It’s official: Dennis Herrera, San Francisco’s city attorney, is set to take the reins at the city’s Public Utilities Commission.
On Tuesday, the PUC’s five-member oversight committee approved Herrera’s employment contract in a unanimous vote, marking a changing of the guard at the scandal-tainted agency. According to a contract posted online, Herrera will begin work at the PUC on Nov. 1 and earn a base salary of $395,000 annually.
The approval of Herrera’s contract places the longtime city attorney in charge of the state’s third-largest municipal utility, which includes an extensive water supply network and the Hetch Hetchy reservoir. Herrera is also tasked with restoring trust in an agency marred by an ongoing federal corruption scandal, and pushing forward the PUC’s goal of expanding public power in San Francisco.
Mayor London Breed is expected to appoint a successor to the City Attorney’s office in a matter of days.
Herrera, who has served as San Francisco’s chief legal counsel since 2001, was nominated by Breed after longtime PUC head Harlan Kelly was charged with wire fraud by federal authorities and resigned in November 2020.
In the wake of Kelly’s departure, Breed said she instructed the PUC to conduct a nationwide search for a permanent replacement at the top of the agency. It’s not clear how many candidates were ultimately considered, however: Neither the PUC nor the city’s Department of Human resources responded to an inquiry about how many other candidates were considered for the job. Following Herrera’s nomination, the PUC conducted a series of closed meetings regarding the general manager position before recommending Herrera to lead the department in mid-June.
At the time of his nomination, Herrera said that he intended to usher in an era of “clean leadership” at the PUC, a city department with about 2,300 employees and a budget of $1.35 billion for the 2022 fiscal year.
“It’s an honor to have this unique opportunity to face the challenges of our time as the General Manager of the SFPUC,” said Herrera in a statement. “It’s time to further diversify our water sources, boost our water recycling, deliver a state-of-the-art seismically strong wastewater system, and buy the electric grid in the City so we can provide all San Franciscans with clean, safe, and reliable public power.”
The PUC provides water and power services to residents and businesses in San Francisco, and also sells water wholesale to three neighboring counties. Among other functions, the commission operates a large water supply system that extends from San Francisco to Yosemite, and owns the Hetch Hetchy reservoir. It also maintains water and electrical infrastructure in and around the city, and administers the CleanPowerSF program, a public utility option for customers in San Francisco.
Kelly, who managed the PUC between 2012 and 2020, was accused by the U.S. Department of Justice of a long-running bribery scheme and corrupt partnership with Walter Wong, a construction company executive and “permit expediter” who did business with various city agencies. According to the DOJ, Kelly accepted cash, trips, jewelry, free repair work and other gifts in exchange for favorable treatment in the bidding process for a PUC contract to replace street lights. The PUC pays out hundreds of millions per year in contracts to construction companies, engineering firms and other suppliers.
Under Herrera, the City Attorney’s office launched a local corruption probe and issued more than 20 subpoenas of various contractors and nonprofits that did business with the city. The Controller’s office, which worked alongside the City Attorney on the probe, expects to publish a public integrity assessment of the PUC in December 2021. That assessment is one of seven audits, either in progress or upcoming, examining the agency’s contracting and procurement process, bond expenditures and other matters.
“I’m daunted and proud by the number of audits we’re going through,” said Tim Paulson, a utilities commissioner, on Tuesday.
Herrera is an advocate for the municipalization of San Francisco’s power grid and a longtime legal adversary of PG&E, having sued the troubled utility numerous times over the years for everything from unfair business practices to polluting a San Francisco harbor.
Most recently, Herrera filed a petition with the California Public Utilities Commission, the state’s utilities regulator, to assess the value of PG&E’s local power grid. Both Breed and Herrera have signaled that one of the PUC’s top priorities is to expand public power in San Francisco.
At a press conference in July, Herrera, Maxwell, and other public officials announced a renewed push to buy out PG&E’s local assets. PG&E rejected an earlier, $2.5 billion offer by the city in 2019.
San Francisco is “confident in its ability to execute financing” for a PG&E deal, said Herrera in July, calling the utility “the poster child for a utility that puts profits ahead of people.”
It’s not clear what it would take to make any such deal happen, however: In a statement to Here/Say, PG&E called San Francisco’s efforts a “waste of time and resources” and said its assets are not for sale.