1898: The private Spring Valley Water Co. has gained monopoly
control of water service in San Francisco, but the limited rainfall
runoff that feeds its tiny reservoir system can't possibly keep pace
with the needs of a growing city. After crossing off 15 alternative
sites, Mayor Phelan files in April 1902 for water rights on the Tuolumne
River with money from his own pocket. City engineer Grunsky devises
a plan to dam Hetch Hetchy Valley in Yosemite National Park and
pump the water 200 miles to San Francisco. Although there were better
sites for water, Hetch Hetchy Valley, a granite-walled canyon formed
like a mammoth water tank, rising 2,500 feet above a flat meadow floor,
was chosen because of its enormous potential to produce cheap electrical
power. For the next decade, four different Interior secretaries seesaw
back and forth on S.F. demands to use Hetch Hetchy Valley as
a city reservoir.
April 18, 1906: A massive earthquake sets off a series of devastating
fires that burn out of control. Firefighters are paralyzed when Spring
Valley's cheaply built private water mains prove inadequate and
critical hydrants go dry. Pressure mounts for a publicly owned water-distribution
1912: With Spring Valley's private water rates continuing
to rise, and service as poor as ever, city officials press Congress
to give San Francisco a radical and unprecedented federal grant: the
right to construct a municipal water dam inside a national park. John
Muir is furious, and rages: "Dam Hetch Hetchy? As well dam for
water tanks the people's cathedrals and churches; for no holier temple
has ever been consecrated to the heart of man." He has founded
the Sierra Club to fight the proposal, and congressional preservationists
line up against it.
1913: Rep. John Edward Raker from the state's third district,
which includes Yosemite, breaks the impasse with a historic compromise.
The Raker Act (HR-7207) would allow San Francisco to build
its dam - but only on one condition: The dam must be used not only
to store water but also to generate electric power, which must be
sold directly to the citizens through a municipal power agency at
the cheapest possible rates.
The Raker Act includes language requiring formally that San Francisco
accept the grant, with all its conditions, before breaking ground
on the dam. It states that if the city fails to live up to those conditions,
the grant reverts to the federal government. The Board of Supervisors
passes a resolution agreeing to abide by the terms of the law.
1923: Under the leadership of the brilliant engineer M.M. O'Shaughnessy,
San Francisco builds a tremendous dam on the Tuolumne and an innovative,
gravity-fed system of underground pipes that can carry the fresh mountain
water under the Central Valley, the East Bay hills, and the Bay, and
into the city's reservoirs. The Spring Valley franchise is revoked.
City workers begin repairing old mains, laying new ones, and creating
a municipal water department.
The city also builds a hydroelectric powerhouse at Moccasin Creek,
where Hetch Hetchy water is diverted through giant turbine
generators, and buys enough copper transmission wire to stretch from
the Sierra to San Francisco. While the transmission lines are being
built, the city agrees to sell the electricity from Moccasin to PG&E.In
May 1923, the National Park Service gets wind of the deal and
begins to investigate. The investigation concludes that the deal is
illegal under the Raker Act, but the solicitor general of the
Interior Department declines to take action, saying that the arrangement
is only a temporary measure to avoid letting all that power go to
waste while the city finishes building its own transmission lines
and local distribution system.1925: Transmission lines are
strung all the way to the South Bay, when suddenly the city announces
that it has run out of money and can't do any more construction. The
city's power line ends just a few hundred yards from a PG&E substation
in Newark - which conveniently connects to a new high-voltage cable
PG&E has just completed from Newark to San Francisco.On July 1, 1925,
since the city lacks not only a final transmission line but the local
facilities to distribute its own power, city officials agree, as another
temporary measure, to sell the Hetch Hetchy electricity at wholesale
rates to PG&E, which then sells it to local customers at retail. The
city makes a few million dollars off the deal; PG&E makes a fortune.The
remaining copper wire is stashed in a warehouse and eventually sold
for scrap. Every supervisor who votes to approve the contract is thrown
out of office in the next election.
1927: The supervisors place a general-obligation bond act on
the city ballot to raise the money to buy the utility poles, wires,
meters, and other equipment the city needs to set up a municipal power
system.PG&E campaigns vigorously against the bond measure, claiming
it will raise taxes. The Chamber of Commerce and most of the local
newspapers follow the PG&E line. City officials make only a halfhearted
effort to support the bonds. In the end, 52,215 vote in favor of the
measure, and 50,727 against - but since the city charter requires
a two-thirds majority for general-obligation bonds, the proposal fails.
1930: In September, Interior
Secretary Wilbur writes to Mayor Rossi and asks what the city is doing
to comply with the Raker Act. Rossi agrees to meet with Wilbur in
December, and the two work out a three-year plan that will lead to
San Francisco's creating its own public-power agency.The supervisors
place another bond act on the ballot. PG&E spends the unprecedented
sum of $21,153.71 on a successful campaign to defeat it. Rossi's three-year
plan gathers dust.Ultimately, nine bond proposals will go before the
San Francisco voters. PG&E will mount a high-priced campaign against
every one, and with no effective leadership from city officials to
promote the benefits of public power, every proposal will be defeated.
1933: President Roosevelt
appoints Harold Ickes secretary of the interior. Ickes learns of the
1923 Park Service investigation into San Francisco's power sales to
PG&E, and asks his solicitor general to look into the situation and
see whether anything has changed.
Aug. 24, 1935: Ickes issues
a detailed opinion concluding that the city's contract with PG&E is
a clear violation of the Raker Act. He urges the city to revoke the
contract and move with all dispatch to establish a municipal power
system. Mayor Rossi acknowledges receipt of the ruling and tells Ickes
he's referring the matter to the city's Public Utilities Commission.
March 9, 1937: After repeated
warnings from Ickes, Rossi and the supervisors place a charter amendment
on the ballot authorizing the city to sell $50 million in revenue
bonds to establish a municipal power system. Unlike previous general-obligation
bond measures, the revenue bonds will have no impact on local taxes
and will be repaid entirely from public-power revenues. The measure
once again fails - largely, Interior Solicitor General Frederic Kirgis
concludes, "due ... to lack of support by the Mayor and his failure
to campaign for it."On March 11, Ickes sends Rossi a cable giving
the city 15 days to convince him it is serious about complying with
the Raker Act. When no such assurance arrives, he instructs
the U.S. attorney general to file suit. Rossi immediately sends a
cable to Washington begging Ickes to delay legal action and asking
for another conference. Ickes wires back that for two years he has
"patiently tried to persuade San Francisco to obey the mandate
in a law which it originally concurred in, but without success,"
and tells Rossi he sees no point in further discussion. "Apparently,"
Kirgis notes in a memo to Ickes, "the Mayor was completely bewildered
and disconcerted by the knowledge of the fact that conferences and
delays would no longer be the regular order of things."
April 11, 1938: Federal
judge Michael J. Roche rules in favor of Ickes, concluding that San
Francisco's contracts with PG&E violate the Raker Act's ban
on sales of Hetch Hetchy power to a private corporation. The law states
that in the case of any attempt by the city to "sell, assign,
transfer or convey" Hetch Hetchy power to a private corporation,
the grant "shall revert to the Government of the United States."
Ickes, however, decides not to ask for a forfeiture ruling in the
hope that San Francisco will accept the court's mandate and comply
with the act. Roche issues an injunction forbidding the city to continue
selling power to PG&E, but suspends enforcement for six months to
give city officials time to come up with an alternative plan that
the Interior secretary will find acceptable. Ickes announces that
he's "ready to consider any proposals officials of San Francisco
might have to offer."Instead, the city appeals. Rossi vows to
fight all the way to the Supreme Court if necessary and says that
"if worst comes to worst ... the city should move for amendment
by Congress of the Raker Act."
Sept. 13, 1939: The 9th
Circuit Court of Appeals overturns Roche's decision, concluding,
as the city's attorneys have argued, that as long as the San Francisco
voters refuse to approve a bond act for municipal distribution facilities,
the city has no choice but to let PG&E act as its "agent"
for the sale of electric power. Ickes instructs the Attorney General's
Office to file an appeal with the U.S. Supreme Court.
April 22, 1940: The Supreme
Court rules 8-1 in favor of Ickes and directs Judge Roche to reinstate
his injunction. Justice Hugo Black, writing for the majority, unequivocally
rejects the city's position. "Congress," he notes, "clearly
intended to require - as a condition of its grant - sale and distribution
of Hetch Hetchy power exclusively by San Francisco and municipal agencies
directly to consumers in the belief that consumers would thus be afforded
power at cheap rates in competition with private power companies,
particularly Pacific Gas and Electric." Black dismisses the city's
technical arguments in support of the 1925 contracts with a terse
phrase: "Mere words and ingenuity of contractual expression,
whatever their effect between the parties, cannot by description make
possible a course of conduct forbidden by law."Black's opinion
acknowledges that city voters have refused to put up the money for
a municipal distribution system and admits that the courts have no
right or authority to tell the citizens of San Francisco how to spend
their money. However, he explains, Congress has every right to attach
conditions to a grant of federal land - and if the city, for whatever
reason, fails to live up to those conditions, the federal government
has the right to revoke that grant. He quotes the comments of Sen.
Walsh of Montana during the Raker Act debate: "We are making
a grant of rights in the public lands to the city of San Francisco,
and we may impose just exactly such conditions as we see fit, and
San Francisco can take the grant with those conditions or it can let
it alone."The ruling concludes that "the city accepted the
grant by formal ordinance, assented to all the conditions ... and
up to date has utilized the rights, privileges and benefits granted
by Congress. Now the City seeks to retain the benefits of the Act
while attacking the constitutionality of one of its important conditions."The
Chronicle and Examiner both blast the decision, lampooning Ickes
and congressman Frank Havenner, who supports public power, as tyrants
determined to force their will on the people of San Francisco. Both
papers run editorials asserting that the city is best served by continuing
to sell its power to PG&E and that Ickes' position amounts to an attempt
to take away the millions of dollars in annual revenue the city receives
from the PG&E contracts. Only the San Francisco News reports the truth:
Every other city that runs a municipal utility finds public power
very lucrative, and the potential gains to San Francisco from complying
with the Raker Act make the annual payments from PG&E look like bird
May 6, 1940: A group of
San Francisco businessmen, led by Chamber of Commerce president Walter
Haas, announces plans to push Congress to amend the Raker Act and
eliminate the city's public-power mandate. Rep. Richard Welch agrees
to introduce the amendment, and Sen. Hiram Johnson agrees to support
it. The Welch bill never even makes it out of committee.
May 21, 1940: Ickes meets
with Mayor Rossi, City Attorney John O'Toole, Board of Supervisors
president Warren Shannon, and Utilities Manager E.G. Cahill in Washington
and warns that if they don't quickly come up with a plan to comply
with the Raker Act, he'll move to revoke the grant and take over the
dam. "You would be here on a much better footing," he tells
them, "if the record of delay, evasion and double-crossing hadn't
been what it has been on the part of officials of San Francisco."Cahill
insists that PG&E "has seen the handwriting on the wall"
and that something could be worked out, given time. "Yes,"
Ickes replies, "all you want is time until I'm out of office....
I have always believed that a man can be fooled once, but a man is
a damn fool who allows himself to be fooled a second time, and this
isn't only the second time."
July 23, 1940: Rossi, O'Toole,
Shannon, and Cahill travel to Washington again for a second conference
with Ickes. Cahill presents a new plan: The city, he suggests, can
lease all of PG&E's local distribution facilities and hire the company's
local sales, repair, and service staff for a flat annual fee. Then
the city can use those facilities to sell Hetch Hetchy power. In the
wake of the Supreme Court decision, Cahill says, PG&E has accepted
the deal. He presents a copy of a draft lease contract signed by the
company's president, J.V. Black.Ickes asks Cahill if the contract
includes an option to purchase the facilities. Cahill says the company
offered that option, but only at a cost that made the entire lease
deal far too expensive to be feasible.Ickes studies the contract,
and on July 25, he tells the city that he's willing to go along with
a lease, but that the language of this deal still gives PG&E too much
control over Hetch Hetchy power. The San Francisco officials promise
to go back and renegotiate. If PG&E won't offer a better deal, Rossi
promises, a new bond issue will go before the voters on the next possible
ballot. Ickes agrees to ask Judge Roche to suspend his injunction
again, to give the city a few more months.
April 1941: The city sends
Ickes a new lease contract proposal. Ickes asks Leland Olds, chair
of the Federal Power Commission, to review it; Olds concludes that
it's a terrible deal. "It is clear that the proposed arrangement
not only does not offer the city the advantages of public distribution
of Hetch Hetchy power," he writes, "but may even have the
effect of freezing high rates."
May 22, 1941: Ickes holds
another conference with city officials and points out the problems
with the lease contract. Rossi and O'Toole freely admit that it's
not a good deal for the city and that it includes excessive charges
and fees. They tell Ickes they submitted it anyway, because it was
the best deal they could get from PG&E. When Ickes rejects the contract
and threatens to enforce the injunction and begin steps to take back
the dam, Rossi begs for another delay. He says that he's finally prepared
to make the case to the voters in favor of a municipal buyout, and
will try another bond act in November.Ickes agrees to ask Judge Roche
to hold off another year, until the summer of 1942 - but only if Rossi
and San Francisco's civic leaders promise to vocally support the bond
act and campaign strongly for its passage. The Chronicle and Examiner
immediately accuse Ickes of extortion and claim he's trying to "gag"
civic organizations like the Chamber of Commerce and the Downtown
Association. Both groups announce they'll oppose the bond act and
organize a high-powered campaign committee to work for its defeat.
Organized labor, on the other hand, comes out strongly in favor of
the buyout plan. Nearly every union in town endorses it, and prominent
labor lawyer George T. Davis signs on to chair the proÐpublic
power campaign.Ickes travels to San Francisco to campaign for the
bond act. When chamber officials try to meet with him, he reminds
them how much money they've received from PG&E and tells them to take
November 1941: Just a few
weeks before the bond election, PG&E announces a sweeping reduction
in local electric rates. The Chronicle carries the story on the front
page. The bond act goes down to defeat, under another avalanche of
adverse publicity and PG&E money.Ickes informs Mayor Rossi that he
has no choice but to begin moving to revoke San Francisco's Raker
Act grant and take over the O'Shaunessy Dam at Hetch Hetchy
Dec. 7, 1941: Japanese
airplanes attack Pearl Harbor in a stunning, predawn strike, thrusting
the United States into World War II. The War Department quickly looks
for ways to redirect the nation's electric power supplies to essential
March 1942: The War Production
Board orders San Francisco to sell to the Defense Plant Corp. the
entire output of the Hetch Hetchy power project for an aluminum-smelting
factory that is under construction at Riverbank, near Modesto. Ickes
approves the plan, citing the strategic importance of aluminum to
the war effort. He also notes that the factory site will be close
to the city's existing transmission lines, allowing the power to be
carried directly from Hetch Hetchy to the factory without PG&E acting
as middleman. Judge Roche suspends his injunction again, this time
for the length of the contract between the city and the Defense Plant
Corp.All further talk of enforcing the Raker Act is temporarily drowned
out by the roar of the cannons and the hum of giant factories turning
plowshares into swords.
June 1944: Financial problems
and mismanagement bring production at the Riverbank aluminum plant
to a virtual halt, and the War Department prepares to shut it down.
Judge Roche prepares to reinstate his injunction, but San Francisco
files a motion to once again suspend it while the city finds a new
way to dispose of its public power. On June 26, Roche holds a hearing
on the petition and chides city officials for their constant attempts
to use delaying tactics to evade the law. He then agrees to continue
the matter until August, when the city promises to come forward with
another new plan.Arthur Goldschmidt, director of Interior's Power
Division, warns Ickes that the "Hetch Hetchy problem [is] again
rising in San Francisco."
August 1944: Mayor Roger
Lapham sends Ickes an entirely new proposal. It calls for PG&E to
deliver over its lines from Newark enough Hetch Hetchy electricity
to supply all of San Francisco's municipal services - the Muni railway,
the street lights, General Hospital, etc. That would amount to about
200 million kilowatt hours a year. In exchange, the city would allow
the company to keep all the remaining output of the Hetch Hetchy project
- about another 300 million kilowatt-hours a year - and sell that
power to its own customers as it saw fit.Undersecretary Abe Fortas,
filling in for the vacationing Ickes, rejects the proposal. An increasingly
angry Judge Roche gives the city one more chance to come up with a
December 1944: Mayor Lapham
writes to Ickes with the rough outlines of yet another proposed solution
to the Hetch Hetchy "problem." This time, the city proposes
to pay PG&E an annual "wheeling fee" for transmitting enough
Hetch Hetchy power from Newark to San Francisco to supply the municipal
service needs. The Turlock and Modesto irrigation districts, a pair
of rapidly growing public-power agencies, would buy as much of the
remaining power as it could handle, and resell it to their own customers.
Ultimately, Lapham insisted, Modesto and Turlock would be able to
purchase everything the city couldn't use. In the meantime, PG&E would
buy any surplus, or "dump," power to avoid letting it go
to waste.Ickes thanks Lapham for his letter, reminds him that a final,
detailed plan is due by the end of the year, and warns that the Interior
Department "will not participate in any evasion of the law, however
complex or ingenious. I hope that your leadership will not, this time,
have to waste time, energy and newsprint in the fruitless pastime
of beating the devil around the PG&E bush."
January 1945: Ickes writes
Mayor Lapham to inform him that the proposed Turlock-Modesto-PG&E
contracts are not acceptable. "The proposed agreements,"
he notes, "do not carry out the intent of the Congress in the
Raker Act, which was designed to bring City-owned power, over the
City's transmission and distribution system, directly to the citizens
of San Francisco." He agrees that selling the city's power to
Turlock and Modesto, which are public agencies, might comply with
the "letter" of the law. The big problem, as always, was
the role of PG&E. He reminds Lapham that Judge Roche's final extension
will expire on March 1.On Jan. 24, Lapham arrives in Washington and
spends four days meeting with Undersecretary Fortas. With Ickes' approval,
Fortas suggests an alternative plan: If Lapham would place a policy
declaration on the next local ballot binding the city to acquiring
its own power distribution system - and agree to campaign actively
for the passage of that measure and a bond issue to carry it out -
Ickes would support a congressional amendment suspending the prohibition
on sales to PG&E for a period of five years.Lapham tells Fortas that
he'd consider placing the policy measure on he ballot, but says he
"could not at this time commit myself to an active campaign on
behalf of the bond issue."
June 11, 1945: San Francisco
modifies its power contracts again, slightly. This time, the city
agrees to pay PG&E a wheeling fee for transmitting municipal power
and agrees to provide Turlock and Modesto with as much additional
power as they can buy. The surplus would be carried on PG&E's lines
- again, at a fee - to a handful of major PG&E customers, including
Permanente Metals and Permanente Cement, who would pay the city directly
for the service. But only when Hetch Hetchy power generation was particularly
high, and the needs of Turlock, Modesto, and Permanente were low,
would any "dump" power be sold directly to PG&E, and even
then, the amounts would be insignificant. The contracts would run
until 1949.A frustrated Ickes concedes that, as a practical matter,
he has limited options. The nation is in the midst of a severe postwar
energy shortage, and if he were to take over the dam, no other federal
agency would be in a position to use its power. He acknowledges that,
under the circumstances, he can't find solid grounds to oppose the
latest arrangement in court. But he notes that "the plan, while
technically feasible, does not carry out full intent of the Raker
Act" and warns that it "does not appear to assure substantial
compliance with the Raker Act beyond 1949." He urges Judge Roche
to maintain jurisdiction over the matter and says his department "would
oppose present approval of the plan with respect to the years following
1949."He also insists that Modesto and Turlock sign agreements
never to resell their Hetch Hetchy power to PG&E.
July 9, 1945: City Attorney
Dion Holm appears before Roche to argue that the 1938 injunction -
which is still in effect - is too strict, since it bans the city from
ever selling any power to PG&E. Roche denies San Francisco's petition
for suspension or amendment and orders that the injunction become
final and permanent.
1946: President Truman
fires Ickes, who has become increasingly bitter and unhappy with his
job, and replaces him with Oscar Chapman.
November 1946: The General
Accounting Office investigates the new Hetch Hetchy contracts, concludes
that the sale of "dump power" to PG&E is probably illegal,
and suggests that the federal government demand an accounting of all
past sales to PG&E and take legal action to make the city repay its
ill-gotten gains. The comptroller general forwards the GAO report
to Chapman, who sits on it for two years.
January 1948: San Francisco
files its annual report with the Interior Department, which reveals
that more than 5.6 million kilowatt-hours of Hetch Hetchy electricity
were sold to PG&E in 1947. Walter Seymour, director of Interior's
Power Division, writes a memo to Chapman noting that "certainly,
the sale of this amount of power to the Pacific Gas and Electric Company
is a violation of the Raker Act." The memo goes on to state that
the federal government could enforce the court injunction and block
further PG&E sales, but "under the existing conditions of the
shortage of power and the scarcity of fuel, it seems to me that an
action which would result in the wastage of water power would be unwise."Soon,
Seymour advises, the federal Central Valley Project will have completed
a transmission line to Tracy and will be in a position to take over
the Hetch Hetchy power output. Meanwhile, he concludes, "the
distribution of energy beyond Newark ... will have to be made by the
Pacific Gas and Electric Company, until the City builds a distribution
Dec. 22, 1948: After repeated
memos from the Comptroller General's Office, Chapman directs Assistant
Secretary Krug to respond to the 1946 General Accounting Office report.
Krug concedes that the contracts appear to violate the Raker Act but
says that, under the circumstances, "it would be inappropriate
at this time to recommend to the Attorney General that he institute
Feb. 9, 1950: The comptroller
general writes to the Justice Department anyway, informing the attorney
general that he disagrees with Interior's position. He suggests that
"action should be instituted either (1) to enjoin further performance
under the existing arrangement ... (2) to declare forfeit the rights
of San Francisco under the Raker Act ... and (3) to recover ... the
amount received by San Francisco under the illegal 1925 contract."
The attorney general does nothing.
Aug. 28, 1950: San Francisco
begins negotiating an extension of the 1945 contracts. Michael H.
Strawn, commissioner of the Bureau of Reclamation, reviews the proposal
and writes to Chapman to complain that Interior, in tacitly approving
the city's actions, "in effect confesses and condones operations
both outside the law and in contradiction to the strong public power
policy that the Secretary of the Interior has followed in the same
area in Reclamation matters." He suggests that, if the city won't
provide its own distribution system, Chapman move to take control
of Hetch Hetchy and transfer the power to the Central Valley Project,
which has facilities that are "virtually complete" to handle
Sept. 1, 1950: Ickes, still
concerned about the issue, writes to Chapman with charges that San
Francisco is continuing to violate the Raker Act and urges him to
take action. Chapman responds that he is "fully cognizant of
the fact that there has not been a strict compliance with the [law]."
However, he notes: "Thus far, as you well know, the City and
County of San Francisco has not been able, through the vote of the
people of that political subdivision, to acquire the distribution
system necessary to distribute all of the Hetch Hetchy power. Nor
is there any agency of the federal government which is able to distribute
1954: San Francisco approves
a new set of contracts with PG&E and Turlock and Modesto, which will
run for 33 years, until 1987.
1955: Rep. Clair Engle
presents evidence to a congressional committee proving that Turlock
and Modesto have been reselling Hetch Hetchy power to PG&E, violating
the express agreement Ickes insisted on in 1945. Federal Power Commission
figures compiled by Engle show that, between 1945 and 1953, more than
10 percent of the Hetch Hetchy power bought by Turlock and Modesto
has been resold to PG&E. The Interior Department, which seems to have
abandoned all interest in enforcing the Raker Act, pays no attention
1964: Joe Neilands, a biochemistry
professor at UC Berkeley, joins a campaign against PG&E's plan to
build a nuclear power plant at Bodega Bay. He runs into Frank Havenner,
who tells him that the nuclear project is awful but that nothing compares
to the PG&E Raker Act scandal. Neilands, who has never heard of the
Raker Act, is intrigued. He calls James Carr, the new general manager
of the San Francisco Public Utilities Commission, and asks when the
city plans to enforce the 51-year-old law. Carr tells him that "it
is premature to discuss municipal distribution of power in San Francisco."
1965: Neilands writes to
Frank Barry, the Interior Department's solicitor general, who tells
him that "we know of no means by which the U.S. can require the
city to acquire the municipal distribution system."
1972: At the request of
the San Francisco Neighborhood Legal Assistance Foundation,
a group of pro bono CPAs called Accountants for the Public Interest
conducts a study of the financial potential of public power in San
Francisco. The accountants conclude that the city could clear $22
million a year, after all costs, by buying out PG&E's distribution
system and running a municipal utility. The group urges the PUC and
the Board of Supervisors to commission a full-scale, independent feasibility
study. Not one supervisor is even willing to request a hearing on
1973: The San Francisco
civil grand jury investigates the Raker Act scandal, concludes that
the city is required to operate its own public-power system, and asserts
that the contracts with Modesto, Turlock, and PG&E are "of questionable
legality." The daily newspapers ignore the report, and it winds
up gathering dust on a City Hall shelf.
1974: Attorney Richard
Kaplan and neighborhood activist Charlie Starbuck file suit in federal
court, charging that San Francisco is in violation of the Raker
Act. A district judge throws it out of court, concluding that
Starbuck, as plaintiff, has no standing to sue for enforcement of
the Raker Act. By law, only the secretary of the interior and
the San Francisco city attorney have the right to pursue that action.
Kaplan and Starbuck appeal.
1977: The 9th Circuit Court
of Appeals rejects the Starbuck and Kaplan case, confirming the lower
court ruling that a San Francisco citizen lacks standing to sue. The
appellate judges, however, make a point of stating that they don't
find fault with Starbuck's factual claims. If anything, the ruling
seems to continue the federal courts' record of agreeing that San
Francisco is breaking the law.
1982: A citizen group called
San Franciscans for Public Power puts an initiative on the ballot
that would force the city to conduct a feasibility study on municipalizing
PG&E. PG&E spends $680,000 - a local record - funding a misleading
campaign headed by Mayor Dianne Feinstein to defeat the measure. Among
the few prominent supporters of the public-power initiative is Assemblymember
Art Agnos, who holds a press conference outside PG&E's headquarters
to denounce the company's blatant attempt to "buy San Francisco's
1983: Just weeks after
the public-power initiative goes down to defeat, PG&E officials contact
the City Attorney's Office to start renegotiating the power-sale contracts,
which are due to expire in 1985. Talks begin in secret at PG&E headquarters,
with lawyers from the company and the City Attorney's Office trying
to hash out a new long-term agreement. PG&E wants to raise the rate
it charges San Francisco for "wheeling" power along company
lines and for "firming" service, which backs up the city's
power supply when rainfall is low and the generators at the dam aren't
producing at their optimal levels. Since the recent public-power measure
has gone down to defeat, the city has no real leverage to use as a
bargaining chip against PG&E. Facing the prospect of millions of extra
dollars in PG&E fees, the city's negotiating team decides to raise
the rate that San Francisco charges the Turlock and Modesto irrigation
districts for Hetch Hetchy power.
September 1984: The general
manager of the Turlock Irrigation District, Ernest Geddes, finds out
what San Francisco and PG&E are up to, and asks Rep. Tony Coelho for
help. Coelho, who has become one of the most powerful Californians
in Congress, invokes the Raker Act: The city, he says, is supposed
to sell power directly to the citizens at the lowest possible cost.
Since San Francisco doesn't have a municipal utility of its own, he
argues, that provision ought to apply to sales to Modesto and Turlock,
which are public-power agencies. Just to be sure, he introduces a
bill that would force San Francisco to sell Hetch Hetchy power to
the irrigation districts at cost - in other words, for almost nothing.Mayor
Feinstein realizes that the bill will probably pass and that the city
will be in a bind. Unless the sales to the districts bring in fairly
substantial revenues, it will be hard to defend the whole concept
of "disposing" of Hetch Hetchy power outside the city, and
new pressure for a municipal utility could emerge. A longtime ally
of PG&E and a foe of public power, Feinstein quickly contacts Coelho
and cuts a deal: Coelho agrees to withdraw the bill, but Feinstein
has to promise to sell almost two-thirds of the Hetch Hetchy
output to the districts, at favorable rates, every year until 2015.
The city negotiators go back to the table to continue their talks
with PG&E, with less leverage than ever.
May 1985: The City Attorney's
Office briefs the Board of Supervisors in secret session on the outlines
of the emerging power-sale deals and asks the board to approve "the
basic principles" of a new set of 30-year contracts. The board
votes 6-0, on roll call, to approve the deal, with no public discussion
or debate, and to accept "interim" two-and-a-half-year contracts
while final talks continue. The negotiators go back to work out the
June 1987: Staffers at
the city's Public Utilities Commission and the City Attorney's
Office argue in internal memos that PG&E is asking for completely
unreasonable terms in the final contracts, fee hikes that would cost
the city millions. The company refuses to compromise, and talks break
down. Finally, Feinstein personally intervenes, meeting privately
with PG&E chair Richard Clarke and hashing out a contract that nobody
outside PG&E thinks is a good deal for the city. In essence, it requires
the city to keep paying PG&E millions of dollars a year for "wheeling
fees," guarantees Turlock and Modesto access to more than half
the city's Hetch Hetchy power, and effectively sabotages any
new attempt to create a municipal power system.
Fall 1987: Interior Secretary
Donald Hodel becomes the latest federal official to threaten San Francisco
with the loss of its Raker Act grant. He proposes to study tearing
down the dam and restoring Hetch Hetchy Valley. The Sierra
Club, among other environmental groups, strongly endorses the concept
- after all, club members say, the city never kept its end of the
1913 deal. But Hodel never pursues the matter seriously, and it quickly
1988: On New Year's Eve,
the newly elected mayor, Art Agnos, is summoned to PG&E headquarters
to meet with Dick Clarke, who tells him the facts of life: PG&E controls
enough votes on the Board of Supervisors to block any effort at promoting
public power. The contracts can't be changed and will never be stopped.
And if Agnos doesn't want to play ball, PG&E will crush his political
career.The city's budget analyst reports that the contracts are a
bad deal and a violation of standard city procedures and takes the
unusual step of recommending that the supervisors not approve the
deal. A Guardian analysis shows that San Francisco is losing more
than $150 million a year to PG&E by failing to comply with the Raker
Act and establish a municipal utility.But the board votes 8-3 to go
along with PG&E for another 37 and 1/2 years, and Agnos, the onetime
public-power advocate who campaigned as an alternative to the pro-downtown
politics of the Feinstein era, signs the contracts into law.Just a
few weeks later, Agnos announces that the city's budget is facing
a shortfall that could approach $100 million. He warns that services
may be cut dramatically, that small businesses, Muni patrons, and
kids who go to the zoo will have to pay higher prices to keep the
city in the black.Not once does he mention PG&E.
Sept. 22, 1993: The City
of Sanfrancisco loses millions of dollars a year by failing to bring
its own Hetch Hetchy public power into the city. Worse yet, the city
risks is losing the Hetch Hetchy watere supply by failing to
comply with the federal Raker Act of 1913. It requires, in
exchange for the right to dam the Hetch Hetchy Valley in Yosemite
National Park, the city "shall develop and use power for
the use of its people." Actually, the city's public-power agency,
Hetch Hetchy Water and Power, supplies power to about 1,300 government
entities, including the City Attorney's Office. But the rest of Hetch
Hetchy's power gets dumped in Turlock and Modesto. No San Francisco
residents or businesses benefit from the cheap power generated by
the dam -- power that is rightfully theirs. Instead the city pays
about $25 million annually to PG&E for the private utility to "wheel"
(carry) power into San Francisco.
Jan. 12, 1994: The National
Park Service announces plan to hand over the valuable Presidio
electrical system to PG&E -- and then pay the company more than $12
million to take it. The entire deal violated federal bidding laws.
Officials from the city public power agency, Hetch Hetchy Water
and Power, show no interest in supplying power to the Presidio.
In fact, Espinoza reports, Hetch Hetchy general manager Larry Klein
told Park Service officials in 1992 that the department was not interested
in running the system.
Jan. 31, 1994: The National
Park Service negotiates the Presidio contract with PG&E,
Supervisor Angela Alioto that alls on the San Francisco Public Utilities
Commission to bid for the contract.
Feb. 16, 1994: Public-power
advocates urge the city to bid for the Presidio's electrical system.
But Anson Moran, general manager of the Public Utilities Commission
shows his stripes when he tells the board's Select Committee on Base
Closures that selling power to the Presidio could be "too political."
March 15, 1994: The National
Park Service agrees to give San Francisco's public-power agency a
chance to bid for the Presidio power contract (RFP) but releases a
request for proposals that virtually guarantees PG&E will win; the
RFP calls for the bidders to operate a system that PG&E has designed.
The Park Service admits that the RFP was based in part on information
provided by PG&E.
March 30, 1994: Despite
his public statements that the PUC would prepare an "aggressive
bid" for the Presidio contract, PUC chief Moran privately works
to undermine the effort. In a confidential memo to Mayor Frank Jordan,
obtained by the Bay Guardian, Moran urges Jordan to veto Alioto's
resolution calling for public power at the Presidio.
April 1, 1994: Mayor Jordan
vetoes Alioto's Presidio public-power bill. Alioto allies cry foul.
May 2, 1994: The Board
of Supervisors unanimously overrides Jordan's veto and approves Alioto's
resolution urging the city to bid for the takeover of the Presidio
Aug. 4, 1994: In a major
concession to public pressure, the historically PG&E-friendly PUC
agrees to bid on a contract for the Presidio electrical system.
Aug. 8, 1994: Hetch
Hetchy Water and Power submits its bid for the Presidio system,
marking the first time the agency has ever competed with PG&E for
a contract. But it fails to bring up the point that PG&E had no franchise
agreement with the city to provide power there; it also fails to cite
the Raker Act.
Sept. 29, 1994: Despite
competitive bids by the city of San Francisco and two other bidders,
the Park Service awards the power contract to PG&E.
Oct. 13, 1994: Under immense
pressure from Alioto and public-power advocates, City Attorney Louise
Renne files a protest with the General Accounting Office in Washington,
D.C., to stop the Park Service from awarding the Presidio electrical
contract to PG&E.
Oct. 31, 1994: The Board
of Supervisors votes to raise the PG&E franchise fees from 0.5 percent
to 2 percent of the utility's gross revenue for 1995, and then to
4 percent each year after that (a rate still below the national average
and less than half of what some cities charge). The increase would
bring more than $21 million yearly into the city's General Fund.It
would also balance the high fees PG&E charges the city for wheeling
Hetch Hetchy power: in 1994 PG&E paid the city $2.4 million in franchise
fees for delivery of electricity, and the city paid PG&E about $25
million in fees for wheeling power into the city. PG&E refuses to
pay the new rates. The City Attorney's Office does virtually nothing
to enforce the board's legislation, claiming that PG&E has won a court
injunction barring the increase. That, it turns out, is untrue: in
June 1996, at a public hearing, Deputy City Attorney Michael Olsen
admits to Alioto that no injunction had ever been issued.
Nov. 7, 1994: Reacting
to the surge in public-power activism, Angela Alioto, as president
of the Board of Supervisors, proposes a special committee to pursue
ending PG&E's illegal monopoly in San Francisco and bringing cheap
public power to residents. PG&E lobbies hard against the proposal,
but Alioto succeeds in getting the board to narrowly approve the creation
of the Select Committee on Municipal Public Power. Alioto notes that,
at a time when the city was closing health clinics because of budget
shortfalls, the potential revenue that could come from municipalization
is too attractive to ignore.
Jan. 12, 1995: The Select
Committee on Municipal Public Power votes to spend $150,000 on a preliminary
study of whether the city should take over PG&E's distribution system.
Jan. 12, 1995:City Controller
Ed Harrington announces that his office will perform the first audit
of PG&E franchise-fee payments. Harrington defends the city's lack
of prior enforcement by saying, "There are a variety of items
in the administrative code that aren't being done by the city."
The city's chief administrative officer, Rudy Nothenberg, is also
required by the code to file reviews of PG&E compliance with the franchise
agreement. But he writes in a letter to the board that he can't get
involved in financial issues with PG&E because his wife works for
the utility. The Bay Guardian later discloses that Nothenberg owned
between $20,000 and $200,000 in PG&E stock.
Jan. 17, 1995: The Board
of Supervisors votes 7 to 3 to ask Mayor Frank Jordan to spend $150,000
on a preliminary feasibility study. Jordan vows to fight the expenditure.
Jan. 20, 1995: Mayor Frank
Jordan, whose reelection campaign will rely heavily on financial and
political support from PG&E and its allies, writes a letter to the
board indicating his plan to veto the supervisors' legislation requiring
a feasibility study.
Feb. 15 1995: The General
Accounting Office in Washington, D.C., dismisses City Attorney Renne's
protest of the awarding of the Presidio contract to PG&E as "untimely"
and upholds the Park Service's decision. In essence, the GAO rules
that Renne's office missed the filing deadline for contract protests.
Feb. 17, 1995: City Controller
Ed Harrington releases the first audit of PG&E's franchise-fee payments.
In the audit, conducted only for 1991 through 1993, Harrington finds
that PG&E owes the city $114,276 for using city streets to deliver
electricity and gas to the Presidio for the period from Jan. 1, 1991,
through Dec. 31, 1993. PG&E refuses to cooperate, declining to give
the city documents that are key to determining if the utility is accurately
and fairly calculating how much it owes in franchise fees.The audit
also finds that in a random sampling of bills, PG&E overcharged local
customers by a total of $514,130. On the advice of the City Attorney's
Office, Harrington refuses to audit PG&E for the years prior to 1991
and also fails to go after fees owed on other military bases, including
Hunters Point and Fort Mason, since 1939. His decision may have kept
the city from collecting millions of dollars. Renne's office says
it has no way of knowing how much the city is owed for the years 1939
.March 20, 1995: In a first
real step toward complying with the Raker Act, the Board of Supervisors
votes 8 to 2 to require the PUC to conduct a $150,000 preliminary
feasibility study. The ordinance includes language stating that if
any city officials try to block the study, they will be guilty of
"official misconduct," which is grounds for removal from
.April 5, 1995: The Board
of Supervisors unanimously decides to urge the PUC to sue to overturn
the Park Service's decision to give the Presidio contract to PG&E.
May 24, 1995: Without publicly
announcing the move, City Attorney Louise Renne files suit against
PG&E and the federal government in an attempt to overturn the Park
Service's multimillion-dollar giveaway of the Presidio contract. The
suit alleges that PG&E should have been disqualified because it had
designed the system it then bid on. The city attempts to lay out how
the Park Service rigged the bid for PG&E. Once again, both daily newspapers
black out the story.
May 24, 1995: PG&E files
suit in state court against San Francisco to block the city's attempt
to collect millions of dollars in franchise fees the utility owes
for delivering power to the Presidio. Public-power advocates call
the suit a "preemptive strike." The city countersues in
what Harrington says is a way for the city to collect on franchise
fees owed on the Presidio since 1939. But the City Attorney's Office
never attempts to use the suit to break the original 1939 franchise,
although public-power advocates contend that PG&E's failure to pay
franchise fees on the Presidio is grounds for ending the agreement..
July 17, 1995: Alioto outfoxes
Jordan by replacing $150,000 (to cover the study) from $375,000 in
proposed cuts to the PUC's budget.Dec. 19, 1995: The PUC terminates
Strategic Energy Limited's contract. Hetch Hetchy general manager
Larry Klein admits to making a "couple errors in judgment":
namely, not telling the commission that two losing bidders had protested
a disputed scoring process.January through March 1996: Alioto
and public-power advocates have trouble getting the PUC to set up
a technical review committee for the study that would include citizens
interested in municipalization. In fact, Klein tries to put John Madden,
the city's chief assistant controller, on the committee. Madden owns
as much as $100,000 worth of PG&E stock and helped defeat a 1982 campaign
for a feasibility study by providing an inflated, PG&E-generated figure
for the purchase price of the distribution system. Renne even says
at one point that creating such a committee would violate the city
charter. Eventually the PUC relents, establishes the committee, and
allows a representative of San Franciscans for Municipal Public Power
to join it.
April 1, 1996: Alioto asks
Renne for a review of the city attorney's long-standing position that
the city's dispersal of Hetch Hetchy electricity is in technical compliance
with the Raker Act. This is a key question: For decades, the City
Attorney's Office has relied on a series of internal opinions that
effectively trumpet the PG&E line that the Raker Act doesn't require
public power in San Francisco. The Supreme Court has determined otherwise
in clear language -- but because the city attorney is the only local
official with the authority to enforce the Raker Act, the pro-PG&E
opinions have been a roadblock. Alioto never gets a new opinion.
May 6, 1996: The technical
review committee selects J.W. Wilson
& Associates of Washington, D.C., a firm with 20 years of experience
consulting with municipal systems, to perform the feasibility study.
Wilson had done two feasibility studies -- in Gilbert, Ariz., and
Page, Ariz. -- that led to successful municipalizations. Economic
and Technical Analysis Group (ETAG), another bidder whose president
said the firm's members had performed $1,000 worth of work for PG&E,
was not chosen.
May 28, 1996: Under lobbying
pressure from PG&E, three PUC commissioners -- Victor Makras, Dennis
Normandy, and Marion Otsea -- award the contract to ETAG, despite
protests by Wilson and public-power advocates. ETAG discloses to PUC
staff that members of the firm have performed at least $140,000 worth
of work for PG&E; instead of stressing that point, PUC staffer Larry
Klein includes in the packet to the commissioners an article critical
of Wilson. In September PG&E discloses to the San Francisco Ethics
Commission that Sam Lauter and Larry Simi discussed the choice of
contractor with those three commissioners during that time
June 10, 1996: The Board
of Supervisors unanimously passes a resolution urging Mayor Willie
Brown to urge the PUC to terminate the contract with ETAG and award
the contract to Wilson. Brown takes no action on the resolution, thereby
making it official board policy. The PUC ignores the legislation.
June 25, 1996: After discussing
the matter in closed session, the PUC reconfirms its selection of
ETAG. Commissioners do not formally respond to protests made by Wilson
and San Franciscans for Municipal Public Power's Joel Ventresca, a
member of the technical review committee.
Mid-August to October 1996:
Klein informs Alioto that delivery of the preliminary feasibility
study will be delayed until Jan. 15, 1997, about one week after Alioto
will be forced by term limits to leave office. Klein says delays in
the selection process, due to the protest of ETAG's selection, made
it impossible for the firm to meet the deadline. Klein's move is illegal,
as the Board of Supervisors must approve any changes to the ordinance,
which requires delivery of the study by Oct. 30, 1996.Sept. 24,
1996: City Controller Ed Harrington releases an audit of PG&E
franchise-fee payments for 1994 and 1995. He finds that PG&E owes
the city $18,218 for using city streets to deliver electricity and
gas to the Presidio for the period from Jan. 1, 1994, to Sept. 30,
Sept. 26, 1996: At a select
committee meeting, Alioto makes another attempt to raise the yearly
fees that PG&E pays for the right to transmit gas and electricity
across city property. She proposes to raise the fee from 1 percent
to 4 percent for natural gas and from 0.5 percent to 2 percent for
electricity. The City Attorney's Office maintains that the franchise
agreement cannot be changed.
Oct. 25, 1996: Judge Vaughn
Walker decides the Presidio case in favor of the federal government
and PG&E. The order is filed under seal, and the city does not object.
By losing the case, the city loses a $50 million contract and a chance
for a public-power beachhead.
Nov. 27, 1996: The select
committee votes to call for a full feasibility study. Meanwhile, the
Bay Guardian reveals that numerous community organizations -- such
as the Mission Neighborhood Center and Kimochi -- receiving money
from PG&E have written to supervisors asking that a full feasibility
study be killed.
Dec. 11, 1996: Under pressure
from PG&E, the budget committee's Barbara Kaufman and Tom Hsieh table
Alioto's feasibility study. The move is unusual; it means that Alioto,
the legislation's sponsor, cannot vote on the issue because under
term limits she will be out of office. Alioto vows to take the study
out of committee and put it to the full board for a vote.
Jan. 6, 1997: Alioto's
last day in office. She brings the feasibility study up for a full
vote Jan. 13.
Jan. 8, 1997: Newly minted
president Barbara Kaufman kills the Select Committee on Municipal
Jan. 13, 1997: Supervisors
kill Alioto's feasibility study by an 8 to 2 vote. Leslie Katz, Jose
Medina, and Leland Yee all break campaign pledges to the Bay Guardian
to support the feasibility study and vote against the ordinance. Also
voting for PG&E are Supervisors Amos Brown, Barbara Kaufman, Susan
Leal, Mabel Teng, and Michael Yaki. Only Supervisors Tom Ammiano and
Sue Bierman vote in favor.
Related News Story Links:
Damage to the Spring Valley Water Company 1906
Hetch Hetchy Hearings 1908
Hetchy Damming Scheme, by John Muir -1908
Endangered Valley..., by John Muir
Club Telegram to Congress Protesting Hetch Hetchy Bill 1908
Help to Save
the Famous Hetch-Hetchy Valley, by John Muir 1909
Raker Bill for
Hetch Hetchy 1913
of Spring Valley Water Co. Holdings
System in the World
Hetch Hetchy Woes
Damage to the Water
Supply during the Earthquake
Windmill Pumps at
Golden Gate Park
Auxiliary Water Supply System..., (1907)
High Pressure Water System
for Fires Following Earthquake
of Greenberg Fire Hydrants
Slide at Yosemite National Park"
Yosemite Fall Landslide Sunday"
Very Much Like 2.15 Earthquake May Have Had Human Cause!"
"Flumes - Archives"
Nevada Range Still Growing - Fast!"
Standing of Sequoia Trees"
of Global Warming"
note: The major governmental actions affecting Yosemite and the Sierra
Nevada occurred during the Great Depression, 1929 to 1939.
The federal government took over control of the state-proposed Central
Letter to the Editor
Construction of a portion of the federal
project began in the 1930s, but the dams and aqueducts that constitute
most of the project were not completed until the 1950s. The quest
for water by the cities of San Francisco and Los Angeles had an immediate
impact on the Sierra Nevada's streams at that time. Many histories
exist of these two cities' attempts to gain control of Hetch-Hetchy
Valley and the Tuolumne and Owens River water.
While water for growing popu-lations was
an important reason for seeking to use Hetch-Hetchy and the
Owens River, both cities clearly wanted hydroelectric generation
to be an important part of these de-velopments. It is often stated
in historical accounts that San Francisco had other options. Surprising
as it seems today, John Muir even suggested that Lake Tahoe,
its shores denuded of timber and facing degradation of its water purity
anyway, be given to San Francisco.
In partial defense of San Francisco's actions,
however, it is likely that even if San Francisco had not claimed Hetch-Hetchy,
other urban centers would have pressed claims for it. As many observers
of that time have pointed out, the climate of Califoria Progressive
politics, a conservation ethic that stressed utilization
of resources in service to the public interest was likely to prevail
in any struggle for power.
As a consequence of these circumstances,
agency actions taken to assure a water supply for the city of San
Francisco had devastating consequences on the Hetch-Hetchy-Tuolumne
River system, leading to the eventual construction of the O'Shaughnessy
Dam, the decimation of Hetch-Hetchy's forests, and the
flooding of its verdant meadows.
The accuracy of this Chronology has been verified
by cross-checking with facts obtained from archives of the Fresno
Republican Newpaper, The Sacrmento Bee Newspaper, The
California Star Newspaper, The San Francisco Call Bulletin,
Yosemite Nature Notes, The Yosemite Natural History Association,
interviews with National Park Service officials, including Yosemite
National Park Chief Natruralist, Bryan Harry (1961),The Library
of Congress (1964), and documents on file in the Yosemite National
Park Museum Library (1961-71), The National Archives (1993),
and archives of The Century Magazine.]
©1962, 2001 The Yosemite Valley News. All rights
Republished with permission.