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> SF even owns the hydro generator at O'Shaughnessy Dam.

They own the dam, but the Federal government still owns Hetch Hetchy water and land. Permission to use Hetch Hetchy is governed by the Raker Act, which stipulates[1] that SF can only resell the electricity and water through public municipal districts, not to private utilities:

> Sec. 6. That the grantee is prohibited from ever selling or letting to any corporation or individual, except a municipality or a municipal water district or irrigation district, the right to sell or sublet the water or the electric energy sold or given to it or him by the said grantee:

> Provided, That the rights hereby granted shall not be sold, assigned, or transferred to any private person, corporation, or association, and in case of any attempt to so sell, assign, transfer, or convey, this grant shall revert to the Government of the United States.

The original plan was that SF would build both aqueducts and transmission lines to SF, branches of which could serve other municipal districts. But they only ended up building the aqueducts, and contracted with PG&E to transmit the electricity. The question is, is SF violating the Raker Act? Previous administrations have said no or demurred requests to answer the question; typically the people raising the issue want the dam removed. SF claims PG&E is acting as their agent and everything is above board. But, above board or not, I've read some old articles that suggest there's a 50+ year-old understanding or gentlemen's agreement between SF and PG&E, that PG&E would give the City of SF (if not its residents) sweetheart pricing on transmission, etc, and defend the status quo in DC so long as SF didn't attempt to buildout it's own transmission lines or otherwise cut PG&E out of the loop. But if SF did do that, PG&E would lobby DC to terminate the grants under the Raker Act. From the beginning, many cities in California, and even politicians outside California, have resented the Federal grant to San Francisco, so presumably with the right trigger a very large lobby could quickly arise and demand the Raker Act be replaced with a new deal that gave other municipalities in California a direct stake in Hetch Hetchy. It's even possible PG&E comes out on top, because who's going to transmit the electricity?

Of course, that story leaves alot of unanswered questions. But it sounds plausible to me. With CEQA, etc, there's zero chance SF could ever build out its own transmission lines today; it would take untold billions and, more importantly, decades--far longer than the Raker Act would likely survive. Currently the City of SF basically pays nothing to power its public buildings (schools, etc), MUNI buses and trains, and possibly SFO (which SF owns and operates). The budgetary and logistical upheaval that would happen if the Raker Act grant was rescinded (which, again, almost every other municipality in the state would support) is mind boggling. Even if we assume every mayor has earnestly wanted to cut PG&E out of the loop and do right by SF residents' individual power bills, what sane, term-limited administrator would invite that chaos? Plenty of mayors have broached the subject, but invariably such suggestions silently stop, so presumably it's just a negotiating tactic with PG&E that both sides are very careful not to let get out-of-hand.

[1] https://sfmuseum.org/hetch/hetchy10.html

So cherry pick the nice dense area and leave the rest of the state with the hard to serve areas?

Follow the money. Who appoints people to regulate electricity in California? The governor. Who mentored California's current governor? Willie Brown. Who does Willie Brown work/lobby for? PG&E.

Please note that AB 1890 which deregulated and divested electricity markets was passed during the tenure of Pete Wilson with the help of a bunch of Republicans holding the legislature budget hostage.

California has been dealing with the idiocies caused by that ever since.

That claim would be hilarious and also wildly inaccurate, that OP apparently never heard of a PSPS. California’s grid is not particularly resilient or reliable, and certainly not in the 2016-2020 time frame. Also, the regulatory framework is awful and high prices are driven by a mix of 1- regulatory capture and disincentives to utilities saving money, 2- wildfire mitigation costs, 3- NIMBYism and the lack of ability to build anything quickly, and then a hodge podge of CA specific issues.

Have been in California for 10+ years and I've never seen anyone describing California's electricity infra as reliable. It shows the same kind of failure that's too familiar to many Americans: a vital service is managed by a corporation that has no incentive for better services, and market forces do not work due to the nature of the service. (If the power at your home in SF goes out all the time, it's not like you can find another provider - the best you can do is move to, say, Nevada, which is not realistic for most people.)

A substation outage isn't a grid issue.

The same substation went up about a decade ago, I'd be pretty cautious about calling problems with PG&E infrastructure "one off".

California's rates were rationalized, in part, because California is taking steps to increase reliability. It's been decades seen we've seen rolling blackouts at the hands of Enron. Long-term plans to increase intra-state transmission capacity are in place and are currently being executed (you're welcome to dig them up on the ISO's site). The weather related preemptive power cuts have been pared back dramatically since their introduction. We're talking hundreds of thousands of people without power for days versus hundreds or thousands for hours.

Let's not forget that the "grid problems" you're referring to cost some ratepayers tens of thousands of dollars because that's the sort of retail electric plan that was legal in Texas.

But also please don't lump all Californians one group. PG&E rate payers are extorted for some of the highest electric rates in the nation (as are SDG&E and most IOU rate payers). Folks with access to municipal power in California pay far less.

Related:

Waymo halts service during S.F. blackout after causing traffic jams https://missionlocal.org/2025/12/sf-waymo-halts-service-blac...

(https://news.ycombinator.com/item?id=46342412)

Rather than get another utility involved, I'd rather see far more incentives for installing home storage and ideally solar as well, especially for rental properties. Nothing's more resilient than a distributed grid.

Dunno, I think it's quite reasonable to class electricity as a natural monopoly. What's less reasonable is regulatory capture. Landline telephones were insanely reliable in their heyday because they were required to be so. PG&E is reckless because they're allowed to be reckless.

Edit: For non-Americans, landline telephones were highly regulated up until '82 with AT&T having a government sanctioned monopoly.