PG&E values San Francisco grid takeover at $22.5 billion

Pacific Gas and Electric Company (NYSE: PCG) has filed testimony with the California Public Utilities Commission (CPUC) estimating that a takeover of its San Francisco electric distribution grid by the City and County of San Francisco (CCSF) would cost $22.5 billion.

The filing contrasts sharply with CCSF's April 2026 estimate of $3.4 billion, which PG&E says covered only fair-market value of grid assets. PG&E places the fair-market value of its electric and real property assets in San Francisco at approximately $13.9 billion, citing CCSF's failure to assign any value to more than 2,000 real estate interests, including easements and licenses, and what it describes as a significant undervaluation of the underground distribution system.

PG&E's filing adds $8.6 billion in severance damages, comprising $7.6 billion in business severance costs and $1 billion for physical separation of the San Francisco grid from PG&E's broader network. These costs include building a replacement substation in San Mateo County, constructing a new Bay Area service center, and reconfiguring power lines.

The company notes that neither its valuation nor CCSF's accounts for hundreds of millions in startup costs a city-run utility would face, or the roughly $100 million in annual tax and franchise fee payments PG&E currently makes to the city.

Divided across 420,000 electric accounts in San Francisco, PG&E calculates the total burden at approximately $53,000 per account, though it stated this figure is not a forecast of any specific customer charge.

"A government takeover of our grid is not the right solution for our San Francisco customers," said PG&E Corporation CEO Patti Poppe. "Our filing shows that a takeover doesn't make financial sense for customers."

PG&E said it has spent $3 billion on reliability upgrades in San Francisco over the past decade and plans to invest nearly $2 billion more over the next five years, including $370 million in 2026 alone.

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