Filing Includes $8.6 Billion in Business Severance Damages and Physical Separation Costs that the City's Valuation Does Not Yet Address

OAKLAND, Calif., Oct. 21, 2026 /PRNewswire/ -- Pacific Gas and Electric Company (PG&E) on Tuesday responded to the City and County of San Francisco's (CCSF) petition asking the California Public Utilities Commission (CPUC) to determine the value of PG&E's electric distribution grid in San Francisco.

PG&E's filing details that the CPUC-required costs of a CCSF takeover would be $22.5 billion.

CCSF's April 2026 filing estimated only the fair-market value of the grid's assets. PG&E's filing includes both the fair-market value of the grid's assets and the costs CCSF would have to pay PG&E and its remaining customers as part of its proposed takeover:

• Physical separation of the San Francisco grid from PG&E's larger, integrated grid
• Lost revenue for statewide energy programs that a CCSF utility would shift to customers outside of San Francisco

"A government takeover of our grid is not the right solution for our San Francisco customers," said PG&E Corporation CEO Patti Poppe. "We have decades of specialized expertise operating San Francisco's complex electric system. And now our filing shows that a takeover doesn't make financial sense for customers."

PG&E's filing outlines a fair-market value of approximately $13.9 billion for its electric and real property assets in San Francisco, compared to the $3.4 billion that CCSF cited in April. However, PG&E's valuation also includes $7.6 billion in damages for business severance and $1 billion in damages for physical separation.

An accurate accounting of the cost of a government takeover of PG&E's San Francisco electric distribution grid is essential to understanding how it would affect San Franciscans. Dividing PG&E's total burden of a takeover across the 420,000 electric accounts in San Francisco would equal about $53,000 per account. That is not a forecast of a specific customer bill or charge. However, it's clear that a takeover would burden San Franciscans with significant debt for decades to come.

CCSF significantly undervalues PG&E's assets

The CPUC already has ruled that CCSF will have to pay "the highest value" that a hypothetical buyer might pay for the assets, and PG&E's analysis finds that CCSF's April offer for the company's assets is well below fair-market value.

CCSF's April filing suggested a total value of just $3.4 billion for PG&E's San Francisco grid.

But CCSF's filing assigned zero value on PG&E's more than 2,000 real estate interests that include easements and licenses throughout the city.

CCSF also dramatically undervalued PG&E's underground distribution system in San Francisco, failing to account for higher construction costs, the challenges associated with working around existing infrastructure, and unique permitting and specialized installation practices specific to San Francisco.

Severance damages would constitute $8.6 billion in takeover costs

Severance damages fall into two categories: Costs to physically separate PG&E's electric system within San Francisco from the company's larger grid, and costs to ensure that a government takeover would not financially harm PG&E's remaining customers.

CCSF's takeover proposal includes taking PG&E's Martin Substation in Daly City, plus transmission and distribution facilities, real estate, telecommunications assets and other infrastructure that supports service to customers outside San Francisco.

After physically severing assets, any separation plan would have to physically restore safe and reliable service to PG&E's remaining customers, including:

• Building a new PG&E substation, likely in San Mateo County, to replace the Martin Substation
• Building a new service center to maintain gas and electric operations for PG&E's remaining Bay Area customers
• Reconfiguring or building power lines to restore service to PG&E customers outside of San Francisco, particularly in San Mateo County

This work would require new costs, permitting and extensive outage management to reduce its effects on customers.

CCSF would also have to pay business severance damages to prevent cost shifts for state-mandated programs onto remaining PG&E customers. Business severance damages reflect set costs that fewer customers would pay following a takeover, increasing the costs on customers outside of San Francisco. Those statewide programs include:

• Wildfire risk reduction
• Low income-qualified assistance
• Energy efficiency initiatives

Neither PG&E's analysis nor CCSF's valuation includes hundreds of millions of dollars in startup costs that CCSF would incur to establish a city-run electric company, including hiring a highly skilled workforce. Nor does either valuation consider the PG&E-generated revenue that CCSF would forego, including tax and franchise fee payments of approximately $100 million a year, that help pay for public services including fire and police protection.

Improving reliability, making investments

To put CCSF's takeover bid in further context, over the past decade PG&E has spent $3 billion on reliability upgrades—nearly the total amount CCSF proposes to pay for PG&E's San Francisco distribution grid—and the company plans to invest nearly $2 billion more in the next five years.

PG&E is investing $370 million in reliability and substation resilience improvements in San Francisco in 2026—16% more than in 2025. The work the company plans to complete this year includes 23 reliability projects, upgrading 10,000 feet of underground cable, and installing 50 isolation and switching devices to reroute power during outages.

To further improve upon this reliability progress and modernize the grid, the company over the next several years will spend $75 million in the Richmond district and $60 million in the Sunset neighborhood to convert circuits to higher capacity. In Bayshore and Hunters Point, PG&E is investing $600 million to rebuild its substation and circuits and is improving overhead power lines.

"My coworkers and I love serving San Francisco. San Francisco's expectations are high, and we intend to measure up," Poppe said. "We have 600 people who serve you every day and if San Francisco were to take over PG&E's assets, those people would leave the city and go work on other parts of our system. It saddens me to imagine a day when a whole convoy of blue and white trucks drives across the Bay Bridge heading to Oakland, never to come back. I don't think that's in San Francisco's best interest."

About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), is a combined natural gas and electric utility serving more than 16 million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news.

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SOURCE Pacific Gas and Electric Company