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The People's Power | The Nation

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Beat the Devil

The People's Power

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Act I

We're on the edge of the twentieth century and Mayor James Phelan of San Francisco concludes that without abundant water and electrical power San Francisco is stymied. He fixes his thirsty gaze upon Hetch-Hetchy 200 miles east, a U-shaped glacial valley in the Sierras, flat-floored and hemmed in by 2,500-foot granite cliffs. Through it flow the abundant waters of the Tuolumne River. Problem: Hetch-Hetchy lies within the bounds of Yosemite National Park, and conservationists led by John Muir vow a fight to the death to save the valley.

After an epic struggle Congress passes the Raker Act in 1913, which OKs the construction of a dam that will inundate Hetch-Hetchy. Muir dies the following year. Representative John Raker, in whose district Yosemite lies, is a progressive, a profound believer in public power. Under the terms of his act the Feds will waive Hetch-Hetchy's protected status to San Francisco. The dam must be used not only to store water but also to generate electric power. This power must be sold directly to the citizens of San Francisco through a municipal power agency at the cheapest possible rates. Publicly owned water and electric energy will free the city from what another progressive Congressman calls "the thralldom...of a remorseless private monopoly." If San Francisco does not honor the terms of the Raker Act, it will lose the federal waiver.

Act II

By the early 1920s San Francisco is watering itself with the Tuolumne, and it has built a powerhouse at Moccasin Creek to use the Tuolumne's pent-up power. It buys hundreds of miles of copper wire to run that power into the city. Pending completion of its own power lines, it agrees to sell the hydro-power to a rapidly growing utility company called Pacific Gas & Electric, which will use its grid to carry the power to San Francisco, at which point PG&E will sell the power back to the citizenry at an outrageous markup.

The camel's nose is under the tent, and there it stays. In the Roosevelt era Interior Secretary Harold Ickes fights a tenacious struggle to force San Francisco to abide by the terms of the Raker Act. PG&E's mayors, newspapers, public utility managers, city supervisors and legislators steadfastly thwart the bonds required to finance a municipally owned utility.

Years go by. The Raker Act is all but forgotten. PG&E rules supreme. In the mid-1960s a young muckraker called Bruce Brugmann comes to San Francisco. He's grown up in Rock Rapids, Iowa, a public-power town. He's gone to school in Nebraska--thanks to George Norris, a public-power state. He founds the Bay Guardian and by the late 1960s is deep into the PG&E wars. By now the utility is trying to build a nuclear power station at Bodega Bay. Joe Neilands and Charlie Smith, respectively a UC biochemist and an organizer, mount a successful battle against PG&E's plan. In the course of this campaign Neilands disinters the hidden history of the Raker Act and Brugmann publishes the story.

Act III

Let Brugmann carry our drama forward:
     "What heated me up and got me increasingly angry over the years was that this was a structural scandal of epic proportions. PG&E had stolen hundreds of millions of dollars down the years. But it was verboten to discuss PG&E publicly. The phrase is, When PG&E spits, City Hall swims. The company had wired the city, put out thousands of dollars to various civic groups. It controlled the grand jury, and to a large extent the judiciary. Then the downtown boys managed to put in at-large elections in San Francisco, meaning candidates had to raise large sums. That slowed us down for a generation.

"Finally we got district elections again. That changed the rules of the game. Now we have a more progressive board of supervisors, beholden to constituents and their districts. Then we won a sunshine ordinance. Our coalition got the 24,000 signatures last year. We dealt with each and every condition the city attorney imposed. Then, in the first district elections in years, our slate won, so we suddenly have a progressive 9-to-2 majority. At the Guardian we tied down every supe to a pledge to put a municipal utility district on the ballot and to support MUD. We finally have a pro-public power and anti-PG&E majority. Of course, we still have to win the election. PG&E is lobbying behind the scenes, putting millions into the fight, even though it's bankrupt. But for the first time in our memory nobody is running on a pro-PG&E platform."

Act III is unfinished at this time, but if ever there was a favorable moment, it's surely now. When PG&E successfully pushed deregulation through the California legislature in the mid-1990s it surely patted itself on the back for a master stroke. The public would pick up the tab for the company's vast losses in nuclear power. Nationally, the Clinton Administration was ushering in a whole new era of energy deregulation. Senator Dianne Feinstein was at PG&E's beck and call. The public-power crowd was hemmed in, and "green" outfits like the Environmental Defense Fund and Natural Resources Defense Council were actually in the vanguard of the dereg movement.

Now we have California State Attorney General Bill Lockyer pushing a criminal investigation into the conspiracy to hike energy prices. Among the big questions: Is PG&E a shark that got chewed by bigger sharks from Houston, like Enron, or did the utility simply shuffle its money elsewhere on the Monopoly board and then declare bankruptcy? Almost a century after Raker sought to write public power into the history of San Francisco, the tide may be turning, and we have long-range populist campaigners like Brugmann and his Bay Guardian to thank for it.

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