![\"A](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/10\/1792574784_884_-S3840x2560-FPNG.png\"\/)
Patti Poppe, CEO of PG&E. | Source: Photo by Ilya S. Savenok\/Getty Images for GE<\/p>\n
The biggest cost difference between the city\u2019s and PG&E\u2019s estimates is the \u201cfair market valuation\u201d of their grid assets. The city claimed in April that the infrastructure is worth roughly $3.4 billion, while PG&E claims that its value is around $13.9 billion.<\/p>\n
To justify a price roughly four times the city\u2019s estimate, PG&E argued that San Francisco assigned no value to more than 2,000 easements, licenses, and other land-use rights, a choice PG&E said shaved more than $1.7 billion off the city\u2019s valuation.<\/p>\n
PG&E also argued that San Francisco lowballed the cost of rebuilding its underground electrical infrastructure, putting it at roughly a quarter of what the work actually costs. That matters because estimating the grid\u2019s valuation is based partly on how expensive it would be to rebuild.\u00a0<\/p>\n
The city estimated that installing an underground conduit, the protective piping that contains power cables, would cost about $247 per foot. PG&E claims comparable projects have cost nearly $1,000 per foot.<\/p>\n
Lastly, PG&E said San Francisco didn\u2019t account for the possibility of other government entities, such as the state of California, offering a higher price, something the utility claims the city must do when calculating its own bid.<\/p>\n
The arguments were scattered across 10 chapters of testimony from 22 witnesses, a nearly 400-page real estate appraisal of the company\u2019s land and easements, an asset-by-asset depreciation study, and a grid-separation engineering report.<\/p>\n
\u201cSan Francisco\u2019s current proposal rests on an unrealistically low valuation of PG&E\u2019s Assets,\u201d the filing said.<\/p>\n
PG&E claims a city takeover would incur $8.6 billion in damages, including from physically separating San Francisco\u2019s grid from the utility\u2019s larger network and eliminating a pool of 400,000 customers that pay into its statewide efforts for grid safety and reliability, as well as wildfire mitigation.<\/p>\n
Some $7.6 billion of that amount falls into the latter category of damages, dubbed \u201cbusiness severance\u201d by PG&E. The utility said it\u2019s required to keep rates roughly equal for customers across its service area, both for urban and rural customers, meaning densely populated areas like San Francisco help subsidize rates elsewhere.\u00a0<\/p>\n
Costs for programs like PG&E\u2019s grid reliability and wildfire mitigation are relatively fixed, even if the company stops serving San Francisco. Therefore, it argues, the city should pay the utility to account for that cost.<\/p>\n
The remaining $1 billion comes from physically separating the systems. The city\u2019s proposal includes PG&E\u2019s Martin Substation in Daly City, which also provides power for customers outside San Francisco. PG&E says the city would foot the bill for a new substation \u2014 likely in San Mateo County \u2014 to replace it, along with a new service center, and reconfigured power lines to serve demand in the Peninsula.<\/p>\n
\u201cSeparating the subject assets in and serving electric customers in San Francisco is tantamount to carving a hole in the middle of PG&E\u2019s integrated grid,\u201d PG&E president Carla Peterman wrote in the filing.<\/p>\n
Poppe added in a statement that a takeover could reassign up to 600 workers, who would be sent to work on other parts of PG&E\u2019s grid.<\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/10\/1792574785_361_-S3840x2562-FPNG.png\"\/)
Pacific Gas & Electric crews walk around the substation building at 8th and Mission streets in San Francisco. | Source: Jessica Christian\/SF Chronicle\/AP<\/p>\n
Calls for San Francisco to take over PG&E\u2019s grid were reignited after a Dec. 20 power outage left one-third of the city without power, with many residents left in the dark for days. Since then, there have been 40 smaller outages<\/a>.<\/p>\n Any takeover would have to be approved by the CPUC, the regulator that oversees the legal process of eminent domain \u2014 the government\u2019s mechanism to force the sale of private property for public use.<\/p>\n Using eminent domain in San Francisco requires approval from at least two-thirds of the Board of Supervisors, which would have to vote in favor of authorizing the action. If a purchase agreement cannot be reached with PG&E, then the city would have to file a lawsuit to establish its justification.<\/p>\n To force a sale, the city would have to prove the necessity of such an action in court and pay PG&E fair market value for its assets and loss of business. The property owner can contest or dispute any findings made by the city in the trial.<\/p>\n