emissions, and seismic design to withstand a magnitude 7.8 earthquake and up to 36 inches of rainfall. This upgrade enhances operational reliability and neighborhood air quality in the Bayview area while supporting broader $3 billion modernization efforts at the SEP to transform it into a center.

Power Generation, CleanPowerSF, and Distribution

The San Francisco Public Utilities Commission (SFPUC) operates the Power System, which generates an average of 1.6 billion kilowatt-hours of electricity annually through seven hydroelectric facilities with a combined capacity of 385 megawatts, supplemented by 8.5 megawatts of . This output, equivalent to approximately 20% of the city's electricity needs, is 100% greenhouse gas-free and primarily sold at wholesale rates to (PG&E) for distribution within , as the SFPUC lacks a comprehensive local transmission and distribution network. In 2016, the SFPUC launched CleanPowerSF, a (CCA) program that procures retail for participating customers using PG&E's distribution infrastructure. Operating on an basis, the program automatically enrolls eligible residential and commercial customers, with opt-out rates remaining low at around 3% since inception. CleanPowerSF delivers with renewable content exceeding PG&E's bundled service (approximately 23-33% renewable), including an optional SuperGreen product offering , though default enrollment features a standard mix meeting California's plus additional green procurement; as of 2025, SuperGreen participation stands at about 2% of customers. The program supports grid reliability through initiatives like Peak Day Partners, enabling business customers to curtail usage during high-demand events and avoid blackouts, as demonstrated in 2022 conservation efforts that saved over 183,000 kilowatt-hours. The SFPUC's "Our City, Our Power" initiative, announced in February 2020, seeks to expand public power by acquiring PG&E's local electric distribution assets through negotiated purchase or if necessary, aiming for full municipal control over generation, procurement, and delivery. In 2024, the proposed a $2.5 billion for PG&E's infrastructure, which the utility rejected as undervalued, potentially complicating workforce integration from PG&E's roughly 500 local employees into SFPUC operations. This expansion would build on CleanPowerSF's retail model and generation to enable direct public distribution, though regulatory and acquisition hurdles persist.

Financial Operations and Ratepayer Impact

Revenue Model, Budgeting, and Debt

The San Francisco Public Utilities Commission (SFPUC) operates as a self-sustaining enterprise department, deriving its revenues primarily from customer charges for retail and wholesale , sewer service fees, and electricity through the Power and CleanPowerSF programs, without any reliance on the City's General Fund. These enterprise funds—, , Water and Power, and CleanPowerSF—generate approximately 90% of revenues from utility , supplemented by minor non-operating sources such as interest and fees. Wholesale to agencies outside contribute significantly to the Water Enterprise, while power revenues include to municipal and retail customers. Budgeting follows a biennial cycle with annual updates, incorporating a 10-year to project revenues, operating expenses, and capital needs while targeting full cost recovery through rate adjustments. For FY 2024-25, the adopted operating totals $2.023 billion across enterprises, balanced by projected revenues of the same amount, covering operations, maintenance, and debt service. FY 2025 projections maintain similar scale, with revenues at $765 million, at $457 million, Power at $305 million, and CleanPowerSF at $463 million, funding expenses including $776 million for and $467 million for . for FY 2024-25 to FY 2025-26 totals $3.12 billion, focused on , with funding split 75-85% debt and the balance from pay-as-you-go revenues. Audited , such as the FY 2023 , confirm net positions exceeding $3 billion department-wide, with reserves meeting or surpassing policy minimums of 90 days operating expenses (25% of annual costs) for core enterprises. Debt financing supports capital programs, with outstanding obligations totaling approximately $8.7 billion as of FY 2023, primarily revenue bonds secured by enterprise pledges. Recent issuances include $1.11 billion in new revenue bonds during FY 2022-23, encompassing refundings and new capital funding, and approximately $718 million in combined series for in 2024 (e.g., $547 million Series C Green Bonds). service consumes 20-25% of aggregate revenues, with FY 2024-25 projections at $467 million and rising to $525 million in FY 2025-26, maintained through coverage ratios exceeding policy requirements of 1.25 times service (e.g., 1.85 times for and 3.17 times for in FY 2023). Historical financial plans have faced critique for deferring projects to moderate rate impacts, potentially risking reliability, though recent 10-year capital plans allocate $11.8 billion to address such gaps via increased and revenue funding.

Rate Structures, Hikes, and Affordability Analyses

The San Francisco Public Utilities Commission (SFPUC) employs a tiered rate structure for water services, featuring a fixed monthly service charge based on meter size and variable quantity charges under a three-tier inclining block system for single-family residential customers, designed to encourage conservation by increasing rates for higher usage levels. Sewer rates consist of three components: a fixed monthly service charge, a volume-based charge proportional to water usage, and an additional fixed charge for certain enterprise costs, with rates aligned to water consumption to reflect treatment burdens. For fiscal years ending 2024 through 2026, the SFPUC approved water and sewer rate increases effective July 1, 2023, resulting in an average annual monthly bill rise of $12.69 for single-family households, equivalent to approximately 8.3% per year, to fund infrastructure maintenance and seismic upgrades. In April 2025, the Commission approved power rates for Power and CleanPowerSF, implementing a 10% retail increase for Hetch Hetchy customers (about $8 monthly for residential users) while holding CleanPowerSF rates steady to promote billing predictability amid fluctuating markets. Average single-family household water and sewer bills reached approximately $142 monthly as of 2023, exceeding national medians for combined utility services and straining budgets in a high-cost region. The SFPUC's affordability metrics target keeping the average residential bill below 2.5% of and low-income bills (20th ) under specified thresholds over a 20-year horizon, though projections indicate potential tripling to $436 monthly by the 2040s without offsets. Low-income assistance includes a two-tier discount program offering up to 40% reductions on and sewer bills for at or below 30% of area , expanded in 2023, but enrollment data shows limited coverage relative to eligible populations amid rising baseline costs. Resident feedback in 2024 highlighted burdens from these hikes, with reports of "skyrocketing" bills coinciding with billing glitches that delayed notices and inflated backcharges for thousands of households, exacerbating perceptions of disproportionate costs against inconsistent service reliability. Public meetings and analyses noted that while hikes fund essential capital needs, they have prompted calls for enhanced mitigation beyond discounts, given stagnant per-capita usage reductions failing to offset revenue shortfalls.

Comparisons to Private Utilities and Efficiency Metrics

SFPUC water and sewer rates produce average monthly bills of about $142 for single-family homes, positioning them above national medians by approximately 20-30% when adjusted for usage and regional factors, driven by high maintenance and seismic upgrade costs. In contrast, private water utilities often maintain lower per-customer costs through scaled efficiencies and profit incentives, though direct comparisons vary by locality; for example, national data indicate private providers achieve better price efficiency in competitive markets. Electricity generation under CleanPowerSF remains competitive with PG&E, with 2024 rates approved at an 8.5% increase—equating to $4 more monthly for residential users—while PG&E implemented multiple hikes exceeding 10% in the same period, partly offset by SFPUC's subsidies from water enterprise revenues. Reliability metrics highlight disparities tied to operational structure. SFPUC-managed water delivery exhibits low outage rates due to its regional and redundancy measures, outperforming fragmented private networks in seismic zones. For power, CleanPowerSF's generation reliability benefits from hydroelectric assets like , yielding higher customer satisfaction scores than PG&E's overall service; however, distribution outages—controlled by PG&E—persist as a , with PG&E recording California's highest average interruption duration index (SAIDI) in recent years, often exceeding 200 minutes annually per customer amid protocols. Efficiency indicators underscore structural challenges in public operations. SFPUC labor costs per customer exceed those of peers like the Municipal Utility District (EBMUD) by up to twofold in select categories, attributable to generous public-sector pensions and union-negotiated wages that inflate operational expenses without corresponding productivity gains. Empirical studies reveal private utilities generally consume less per unit of output, reflecting tighter controls and technological absent in government-run monopolies. Causal factors include diminished incentives in public entities, where lack of profit-driven competition fosters productivity stagnation; econometric analyses confirm private distribution firms outperform publics on metrics like and outage minimization, though results vary by regulatory environment.

Controversies and Criticisms

Corruption Scandals and Contracting Abuses

In November 2020, Harlan Kelly, the General Manager of the San Francisco Public Utilities Commission (SFPUC) since 2012, was federally indicted on charges of honest services wire fraud for accepting bribes in exchange for influencing building permit approvals and procurement decisions. Kelly, who had previously served as the SFPUC's assistant general manager, conspired with permit expediter Walter Wong—who pleaded guilty to related bribery charges in 2021—to secure expedited approvals and favorable contract terms for Wong's clients, including hidden cash payments and home renovations valued at over $100,000. A federal jury convicted Kelly in July 2023 on six felony counts, including conspiracy to commit honest services wire fraud, honest services wire fraud, and bank fraud related to a $150,000 loan he fraudulently obtained using falsified documents tied to the bribery scheme. On March 19, 2024, Kelly was sentenced to four years in federal prison, with the court emphasizing his abuse of public authority for personal gain over more than a decade. A March 2024 Public Integrity Review by the City Attorney's Office, prompted by Kelly's conviction, examined three specific SFPUC s he influenced between 2015 and 2019, revealing patterns of no-bid contract awards, improper staff directives to bypass competitive bidding, and expedited processing that favored select contractors. In these cases, Kelly intervened to override protocols, resulting in contracts awarded without required or justification, such as sole-source justifications that lacked substantiation and led to higher costs for ratepayers. The review attributed these abuses to Kelly's "willful corrupt conduct and defiance of rules" rather than systemic control failures, noting no evidence of widespread staff complicity but highlighting vulnerabilities in delegated authority that enabled personal favoritism. A 2024 performance of SFPUC's delegated contracting authority under Chapter 6 of the Administrative Code further documented ongoing risks from similar abuses, including delays in processing that incentivized contractors to seek improper expedites and instances of non-compliance with bidding requirements during Kelly's tenure. These irregularities contributed to inefficient , with the audits estimating potential overpayments and wasted administrative efforts in the low millions across affected contracts, though exact figures varied by . Unlike private utilities, where profit-driven oversight and often enforce stricter compliance—reducing incidents by up to 40% in comparable regulated sectors per federal benchmarks—the SFPUC's public monopoly structure has historically amplified such risks through insulated decision-making. Earlier in the , whistleblower complaints surfaced alleging nepotistic hiring practices and preferential contracting tied to union influences, though federal probes focused primarily on Kelly's direct actions rather than broader institutional patterns. These reports, while not resulting in additional indictments, underscored recurring favoritism in subcontractor selections, contributing to a culture of lax enforcement that audits later confirmed enabled graft over proper competitive processes.

Mismanagement of Infrastructure and Services

The San Francisco Public Utilities Commission's (SFPUC) water infrastructure has faced persistent challenges from deferred maintenance on aging pipes, with approximately 20% of the city's water mains exceeding 100 years in age, contributing to 100-200 breaks annually primarily due to material degradation and external damage. These incidents, such as a September 2023 break that created a sinkhole and disrupted service, underscore systemic underinvestment in proactive replacements, as emergency responses often prioritize short-term fixes over comprehensive renewal. Wastewater operations reveal similar operational shortcomings, including crumbling pipes that necessitate frequent emergency interventions; in the ending June 2024, the SFPUC initiated five such projects for urgent repairs with only a month remaining in the period. Delays in broader upgrades have exacerbated issues, as evidenced by prolonged disputes over sewer sections in neighborhoods like the Excelsior District, where incomplete fixes since at least 2022 have allowed ongoing backups and property damage to persist without resolution. Such patterns reflect a reliance on reactive measures amid a seismically vulnerable, century-old system, where routine and emergency repairs fail to outpace deterioration. Post-storm responses highlight inefficiencies in , with backlash in July 2025 over flood control failures during heavy rains, including inadequate sewer capacity leading to widespread overflows and delayed cleanups. These events contrast with faster recovery timelines observed in privately managed utilities elsewhere, where competitive pressures incentivize preemptive hardening; in SFPUC's framework, bureaucratic and transitions have historically prolonged fixes, as seen in stalled sewer rebuilds tied to administrative changes. Reliability metrics, while not publicly benchmarked against peers, are implicitly strained by these recurring disruptions, fostering resident complaints over service interruptions that private operators mitigate through market-driven efficiencies.

Public Power Expansion Plans and Economic Critiques

The "Our City, Our Power" initiative, promoted by the San Francisco Public Utilities Commission (SFPUC) since at least 2023, aims to acquire Pacific Gas & Electric (PG&E) assets within —including distribution lines, substations, and poles—to enable full municipal retail power delivery and supplant PG&E's role. This expansion builds on existing programs like CleanPowerSF and Power, with proponents projecting enhanced local control, potential rate stabilization, and job growth through expanded public employment. In 2019, the city proposed a $2.5 billion buyout offer to PG&E, which the utility rejected as below , prompting ongoing state appraisals and potential voter bond measures estimated at $3–4 billion, to be repaid via ratepayer revenues. SFPUC advocates claim the could yield millions in savings by eliminating PG&E's returns and accessing lower borrowing costs, alongside creating hundreds of jobs in operations and maintenance. However, independent analyses highlight unquantified risks, including grid modernization expenses, disentanglement from PG&E's regional systems, and assumption of liabilities like wildfire-related claims, which could total tens to hundreds of millions beyond the purchase price. Economic critiques emphasize that sector labor costs in exceed private equivalents by approximately 40%, potentially driving inefficiency without the competitive pressures facing -owned utilities. Critics, including local observers, warn of rate spikes from debt servicing and operational bloat, absent the Public Utilities Commission's oversight that constrains PG&E's expenditures. Reliability could decline under inexperienced municipal management, as evidenced by service disruptions in other transitions, where taxpayer bailouts have offset promised savings—contrasting proponents' job-creation narratives with empirical patterns of fiscal strain in similar municipalizations. For instance, absorbing PG&E's without proportional revenue base expansion risks politicized decision-making, as seen in SFPUC's historical accounting adjustments and cases, prioritizing ideological self-sufficiency over cost-benefit evidence from sustained private-public hybrids.

Environmental Policies and Outcomes

Sustainability Initiatives and Regulatory Compliance

The SFPUC aligns its operations with San Francisco's Climate Action Plan, targeting net-zero citywide by 2040 through resilience measures, including robust conservation programs developed in partnership with regional communities. Specific initiatives encompass systems to meet stormwater management ordinance requirements, utilizing self-cleaning pre-filters for sites with varying conditions to capture and reuse runoff. The agency also conducts ongoing monitoring of per- and polyfluoroalkyl substances (PFAS) in wastewater entering treatment plants, primarily from residential and commercial sources, as part of broader emerging contaminants evaluation not yet regulated under primary standards. In clean energy efforts, CleanPowerSF mandates and delivers 100% renewable electricity to customers, achieving over 95% clean and renewable portfolio composition as of 2024 through procurements like large-scale developments. Complementing this, Power generates and supplies 100% greenhouse gas-free hydroelectric energy from in-state facilities, exceeding California's Renewables Portfolio Standard requirements for compliance periods through the decade via large hydroelectric resources. For regulatory compliance, the SFPUC maintains adherence to the Clean Water Act's National Pollutant Discharge Elimination System permitting for wastewater discharges. On March 4, 2025, the U.S. ruled in City and County of v. EPA that the Act does not authorize the EPA to impose vague "end-result" narrative conditions in permits without specifying compliance pathways, thereby clarifying requirements and affirming San Francisco's position against overly broad EPA directives. This decision supports the SFPUC's operational permits by mandating precise instructions to prevent pollution while avoiding ambiguous federal overreach.

Empirical Assessments of Environmental Claims

The SFPUC's CleanPowerSF program achieved 100% renewable electricity delivery to its default Green service customers in 2023, primarily through hydroelectric power from the system supplemented by credits and long-term contracts for solar and . However, this metric reflects compliance with California's Renewables Portfolio Standard rather than physical zero-emissions generation, as grid imports during periods of low hydro output expose the system to California's broader mix, which included about 12% natural gas-fired generation statewide in 2023. Lifecycle assessments of utility-scale renewables indicate that from manufacturing, transportation, and installation can offset 10-20% of first-year operational savings in CO2 equivalents, particularly for solar projects in the SFPUC's portfolio. San Francisco's retail water use averaged 42.6 gallons per day in FY 2020-21, below the U.S. urban average of around 80-100 gallons but sustained through imported supplies comprising up to 40% of total demand during normal years, undermining claims of fully localized sustainable sourcing. Sustainability programs, including grants and renewable expansions, have imposed rate premiums; for instance, the SuperGreen 100% renewable option adds approximately $0.01 per kWh for residential users, equating to about $3 monthly for typical households, while overall power rate structures reflect procurement costs elevated by RPS mandates. These costs contribute to SFPUC's proposed 10% retail power rate hikes in FY 2025-26, partly to fund battery storage and solar additions, without evidence of commensurate global emissions reductions given the localized scale. Empirical evaluations of drought resilience reveal vulnerabilities despite infrastructure investments; during the 2012-2016 , SFPUC imports from the Sacramento-San Joaquin Delta increased, amplifying ecological trade-offs such as reduced freshwater outflows that heightened intrusion and mortality rates for endangered and populations. The agency's Long-Term Vulnerability Assessment acknowledges reliance on these imports for 85% of supply reliability projections under multi-year dry scenarios, indicating that sustainability claims overstate self-sufficiency while externalizing ecosystem costs to downstream habitats. Cost-benefit analyses of analogous green mandates in utilities show that compliance-driven expenditures yield marginal per-ton CO2 abatement relative to alternatives like nuclear retention, with SFPUC's expansions mirroring these inefficiencies through higher capital outlays for intermittent renewables. In City and County of San Francisco v. Environmental Protection Agency, decided on March 4, 2025, the U.S. ruled 5-4 in favor of , holding that the Clean Water Act does not authorize the EPA to impose "end-result" prohibitions in National Pollutant Discharge Elimination System (NPDES) permits. These provisions had required the city to ensure the receiving water body——met overall quality standards regardless of the direct from its plants, creating compliance uncertainty for the SFPUC-managed system. The decision mandates clearer, enforceable limitations based on or specific water-quality criteria, reducing regulatory vagueness but underscoring prior federal overreach that imposed unpredictable costs estimated in the hundreds of millions for advanced treatments or infrastructure overhauls. Environmental advocacy groups, such as the , criticized the ruling as weakening protections for the Bay ecosystem by shifting accountability away from dischargers like , potentially allowing upstream contaminants to evade scrutiny. In contrast, municipal utilities and ratepayer advocates, including the National Association of Clean Water Agencies, hailed it as a victory for transparent permitting that prevents indefinite litigation and shields local taxpayers from disproportionate burdens of non-attributable . Pre-ruling compliance efforts had already strained SFPUC budgets, with ongoing NPDES renewals tied to costly monitoring and upgrades amid disputes over criteria versus numeric limits. Strict environmental permitting under prior regimes has delayed , contributing to exacerbated in . The city's system, prone to overflows during heavy rains, faces upgrades slowed by multi-year reviews and state environmental impact assessments, as evidenced by public frustrations over repeated inundations in low-lying neighborhoods despite a $6 billion Sewer System Improvement Program initiated in 2012. A 2024 city report highlighted bureaucratic hurdles—including layered federal and state approvals—as impeding adaptation to intensified patterns, leaving aging pipes vulnerable and amplifying flood risks without proven offsetting ecological gains from delays. Regarding per- and polyfluoroalkyl substances (PFAS), SFPUC testing in 2025 detected none in treated from the system, aligning with federal standards despite broader Bay Area concerns over trace detections in untreated sources. While EPA assessments link elevated PFAS exposure to risks like immune suppression and certain cancers based on occupational and contaminated-site studies, low-level environmental detections lack causal evidence of population-level harm in municipal supplies meeting current limits, prompting debates over precautionary regulations that drive monitoring costs without quantified benefits. These dynamics illustrate tensions where environmentalist-driven litigation secures procedural wins but imposes ratepayer-funded compliance—such as SFPUC's $100 million-plus annual investments—that may yield on actual abatement.

Recent Developments and Future Outlook

Major Infrastructure Upgrades (2020s)

The Southeast Water Pollution Control Plant Headworks Facility upgrade in Bayview, completed in September 2025, modernized San Francisco's oldest infrastructure at a cost of $717 million as part of the SFPUC's Sewer System Improvement Program. This project replaced outdated screening, pumping, and grit removal systems built in the , increasing hydraulic capacity to handle peak flows of up to 200 million gallons per day and enhancing treatment efficiency for the city's largest facility, which processes 80% of San Francisco's and . The upgrades incorporate seismic-resistant designs and materials to withstand earthquakes, addressing vulnerabilities in the region's fault-prone geology while reducing overflow risks during heavy rains. Funding for the project and related pipeline replacements drew from $700 million in low-interest bonds issued under the SFPUC's capital financing strategy, supplemented by ratepayer revenues, enabling phased replacements of aging transmission mains to prevent leaks and maintain system pressure. accelerated post-2020 despite pandemic-related disruptions, with the facility achieving operational status ahead of initial timelines through streamlined procurement and oversight adjustments following internal audits. In parallel, the SFPUC advanced wildfire mitigation at its hydroelectric facilities, including the system, via the 2023 and 2025 Wildfire Mitigation Plans, which mandated hardening of over 100 miles of transmission lines connecting remote hydro plants to the urban grid. These upgrades featured covered conductors, automated reclosers, and expanded vegetation clearance buffers to minimize ignition risks from equipment failure, protecting the power generation assets that supply 20% of the city's electricity and indirectly support reliability. Implementation costs remained within budgeted envelopes, averaging 5-10% under projections due to proactive risk modeling, though total expenditures reached $50 million annually across electrical assets. Overall, 2020s capital outlays for these and allied projects totaled over $1.3 billion in the initial biennium alone, with completion rates improving to 85% on schedule post-audits that identified and rectified permitting bottlenecks, contrasting earlier variances where costs exceeded budgets by up to 15% on select wastewater segments due to issues. In March 2025, the U.S. ruled 5-4 in City and County of v. EPA that the does not authorize the Agency to impose vague "end-result" requirements—such as achieving standards without specifying enforceable limits—in National Pollutant Discharge Elimination System permits. This decision, favorable to the SFPUC, overturned Ninth Circuit precedent and mandates clearer, technology-based effluent limitations for the agency's wastewater discharges into , potentially averting billions in unspecified compliance expenditures for upgrades to facilities like the Southeast Control Plant. Post-ruling implementation has involved federal and state regulators revising permit terms to include precise numeric targets, reducing ambiguity in SFPUC obligations while preserving anti-pollution measures under the Act. Sophie Maxwell resigned from the SFPUC Commission in April 2024, departing five years into her term with over a year remaining, as her future plans remained undisclosed amid evaluations of her contributions to agency priorities. Her exit prompted Mayor to nominate Avni Jamdar and Stephen E. Leveroni in October 2024, filling vacancies and shifting the panel's expertise toward water policy and . Under subsequent Mayor , Meghan Thurlow—a climate policy specialist—was appointed in May 2025, introducing dynamics favoring sustainability-focused and potentially influencing votes on regulatory and rate-setting matters. The SFPUC has sustained its Social Impact Partnership program in , voluntarily soliciting commitments from contractors for community investments tied to , with participating firms reporting benefits like workforce training but limited quantitative data on diverse business participation rates. On April 8, 2025, the commission finalized power rate adjustments effective July 1, 2025, imposing a 10% increase (approximately $8 monthly for residential customers) to cover transmission costs while exempting 98% of CleanPowerSF users from hikes, amid scrutiny of long-term affordability pressures.

Projections for Ratepayers and System Reliability

The San Francisco Public Utilities Commission (SFPUC) faces projected annual rate increases of 5-8% for and sewer services through 2035, driven primarily by escalating service obligations, maintenance of aging , and capital expansions for seismic resilience and . These pressures stem from a $6.7 billion reserve deficit and negative flows, exacerbated by high bond indebtedness that consumes a significant portion of operating budgets, with rates forecasted to approximately double over the next to fund sewer rebuilds and dam upgrades. Power rates, including those under and CleanPowerSF expansions, are anticipated to rise by around 10% in 2025-26, with similar multi-year trajectories tied to renewable integration and wholesale supply costs. Critics argue these hikes, averaging three times the rate of , reflect inefficiencies in public management rather than unavoidable necessities, potentially burdening ratepayers amid stagnant and economic headwinds. System reliability projections highlight vulnerabilities from seismic events and variability, with the SFPUC's Regional Water System at risk of multi-year disruptions from earthquakes damaging aging pipelines and reservoirs, despite ongoing retrofit investments. models in the Long-Term indicate heightened frequency and altered precipitation patterns could strain supply reliability by 2040, necessitating adaptive like expanded storage but adding to without guaranteed mitigation of outages. Public power growth, including pursuits of full municipalization and renewable scaling, introduces scenarios where costs inflate due to debt-financed buyouts—estimated at $2.5 billion or more—and risks, potentially leading to higher volatility in rates and service interruptions without private-sector efficiencies. Optimistic SFPUC outlooks emphasize green transitions yielding long-term savings through $120 million in annual customer reductions from public power efficiencies and climate-resilient upgrades, positioning the utility for sustainable reliability. However, independent analyses warn of potential service declines absent structural reforms, such as competitive contracting or elements, given historical inefficiencies and persistent financial strains that could amplify ratepayer burdens during seismic or climatic shocks. Bond rating agencies like Fitch underscore the need for sustained rate hikes to maintain investment-grade status, implying reliability trade-offs if fiscal discipline falters.

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