Note: This is part 4 of The Frisc’s investigative series San Francisco’s Electric Future. Part 1 reveals how PG&E’s demands and tactics delay SF’s projects and raise prices. Part 2 shows how SF’s decades-long attempt to wrest control of its grid from PG&E could be resolved soon. Part 3 exposed how SF remains a key test ground for electric robotaxis, while some safety data goes unreported.
San Francisco has made it clear it wants to go electric. In December 2021, Mayor London Breed updated the city’s climate goals to achieve zero greenhouse gas emissions by 2040, doing the city’s part to stop the planetary burn from fossil fuel-emitting vehicles.
That gives San Francisco 15 years to switch cars and trucks, which account for nearly half the city’s emissions, over to electric.
There are plenty of obstacles, some beyond the city’s control. As The Frisc has reported, utility giant Pacific Gas & Electric (PG&E) controls San Francisco’s grid and often moves slowly to make upgrades. Unless SF takes over its grid, it will need PG&E’s help to support all those plug-in vehicles.
Recent political moves have also jeopardized the city’s climate goals by constraining where commercial vehicles — the constant swarm of delivery vans and trucks, and a growing number of electric robotaxis — can plug in at all. Without a place to charge, there is no electric future.
No SF agency can provide data for delivery traffic within the city, but a 2020 study cited an estimate of 3,700 delivery trucks operating in SF in 2016. Since then, parcel delivery has only boomed. Between 2019 and 2023, deliveries nationwide rose an average of 9 percent annually, according to the Pitney Bowes 2023 Parcel Shipping Index. It’s fair to assume that SF’s numbers have risen as much, if not more.
And unless San Franciscans miraculously decrease their addiction to online shopping, delivery vans going house to house are here to stay.
The path to plugging in
While Amazon, FedEx, and UPS have all discussed plans for electric vehicles, for now all those trucks puttering through our neighborhoods are gas-powered. Helping, not hindering, their electric transformation would seem to be key to a zero-emissions strategy. And that includes private fleets, whose investments would help upgrade the city’s grid, says Billy Riggs, University of San Francisco professor of engineering and policy.
“Restricting private charging is biased toward publicly-owned fleets and doesn’t evolve our municipal electrical grid – it’s short-sighted,” says Riggs.
For a short time, the path to plugging in seemed smoother. Breed’s 2021 climate update spurred a 2022 law to make fleet charging easier. It “came from a place of maintaining environmental sustainability,” SF Planning chief of staff Dan Sider tells The Frisc.
The bill allowed properties with automotive uses – including gas stations, repair shops, parking lots, and garages – to add EV charging without additional permits.
But lawmakers, spurred by union fears of jobs lost to robotaxis – another kind of commercial fleet – soon narrowed that path with new rules in 2023 and 2024. Sider cited “competing priorities,” adding that the legislative limits “may be at odds” with the city’s pledge of a greener future.
Those priorities began to diverge last year in a fight over a parking lot.
Reining in Waymo
Most of the discussion around electric vehicles is still about the future. Add city-owned vehicles to the queue: San Francisco agencies have nearly 3,000 light-duty vehicles that will need to plug in, and Muni wants to revamp its bus yards so that 1,000 buses can go electric.
There are also privately owned cars. In 2023, EVs and plug-in hybrids made up 37 percent of new vehicle sales in San Francisco. Standing in the way of wider adoption is access to charging. Officials have begun to study curbside charging as an outlet (pun intended) for drivers who won’t have access to chargers at home.
Amid all this future talk, there’s a present need too: autonomous vehicles. They have moved from around-town curiosity (with humans at the wheel) to fully fledged driverless robotaxis. Cruise was a hot mess and lost its license, but Waymo, owned by Alphabet, is a hit, with a license that allows unlimited cars on the streets. The company says it deploys at least 300, and anyone with an app can now hail a ride. More expansion is likely coming.
Since robotaxi firms are regulated by the state, SF officials have little leverage over them. They’ve still tried, denying Waymo access to the lucrative market of airport rides.
Last year, officials found another lever of control. In spring of 2023, Waymo and Cruise were waiting for the state to approve their expanded 24/7 driverless service. Waymo had also asked SF for permission to expand employee parking at its 301 Toland Street facility, tucked among warehouses in the industrial Bayshore neighborhood. Waymo had already installed chargers in the lot, thanks to the 2022 law that followed the climate plan update.
City planning staff had said yes to the parking lot expansion, but the Planning Commission still needed to sign off.
At a March 16, 2023 hearing, a Teamsters representative called in and complained: What if the lot were used for a parcel delivery service?
There was some basis for suspicion. Waymo’s state permit for limited robotaxi service also allowed “local goods delivery,” and the firm has explored driverless delivery in Phoenix as well as long-haul driverless trucks.
Planning staff responded to the Teamsters that the matter at hand was simply a parking lot expansion. Converting the site into space for robo-delivery vehicles would require a different permit and approval process.
(A Waymo spokesperson recently told The Frisc that “parcel delivery is not part of our service at the moment.”)
The commission was satisfied and approved the permit, but the Teamsters dug in their heels. UPS is their largest employer nationally. When asked, Teamsters said there are between 800 and 900 UPS employees, all of them union members, who work as delivery drivers in San Francisco. Autonomous vehicles might replace human taxi drivers, but the union wasn’t about to let robotaxis take delivery jobs, too.
An intense lobbying effort took place over three weeks in May 2023, according to public records. The Teamsters appealed the permit approval to the Board of Supervisors, taking it out of planners’ hands. Even though the original permit said nothing about parcel delivery, the supervisors unanimously rejected Waymo’s parking lot expansion on those grounds on May 23, 2023.
The fight expands
Fighting the specter of driverless parcel delivery also meant putting up barriers to fleet charging. After the supervisors granted the Teamsters’ wish and shot down the Waymo permit, there was a brief lull, but lobbying reignited in July 2023. New restrictions on fleet charging and parcel delivery began to move through City Hall.
From then to mid-April 2024, Teamsters representatives met with supervisors more than 20 times, according to lobbying reports required by law.
A Teamsters representative agreed to speak to The Frisc on background to confirm these details. He later sent a statement from Local 665 principal officer Tony Delorio that the union supports fleet charging “for responsible operators like UPS.”
Over the same period, representatives for Cruise, Waymo, and property developers interested in installing fleet charging facilities met with officials 10 times to discuss fleet charging and parcel delivery legislation.
Most of the lobbying meetings were with two supervisors, Aaron Peskin and Connie Chan, who had begun crafting changes to the planning code.
A coalition including the SF Chamber of Commerce and EVgo, a maker of charging stations, wrote in a Jan. 19, 2024 letter to the supervisors that a more complex process to install charging stations would jeopardize SF’s ability to meet “fast approaching” city and state electrification goals.
Their protests failed. Peskin and Chan added several limits. For one, they required extra “conditional use” permits – which automatically trigger a hearing and longer application process – to convert private lots and garages to fleet charging in light industrial districts (or in planning speak, “production, distribution, and repair districts”).
The conditional use permits would require studies of the potential impact of new facilities on pedestrian safety and the environment. The new rules also require companies to report the extent of AI use in their products, and divulge the amount of autonomous vehicle operation at the site compared with “human-operated activities.” These added requirements can take time to fulfill.
Another amendment makes setting up parcel delivery more difficult if it’s not a primary business. (In other words, Waymo can’t automatically add delivery to its robotaxi business.)
“These controls ensure that workers will be taken into consideration any time that a parcel delivery use is created,” said the Teamsters’ Delorio at a Feb. 26 committee meeting.
In sum, these amendments, which passed and won the mayor’s approval in March, will require more steps, more money, and more oversight for companies that want to use electric vehicles and charge them in San Francisco.
When asked if fleet charging restrictions could chase companies out of town and result in tax losses, SF Planning chief of staff Dan Sider replied, ‘Everything you’ve said was correct,’ and that SF supervisors ‘chose to legislate in this particular way.’
The Frisc reached out to Chan, Peskin, and their aides several times for this story but received no response. When reached by phone, a Peskin staff member directed The Frisc to chief of staff Sunny Angulo. She did not respond.
The SF Department for the Environment declined comment because it “was not involved in the legislation that expanded conditional use requirements for fleet charging,” said spokesperson Diedre Tanenberg via email.
The mayor’s office did not respond to requests for comment.
Unplugging a revenue stream?
With new fleet charging restrictions, SF may also hurt itself economically.
Delivery companies won’t stop transporting packages here, of course, but could the extra red tape push their facilities over the county line? Daly City (the Cow Palace) and San Bruno (the Tanforan shopping center) have acres upon acres of empty space for logistics centers and fleet charging. Asked if these moves could happen and result in a potential loss of tax revenue, SF Planning chief of staff Dan Sider replied, “Everything you’ve said was correct.”
Asked to elaborate, Sider said only that the supervisors “chose to legislate in this particular way.”
The city is already losing millions in revenue due to companies moving operations out of town. A city report released in April showed a 7.2 percent drop in tax revenue in 2023 over the prior year, and a 28 percent drop compared to before the pandemic, adjusted for inflation.
How much the city stands to lose with delivery and logistics centers moving out of town is difficult to pin down. When asked about loss of tax revenue, the city controller, tax collector, and assessor’s offices all directed inquiries to each other. The Budget and Legislative Analyst office, which does research for the supervisors, said it had never studied the possibility.
The Chan-Peskin legislation requires SF Planning to do economic impact studies for these permits. In February, after the bill became law, the department wrote that it lacked the expertise to do this analysis. It recommended this requirement be eliminated – but the supervisors kept it in.
When the Chan-Peskin restrictions kicked in, charging site applications in progress were grandfathered in. At that date, there were eight permits approved and three permits in the queue: 11 sites that don’t have to move, including a Waymo facility at 140 14th Street.
Looking elsewhere for indicators, a July 26 story in the Ventura County Star stated that the Southern California city of Oxnard gets “an extra” $17 million per year in sales tax revenues from an Amazon warehouse and fulfillment center, while neighboring cities where many of these goods get delivered receive nothing, thanks to California sales tax law.
Amazon is trying to expand its parcel delivery footprint in San Francisco. In 2020, it paid $200 million for the 6-acre property on 7th Street across the street from the Caltrain tracks. It was once a Recology property, which included waste management facilities and parking lots. Amazon has plans for a huge logistics center there, but supervisors delayed the project by 18 months in 2022. The company has been working on a new design, and SF Planning received a new application in August with plans for a 650,000-square-foot building for parcel delivery.
When asked about SF’s new charging restrictions, Lydia Krefta, PG&E’s clean energy transportation team director, says the utility is working with parcel companies and others to assess whether there are “certain areas, from a duty cycle perspective, that it makes sense to place a charging site” in SF and the Bay Area. Finding land to charge fleets will be a factor, says Krefta.
Amazon is also moving ahead with a 220,000-square-foot logistics center in San Bruno. This site would be a hub for last-mile delivery, including gig drivers who sign up with Amazon Flex using their own vehicles. They could also become hubs for Amazon’s driverless taxi service, Zoox. The service is still in the test phase, with human drivers behind the wheel in several SF neighborhoods.
We reached out to Waymo, Amazon, UPS, and FedEx to ask about fleet size and capacity. Only Amazon responded, sending a link to a blog post about their partnership with Rivian to activate 100,000 electric delivery vans nationally.
Ready to plug and play?
There’s another reason that the political fight over fleet charging is holding San Francisco back from its climate goals: The grid needs an expensive upgrade. Slowing down demand for EV charging restricts a revenue stream and incentive for those upgrades.
As we reported earlier this year, San Francisco’s grid is mostly controlled by PG&E, an uneasy arrangement that dates back a century. Whether the city succeeds in taking over or not, the commercial demand for more plug-in capacity – that is, companies willing to pay full price for service, in contrast to city agencies that pay a discount – would provide more money for broader upgrades.
Meanwhile, a capacity crunch seems imminent. PG&E told CalMatters in July that Bay Area residents are buying EVs two times faster than the utility can install chargers. But more recently, the company “is starting to keep better pace with EVs,” according to PG&E’s Krefta.
The state has an ambitious goal for PG&E and its fellow utilities: 1 million publicly available chargers statewide by 2030. So far, there are about 152,000 and counting. In other words, there’s a mandate for aggressive expansion for the public, putting strain on the grid, and that’s even before demand for commercial fleets — trucks, vans, and robotaxis – ramps up.
PG&E says they are investing $15 billion through 2032 to upgrade the grid over their whole service area. One example includes a new distribution line at the Potrero substation that will add 12 megawatts of capacity to the Hunters Point area. This could power the equivalent of 2,400 to 3,600 homes or 8 large EV charging sites. Scheduled completion is the end of 2025.
If elected officials want limits on fleet charging because the infrastructure isn’t ready, no one has made that argument publicly. Instead, the extra regulation is about jobs and, more generally, a chance to flex what smidgen of local control San Francisco can muster over traffic on its streets.
Demand for home package delivery – prime, same-day, dashed to everyone’s door – isn’t going to stop. Does San Francisco want to do all it can to build a 21st century electrical grid, encourage all those vans to switch from gas to electric as fast as possible – and keep the tax base in the city, to boot?
Or does it want to stand on principle, keep the congestion of all those vans on our streets every day, then watch them drive over the county line to recharge every night?
This series is supported by the Fund for Investigative Journalism.
The post Political Power Plays Are Short-Circuiting San Francisco’s Climate Goals appeared first on The Frisc.