Eminent Domain Report

On February 3, 2020, Senator Scott Wiener (D-San Francisco) introduced Senate Bill 917 (“SB 917”), which would establish a new process for a potential government takeover of Pacific Gas and Electric Company (“PG&E”).

SB 917 would reestablish the California Consumer Energy and Conservation Financing Authority and authorize it to acquire, by eminent domain, the assets or ownership of certain electric or gas utilities that meet its criteria, including PG&E. Local publicly owned energy utilities may elect to join in the eminent domain action brought by the Authority and acquire that portion of the electrical or gas system necessary to provide service within its borders. The bill also grants bonding authority to enable the financing of the potential acquisition.

The bill also establishes the Northern California Energy Utility District, which would operate the acquired utility infrastructure and could facilitate the transfer of assets to the local publicly owned energy utilities. The District would be operated by a new entity to be incorporated as a nonprofit public benefit corporation under the bill named Northern California Energy Utility Services, which would be governed by a 7-member governing board appointed by the Governor representing the former service territory acquired through eminent domain.

Governor Newsom has recently hinted that a state takeover of PG&E was not out of the question, but has not publicly comment on the specific proposal under SB 917 yet. PG&E publicly opposes SB 917 and has responded that its facilities are not for sale. SB 917 is currently pending before the California State Senate.