San Francisco Public Utilities Commission Meeting – May 23, 2023

The San Francisco Public Utilities Commission (SFPUC) held a regular meeting on May 23, 2023, beginning at 9:45 AM. The commission unanimously approved a new three-year schedule of retail water and sewer rates (FY2024–2026), adopted a stormwater credit program, and set new power rates for Tuolumne County customers. The meeting included a report on the retirement of Deputy CFO Charles Pearl, an update on the Bay Area Water Supply and Conservation Agency (BAWSCA), and public testimony on rate impacts, flooding, and support for urban agriculture water rates.

Public Comments & Testimony

• Water and Sewer Rates (Items 6 & 7): Numerous members of the public spoke in opposition to the proposed rate increases, citing affordability concerns for residents, small businesses (e.g., laundromats), and fixed-income seniors. Speakers also raised issues with the accuracy of outreach, the impact of the drought surcharge (since rescinded), and the new stormwater charge. Several callers argued that the rate increases would disproportionately affect low-income communities and that the Proposition 218 process did not constitute an adequate administrative hearing.
• Stormwater Credit Program (Item 8): A resident of the Marina district testified about repeated sewage floods and urged the commission to conduct a postmortem on the Pierce Street outfall closure before approving rate increases. Other speakers expressed concerns that the stormwater charge would be duplicative of property taxes (clarified by staff as not the case).
• General Public Comment (Item 11): Representatives from the Florence Fang Community Farm, City of Dreams mentoring program, and other urban agriculture advocates requested the creation of a separate water rate category for urban farms and gardens, noting that current rates are a barrier to providing fresh food in food deserts. They highlighted conservation measures already in place and asked for policy support.
• Item Initiated by Commissioners (Item 12): A caller expressed support for developing progressive SFPUC water policies for urban agriculture, including grants and water budgeting assistance.

Discussion Items

• Retirement of Charles Pearl (Item 4): General Manager Dennis Herrera recognized Deputy CFO Charles Pearl, who retired after 15 years at SFPUC. Commissioners thanked him for his leadership in fiscal policy, green bonds, and mentoring staff.
• BAWSCA Update (Item 5): BAWSCA CEO provided an update on the Tuolumne River Voluntary Agreement (VA) process. She noted that BAWSCA submitted oral comments supporting the State Water Board's environmental review and expressed optimism that the VA could provide more flows for fish while ensuring water supply reliability. Public comment from the Tuolumne River Trust criticized the VA as insufficient and urged the commission to consider alternative water supply scenarios.
• Water and Sewer Rate Proposals (Items 6 & 7): Staff presented the proposed rate increases: 5% annually for water and 9% annually for sewer over FY2024–2026, driven primarily by capital costs (80% of increase). The sewer rate restructure includes a new stormwater charge (23% of wastewater revenues) phased in over seven years, based on impermeable surface area for most customers. An enhanced customer assistance program (up to 40% discount for lowest-income customers) was highlighted. The Rate Fairness Board chair endorsed the proposals, noting the balance between rate stability and capital needs. The commission received 351 written protests (plus 4 hand-delivered) against a universe of 177,564 property owners/customers—not a majority per Proposition 218.
• Stormwater Credit Program (Item 8): Staff detailed the new stormwater credit program, effective July 1, 2023, which allows customers to reduce their stormwater charge by installing green infrastructure (rain gardens, permeable pavement, cisterns). Credits are proportional to drainage area managed; residential customers have simplified flat-rate credit options. Existing projects under the Stormwater Management Ordinance will be automatically enrolled.
• Hetch Hetchy Power Rates for Tuolumne County (Item 9): Staff proposed a 50% increase in power rates for three customer groups (U.S. Forest Service, CA Dept. of Fish and Wildlife, and SFPUC employee housing) to move toward cost-of-service rates. The new rates are 7.5¢/kWh for USFS and 5.25¢/kWh for the other two groups. These customers represent less than 0.1% of Hetch Hetchy Power volume.

Key Outcomes

• Item 3 (Approval of Minutes): Approved unanimously (3-0).
• Item 6 (Water Rates): Motion to adopt three-year water rate schedule passed 3-0.
• Item 7 (Sewer Rates): Motion to adopt three-year sewer rate schedule passed 3-0.
• Item 8 (Stormwater Credit Program): Motion to adopt rules and regulations passed 3-0.
• Item 9 (Power Rates for Tuolumne County): Motion to adopt new power rates passed 3-0.
• Proposition 218 Determination: The commission noted that the required written protests did not reach a majority; therefore, the proposed rates could be adopted.
• Directive: Staff will follow up with the Florence Fang Community Farm to explore available assistance programs. Commissioners expressed interest in exploring water rate relief for urban agriculture and businesses serving low-income communities.