OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
MEM
ORANDUM
DATE:
TO:
August 26, 2022
Commissioner Anson Moran, President
Commissioner Newsha Ajami, Vice President
Commissioner Sophie Maxwell
Commissioner Tim Paulson
THROU
GH: Dennis J. Herrera, General Manager
Barbara Hale, Assistant General Manager, Power
Ramon Abueg, Deputy Assistant General Manager, Power
FROM: S
uni Jones, Acting Director, Wholesale and Retail Services, Power
RE: Franc
hise Compliance Reports for Audit Period CY 2019-2020
_____________________________________________________
Pleas
e find the attached copies of the biennial Franchise Compliance Reports for the audit period of CY 2019-2020 submitted to the Board of Supervisors per San Francisco Administrative Code Chapter 11, Article V, Section 11.44(b).
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
August 26, 2022
Angela Calvillo, Clerk of the Board of Supervisors
City Hall, Room 244
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102
Dear Ms. Calvillo,
In accordance with San Francisco Administrative Code Chapter 11, Article V, Section 11.44(b), the San Francisco Public Utilities Commission (SFPUC) files this report with the Board of Supervisors regarding Pacific Gas & Electric Company’s (PG&E) compliance with provisions of Chapter 11 of the San Francisco Administrative Code and the 1939 Franchise Agreement s between PG&E and San Francisco (Franchise) for the audit period of calendar year (CY) 2019-2020. This report does not discuss those items already addressed by the Controller’s Report.
1 To the SFPUC's knowledge, there has been no change in ownership of PG&E’s Franchise. The Department has not received any formal complaints under San Francisco Administrative Code Chapter 11, Article VIII, Section 11.74 alleging a violation of the Franchise from any San Francisco resident or business.
The City continues to have disputes with PG&E concerning its obligations under Section 7 of the Franchise. Among other things, Section 7 requires PG&E to “remove or relocate without any expenses to city any facilities installed, used and maintained under the franchise hereby granted, if and when made necessary by any work to be performed under the governmental authority of the city.”
Despite this clear language, the City and PG&E often dispute PG&E’s obligation to remove or relocate its facilities. While some of t hese disputes are resolved informally, at times the City has had to commence litigation against PG&E to enforce its rights under the Franchise. The SFPUC is currently aware of the following Franchise disputes with PG&E that have not been resolved.
1 This report also does not address the disputes that the City has with PG&E regarding connection to the PG&E grid. Those disputes are reported pursuant to the Resolution 227-18 reporting requirements.
Ongoing 2015-2016 Disputes
i. The City has a dispute with PG&E over certain Golden Triangle historic streetlight poles in the Union Square area that PG&E removed for safety reasons. Some of those poles had included the City’s traffic signal attachments for many years . SFMTA installed temporary traffic signal poles while the historic poles were being replaced. PG&E subsequently reinstalled some of the historic poles without notifying SFMTA, which hindered SFMTA’s efforts to devise a permanent solution for those traffic signals. PG&E claimed that SFMTA could not reinstall the traffic signals on the historic poles, because they would cause or contribute to the instability of the poles. PG&E’s placement of the histori c poles it reinstalled has prevented SFMTA from installing new permanent traffic signal poles at the corners where they belong. Accordingly, SFMTA demanded PG&E take action to alleviate the situation. PG&E initially proposed three options for the streetlights at issue, none of which SFMTA found to be acceptable.
In 2018, PG&E identified additional historic streetlight poles that were removed, or were in the process of being removed, for public safety reasons. In a letter dated August 24, 2018, PG&E indicated that it would work with SFMTA staff to remove the streetlight poles with traffic signal attachments and to insta ll temporary traffic controls. PG&E also proposed certain permanent solutions to the dispute for these poles.
In April 2019 , PG&E submitted a request to California Public Utilities Commission (CPUC) for permission to “grandfather” signal installations on historic poles, which request the CPUC approved. Despite the CPUC’s approval, PG&E has taken no action towards allowing the “grandfathered” signal installations to be restored. SFMTA cannot restore the traffic signals until PG&E modifies the historic poles to allow for their installation. PG&E had indicated that funding to proceed with that work was unavailable due to its bankruptcy filing. Even though PG&E emerged from bankruptcy July 1, 2020, PG&E continues to assert it does have sufficient funding to meet all of its obligations. For this and possibly other reasons, the “grandfathered” signal installations have not been restored.
Since the last CY 2017-2018 audit in 2020, there has been no activity on this dispute, as action by PG&E is still needed for resolution.
ii. The Gas Pipeline Cross Bore Agreement between PG&E and the City was signed in 2014 and amended in 2016 to address situations where PG&E bored through the City’s sewer system while installing gas pipes.
This Agreement established inspection and repair protocols for cross bore conflicts. While PG&E has been working in good faith to complete the entire cross bore remediation program, its current proposed schedule indicates that it will not be completed until 2023.
Ongoing 2017-2021 Disputes
iii. There were three third-party agreement disputes between three separate contractors and PG&E resulting from PG&E’s failure to pay invoices for work undertaken by those contractors to satisfy PG&E’s franchise obligation: (1) Precision Engineering, Inc. for contract work in 2014, 2015, 2017, 2018, and 2019; (2) J. Flores Construction Company, Inc. for contract work in 2017 and 2018; and (3) M Squared Construction, Inc. for extra contract work needed to work around existing PG&E facilities at the 2797J Bayview Transportation Improvement Project site on Evans Avenue. J. Flores Construction filed a proof of claim in the Bankruptcy for $43,488 in January 2019. Precision Engineering filed a proof of claim in August 2019 for $743,651. M Squared is seeking reimbursement from the City in the amount of $22,078 for the extra project work, however the City has instructed M Squared to seek reimbursement from PG&E, which was completed before the bankruptcy pre-petition date of January 29th, 2019.
Since the CY 2017-2018 audit in 2020, PG&E has settled bankruptcy claims filed by Precision Engineering, and J. Flores Construction Company. However, M Squared’s filed claim has still not been resolved.
iv. PG&E has an underground streetlight conduit conflicting with the installation of a sand interceptor at 17
th and Folsom Streets. In late 2017,
the City requested that PG&E relocate the streetlight conduit. In February 2018, PG&E claimed it did not own the conduit . The City followed up several times with documentation showing PG&E’s ownership of the conduit. PG&E finally confirmed in May 2018 that it owned that condui t and would work with the City to relocate it.
Despite acknowledging its responsibility to do so in 2018, PG&E has failed to remove or relocate the streetlight underground conduit. After leaving a hole in the sidewalk for an extended period of time, the City’s project team chose to close the hole and take possession of the sand trap in order to close out the construction contract. Because the sand trap has not been installed, the Department of Building Inspection has not yet signed off on the project.
Since the CY 2017-2018 audit in 2020, there has been no recent activity on this dispute, as action by PG&E is still needed for resolution.
v. The City had a dispute with PG&E regarding the 33 Stanyan Pole Replacement and Overhead Reconstruc tion Project along 18 th Street
between Mission Street and Market Street.
SFMTA was upgrading the overhead catenary system along 18 th Street
to meet current code requirements. The new two feet higher lines conflicted with existing PG&E’s residential service lines. The City requested that PG&E relocate these service lines in April 2017. Due to PG&E’s inaction, t he City incurred substantial costs related to delay claims from the contractor in addition to City administrative costs. PG&E eventually hired a contractor to do the work, but that work was delayed while PG&E waited for delivery of the hardware it had procured so it could
attach its support lines to the MUNI poles. PG&E failed to complete this work before October 2018, further delaying the City’s work and causing the City to incur additional costs. SFMTA notified PG&E that the City intends to seek to recover from PG&E all costs the City incurred because of these delays.
PG&E finally completed the requested relocation of the service drops in March 2019. Project work was completed in August 2019. SFMTA has completed a contract modification to compensate the contractor for the delays in the amount of $773,000. SFMTA staff and administrative costs related to the delay added approximately $160,000 to delay impacts.
Another SFMTA related claim from the project involved the removal of an old pole and installation of a new adjacent pole at the intersection of 18th Street and Danvers Street. During excavation for the new pole, the SFMTA’s contractor encountered a PG&E gas line duct bank. PG&E informed the SFMTA that the PG&E gas line duct bank could not be relocated.
In order to resolve the conflict, the project installed a pole at the adjacent location on Danvers Street and Market Street to temporarily support the overhead lines in place, and installed the new pole in the same location as the old pole. The cost for this work-around field change was $190,000, including $158,000 in contractor costs and $32,000 in SFMTA staff and administrative costs. The total cost impact for both of these disputes was approximately $1,123,000.
As of June 22 , 2022, there is no longer a conflict with PG&E requiring relocation work , as all project work has been completed by the City .
However, the City still has a franchise dispute with PG&E, because the City is still seeking payment from PG&E for the completed work with costs totaling approximately $1,123,000.
vi. The City has had an ongoing dispute with PG&E related to PG&E's poles located on Evans Avenue and Toland Street that impeded the construction of a new Traffic Company and Forensic Services Division (TCFSD) facility for the Police Department at 1955 Evans Avenue. The City asked PG&E to relocate the poles due to the proximity of the poles to construction activities and the location of the poles in the new sidewalks to be installed at the conclusion of construction.
On July 22, 2019 the City requested that PG&E relocate its overhead electric distribution line and gas distribution main that the City identified as being in physical conflict with the hostile vehicle mitig ation barrier (HVM Barrier) to be installed in the public right of way along Evans and Toland Streets in connection with the TCFSD. PG&E acknowledged that the HVM Barrier conflicted with the electric line and gas main along Toland. PG&E informed the City that PG&E would relocate the electric pole line to a new location that would not conflict with the HVM Barrier.
On May 16, 2020, the City notified PG&E that segments of the existing gas pipelines in the area also conflicted with TCFSD construction, and therefore needed to be removed by PG&E. PG&E claimed that removal of the already deactivated gas pipelines should be covered by the
Support Work Around and Protection Plan (SWAPP) agreement, which would make the City responsible for the cost. However, the City disagreed with PG&E, because PG&E did not follow the process required by the SWAPP agreement when the City issued the Notice of Intent.
The building at 1995 Evans has since been completed, however the capped pipe was never moved. All franchise disputes related to that project have been resolved, and the City does not intend to make any claims against PG&E for franchise violations related to the project.
vii. In 2018, SFMTA learned that two PG&E guy wires conflict ed with its traffic signal improvements at 1) 26th Street and South Van Ness Avenue and 2) Mariposa Street and Pennsylvania Avenue. Because of PG&E’s unresponsiveness, SFMTA revised its project designs for 26th Street and South Van Ness Ave and for Mariposa Street and Pennsylvania Avenue to allow the subject guy wires to remain in place. The project at 26th Street and South Van Ness Avenue was completed November 22, 2021.
The project at Mariposa Street and Pennsylvania Avenue was completed on December 23, 2021. The City considers both conflicts resolved.
In 2018 and 2019, SFPUC discovered two additional guy wire conflicts with its construction of the Southeast Water Treatment Plant. One of the guy wires was located at Rankin Street and Evans Avenue and the other one at Phelps Street and Jerrold Avenue. Due to PG&E’s unresponsiveness, the City redesigned its project to avoid both guy wire conflicts and the City considers issue resolved for both conflicts.
viii. As we previously reported, t here were m any aboveground and belowground PG&E utility facilities conflicting with the SFPUC’s construction of its new biosolids digester facilities at Jerrold Avenue and Quint Street. SFPUC notified PG&E in July 2018 that PG&E needed to relocate several of these facilities and met with PG&E in September 2018 to discuss the matter . While PG&E had not agreed to the relocation, PG&E was working with the project team to resolve any conflicts at that time. However, due to changes in the scope of the project (for reasons unrelated to the conflicts) there are no PG&E utility conflicts at this time.
As the project progresses, the City will continue to update PG&E of any potential conflict. Since the CY 2017-2018 audit in 2020, there has been no activity on this dispute.
ix. The SFMTA still has a dispute with PG&E regarding certain historic Golden Triangle streetlight poles that PG&E removed at the City’s request to accommodate construction of the Union Street Station as part of the Central Subway Project. In 2014, the SFMTA paid PG&E to remove, st ore, and re -install eleven historic streetlights prior to construction. The SFMTA ultimately required PG&E to remove only six of the streetlights. Since February 1, 2018, the City has been asking PG&E to schedule the re- installation of the six removed streetlights.
PG&E insists that the City must pay for the design and installation of new foundations for the streetlights. The SFMTA believes that PG&E is responsible for design and costs amounting to $451,459.65 required for the new foundations and reinstallations of the six removed streetlights under both the Franchise and the parties’ prior settlement agreement.
In November 2021, the City was still disputing the scope and costs of the work with PG&E. PG&E had said it would revisit the cost and get back to the City , but never did. The historic streetlights still have not been restored to Union Square.
New 2022 Dispute
x. The SFPUC has a dispute with PG&E that began in January 2022 regarding project work at 2800 Great Highway – Westside Pump Station.
The general contrac tor hired by SFPUC to perform this infrastructure improvement work for the City, Anvil Builders, made a request to PG&E regarding (Ref#: 122558066) the relocation of the existing PG&E facilities at 2800 Great Highway to allow for new SFPUC infrastructure . In correspondence between PG&E & Anvil Builders, PG&E state that this is a request for service under PG&E’s Wholesale Distribution Tariff and not a Franchise dispute. The SFPUC disputes PG&E’s claim and believes this relocation service should be covered by the Franchise Agreement per Section 7 (d). To expedite the relocation process, SFPUC has agreed to have Anvil Builders perform the work . SFPUC will track labor and material costs for the future potential reimbursement by PG&E. Any delay costs associated with the relocation work will also be tracked by the SFPUC for the potential reimbursement by PG&E.
The SFPUC will continue to focus on enhancing its outreach to other City departments to identify all issues of non-compliance by PG&E, with the objective of mitigating unnecessary costs to the City and ensuring PG&E is complying with all of its obligations under the Franchise.
Sincerely,
Suni Jones
Acting Director, Wholesale and Retail Services
Power Enterprise
cc: Honorable Members, San Francisco Board of Supervisors Honorable Members, San Francisco Public Utilities Commission Dennis Herrera, General Manager, San Francisco Public Utilities Commission
Barbara Hale, Assistant General Manager, Power, San Francisco Public Utilities Commission
Nancy Hom, Chief Financial Officer & Assistant General Manager of Business Services, San Francisco Public Utilities Commission Ramon Abueg, Deputy Assistant General Manager, Power Operations, San Francisco Public Utilities Commission
Mark de la Rosa, Acting Director of Audits, Office of the Controller Catherine Brady, Sjoberg Evashenk Consulting
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
August 26, 2022
Angela Calvillo, Clerk of the Board of Supervisors
City Hall, Room 244
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102
Dear Ms. Calvillo,
In accordance with San Francisco Administrative Code Chapter 11, Article V, Section 11.44(b), the San Francisco Public Utilities Commission (SFPUC) files this report for the audit period of calendar year 2019-2020 with the Board of Supervisors regarding Clearway Energy Group (formerly NRG Energy Center San Francisco LLC’s) compliance with all provisions of Chapter 11 and the Clearway Energy Group Franchise, except those addressed by the Controller's Report.
To the SFPUC's knowledge, there has been no change in ownership of Clearway Energy Group 's Franchise . The Department has not received any formal complaints under San Francisco Administrative Code Chapter 11, Article VIII, Section 11.74 alleging a violation of the Franchise from any San Francisco residents or businesses.
Sincerely,
Suni Jones,
Acting Director, Wholesale and Retail Services
San Francisco Public Utilities Commission
cc: Honorable Members, San Francisco Board of Supervisors Honorable Members, San Francisco Public Utilities Commission Dennis Herrera, General Manager, San Francisco Public Utilities Commission
Barbara Hale, Assistant General Manager, Power, San Francisco Public Utilities Commission
Nancy Hom, Chief Financial Officer & As sistant General Manager of Business Services, San Francisco Public Utilities Commission Ramon Abueg, Deputy Assistant General Manager, Power Operations, San Francisco Public Utilities Commission
Mark de la Rosa, Acting Director of Audits, Office of the Controller Catherine Brady, Sjoberg Evashenk Consulting