San Francisco raises PG&E takeover offer to $3.4 billion

A fire at PG&E’s Mission substation on 8th and Mission cut power across San Francisco and left some customers dark for days, a reminder of what is at stake in the city’s long push to buy the utility’s electric system. City officials have now raised their takeover offer to $3.4 billion, a figure they say better reflects the land, rights and equipment needed to run public power in San Francisco and parts of San Mateo County.

The new valuation is nearly $1 billion higher than the city’s earlier estimate and comes after San Francisco twice offered PG&E $2.5 billion starting in 2019, both times arguing the price was fair and both times hearing no. The revised filing includes assets the earlier offers left out, including the Martin substation, which feeds most of the city’s power, 67 miles of underground transmission lines, more than 1,000 miles of underground distribution lines and 480 miles of overhead distribution lines.

The city first filed its valuation petition with the California Public Utilities Commission on July 27, 2021, setting in motion a case to determine just compensation under state law. The CPUC later issued Decision 25-10-039 on Oct. 30, 2025, establishing the methods and standards for valuation. San Francisco’s March 2025 environmental notice also made clear what a takeover would require: physically separating PG&E’s system into two independently operated systems, generally along the San Francisco and San Mateo county line. The proposal would buy PG&E’s electric transmission and distribution assets in both counties, but not the company’s natural gas facilities.

PG&E rejected the revised offer on April 22, saying its electric assets were not for sale and that the city was still undervaluing the property by billions of dollars. The utility said the figure left out separation costs, restoration costs for remaining PG&E customers, state-mandated program costs and possibly a new substation for customers in San Mateo County. PG&E also said a takeover would raise San Franciscans’ electric rates for decades, even as the company pointed to electric-rate reductions for some customers since early 2024.

The fight has gained urgency because the blackout was not an isolated event. PG&E said full power was restored by 4:31 a.m. Tuesday after the December outage, with about 3,800 customers still out at the end. Earlier reporting put the peak number affected at about 130,000, and the same substation also caught fire in 2003. Public-power advocates say San Francisco already relies heavily on city-run electricity through Hetch Hetchy Power and CleanPowerSF, which together supply more than 75% of local demand. State Sen. Scott Wiener has also advanced SB 875 to ease legal hurdles for public acquisition, underscoring that the city’s latest price tag is not just a bigger number. It is a test of whether San Francisco’s century-old public-power ambition is finally becoming realistic, or simply more expensive.