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Solar Power Wins Big in San Francisco by Andrew Quinn Reuters - November 7, 2001

SAN FRANCISCO, Nov 7 (Reuters) - In a major overhaul of their power system, San Francisco voters have approved a $100 million bond to fund the nation's biggest solar power project in one of the country's most famously foggy cities.

A separate initiative to establish a new public agency to take over the functions of embattled utility Pacific Gas & Electric appeared headed for victory by a narrow 51-to-49 percent margin -- although several thousand absentee ballots yet to be counted Wednesday could still tip the decision.

The measures follow a year of turmoil in California as the state's botched energy deregulation scheme unexpectedly resulted in rocketing wholesale and retail power costs, utility bankruptcy and rolling blackouts.

The main solar power initiative -- which had widespread popular and political backing in this traditionally liberal city -- won by a landslide 73-to-26 percent margin.

Under its provisions, the city will move ahead with plans to issue a $100 million revenue bond to install 10 megawatts of solar and 30 megawatts of wind power generation on city property, moves which should supply about one quarter of all the power consumed by city government.

A second solar initiative, passed by a somewhat narrower margin, allows the city's Board of Supervisors to issue more solar revenue bonds without seeking voter approval, allowing the city government gradually to expand the solar power program to individual houses and businesses.

Tuesday's landslide vote does not mean construction will begin tomorrow.

Under the structure of the revenue bond, final approval for the project will come from bond investors who will decide whether or not the plan is economically feasible.

But officials are optimistic that within four years San Francisco will have 10 megawatts of solar power in place -- eclipsing Sacramento, California, as the largest single solar power producer in the country.

The city's solar power plan has been hailed as a big step forward for the solar power industry because it will establish a steady and growing market for photovoltaic cells -- creating the economies of scale that will allow producers to ramp up production and bring the cost down.

"We have just created an enormous market for solar energy in the United States," said Danny Kennedy, local campaign coordinator for the environmental group Greenpeace, which mobilized behind the solar power initiative.

"What we need, the market transformation for a massive growth in solar demand and solar production, will come about due to incremental steps like this. If other cities follow San Francisco model we can bring the price down sharply."

PUBLIC POWER MAY GET QUALIFIED OK

On another closely watched initiative, however, voters were more evenly split -- although they appeared to give qualified approval to moves to set up a new public power agency to take over from bankrupt utility Pacific Gas & Electric.

Voters backed Proposition F, which calls for San Francisco to establish a Municipal Water and Power Agency, by 56,008 to 53,760 votes. But with several thousand absentee ballots yet to be counted, opponents of the measure said there was still a chance it could go down in defeat.

A separate initiative, which would have set up a Municipal Utility District (MUD) in San Francisco and neighboring Brisbane, was trailing by a similarly narrow margin.

Public power advocates, which include consumer groups and environmentalists, said Prop. F would effectively set San Francisco on track to take over management of the generation, distribution and purchase of power in the city -- roles played by PG&E until now.

"It means public power in San Francisco," said Ross Mirkarimi, campaign manager for both proposals. "San Francisco makes history by telling the corporate world of PG&E you can't continue to abuse San Francisco ratepayers any longer."

Pacific Gas & Electric, forced into bankruptcy in April after amassing billions of dollars in debt during California's power crisis, fought hard against the public power initiatives, spending more than $1 million in an effort to persuade city voters that it was still best positioned to serve as San Francisco's power provider.