Congress’ Plan for Free San Francisco Hydro Undercut

By Published On: June 19, 2014

As a trade-off to save the Yosemite Valley, Congress allowed the Tuolumne River to be dammed. Also under the controlling Raker Act, San Francisco was supposed to receive free electricity. President Woodrow Wilson signed the Raker Act on December 19, 1913. Section 6 forbade the sale of electrical power generated from Hetch Hetchy "to any corporation or individual, except a municipality or a municipal water district or irrigation district…" such as a private utility. In 1925, it was abruptly announced that San Francisco had run out of money and could not complete the power lines into the city. Pacific Gas & Electric’s transmission lines picked up where San Francisco’s dropped off. A National Park Service investigation determined that the sale of power was illegal under the Raker Act, but the Interior Department refused to take action on the grounds that it was only a temporary arrangement. In 1934, the New Deal Secretary of the Interior Harold Ickes filed suit to compel San Francisco to obey the Raker Act. The city argued that PG&E was its "agent" and it was not selling power to PG&E, but the U.S. Supreme Court upheld Ickes' suit in April 1940, by an 8-1 vote. Near the end of World War, San Francisco stopped supplying Hetch Hetchy power to a war-time aluminum plant and a federal court gave the city six months to comply with the Raker Act. By July 1945, a strange compromise had been achieved, in which SF contracted with PG&E to sell Hetch Hetchy energy to the Modesto and Turlock irrigation districts and also took two industrial customers from PG&E. In 1988, just-elected Mayor Art Agnos was summoned to PG&E headquarters to meet with chair Dick Clarke. He was told that PG&E controls enough votes on the board of supervisors to block any attempts to void the deals it forced on the city. —Chris Carlsson

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