By Hans Hansson
Special to The Examiner
When you consider all the challenges San Francisco businesses already have to deal with — securing building permits, finding staff in the middle of the labor shortage, paying astronomical rent — these issues pale in comparison to dealing with getting service from PG&E.
Today, PG&E is holding up building projects all over town and the problem is getting worse by the day. You can blame it on COVID-19, shortness of staff, overregulation and bankruptcy. Whatever the issue, PG&E is having a serious impact on our businesses in providing the necessary power to complete projects.
Simple projects such as panel upgrades or even starting new services now take six to 12 months. To no one’s surprise, larger projects involving more complicated upgrades are taking far longer. Customer service is practically nonexistent and any customer’s ability to gauge installation time is near impossible.
Consequently, projects are left unfinished, leaving tenants and landlords on the sidelines waiting with no sign of when work will get started, let alone finished.
To further complicate matters, PG&E has regulatory measures that often are in conflict with the realities of our buildings. For example, there is a requirement to move garbage cans away from new utility installations. San Francisco has many older apartment buildings, built before the 1940s, which cannot accommodate today’s expanded garbage service needs. Most often, these older buildings have small exit corridors on the ground floor where the utility boxes often are located, along with the garbage cans.
This conflicts with PG&E’s policy that when you upgrade electrical services, you cannot have garbage cans next to new electrical panels. But several apartment buildings don’t have the space to store these large garbage bins anywhere else. Building owners will call PG&E to try to resolve the matter, but nothing happens. In the end, service cannot be provided and owners are uncertain what to do next.
In my own neighborhood, Forest Knolls, homeowners who want to upgrade electrical systems can’t do it a timely fashion. One recent renovation has been held up more than 15 months because PG&E has yet to install new power. The owners — a couple with two kids who live across the street from me — moved into a one-bedroom apartment to fix their house, as it had about 50 years of deferred maintenance. The renovation originally was scheduled for six months. Fifteen months later, PG&E is starting their power upgrade, while The City has delayed permits.
Another example: I represented a building owner who waited six months to bring in new service and finally was assigned a PG&E inspector. Things were looking up until that inspector was fired and PG&E never returned my client’s phone call to confirm a replacement. The result? Another two-month delay.
At this rate, building owners and tenants who seek major power upgrades must assume lengthy delays. Because many office building owners seek to convert their buildings to service the growing demand for life science research, they need major power upgrades and often zoning permits from The City’s planning department. This becomes a double-edged sword, with delays that can leave buildings vacant for extended periods.
The biggest problem with all of this is that there are no consequences for these delays. This is the problem with a public utility. It’s not possible for a small business owner, a commercial real estate developer or a homeowner to bill PG&E for added costs due to their delays. For commercial landlords, delays can create not only the loss of rent, but also the loss of a tenant.
One last example: I sought to bring in more power to a commercial space for a tenant’s equipment. But when the tenants learned about the power upgrade process and timing, they backed out of the deal. At a time when commercial tenants, particularly retail tenants, are needed to fill vacant storefronts, you would think there would be pressure from City Hall to require PG&E to deliver on customer service.
PG&E is a public utility and our only option. So San Francisco needs to take a proactive approach with PG&E and solve these delay issues for the sake of our businesses and homeowners. PG&E is contributing to the stalled reopening of retail businesses and the delay in completing both residential and commercial projects. The City’s leadership needs to get involved and demand changes from PG&E now.
Hans Hansson is a San Francisco native, president of Starboard Commercial Real Estate and a member of the San Francisco Chamber of Commerce.