San Francisco Complaint Against PG&E

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DENNIS J. HERRERA, State Bar #139669

City Attorney
THERESA L. MUELLER, State Bar #172681
Chief Energy and Telecommunications Deputy
DONALD P. MARGOLIS, State Bar # 116588
WILLIAM K. SANDERS, State Bar #154156
Deputy City Attorneys
City Hall, Room 234
1 Dr. Carlton B. Goodlett Place
San Francisco, California 94102-4682
Telephone:
(415) 554-6771
Facsimile:
(415) 554-4763
E-Mail:
william.sanders@sfgov.org
Attorneys for Plaintiff
CITY AND COUNTY OF SAN FRANCISCO
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SAN FRANCISCO
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UNLIMITED JURISDICTION
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CITY AND COUNTY OF SAN

FRANCISCO, a municipal corporation,
Plaintiff,
vs.
Case No. CGC-13-529310

FIRST AMENDED COMPLAINT FOR
DECLARATORY JUDGMENT; BREACH
OF CONTRACT; NEGLIGENCE; AND
TRESPASS
PACIFIC GAS AND ELECTRIC

COMPANY, a California corporation,
Defendant.
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Plaintiff the City and County of San Francisco (City) for its First Amended Complaint
against Defendant Pacific Gas and Electric Company (PG&E) alleges as follows:
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THE PARTIES
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1.
The City is a municipal corporation organized and existing under the laws of the State of
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California.
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FIRST AMENDED COMPLAINT
CASE NO. CGC-13-529310
2.
The City is informed and believes, and thereon alleges, that PG&E is a corporation
organized and existing under the laws of the State of California with its principal place of business in
San Francisco, California.
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A.
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3.
FACTUAL ALLEGATIONS
The Agreements between the City and PG&E
1.
The 1939 Franchise Agreements
In December 1939, the Citys Board of Supervisors (Board) approved Ordinance No.
413, which granted to PG&E a franchise to introduce into, transmit, distribute and supply to the City
. . . and its inhabitants gas for every use and purpose to which it may be put (Gas Franchise). (Gas
Franchise 2 [a copy of the Gas Franchise is attached hereto as Exhibit A].)
4.
Also in December 1939, the Board approved Ordinance No. 414, which granted to PG&E
a franchise to introduce into, transmit, distribute and supply to the City . . . and its inhabitants
electricity for every use and purpose to which it may be put (Electric Franchise) (the Gas and
Electric Franchises are referred to collectively herein as Franchises). (Electric Franchise 2 [a copy
of the Electric Franchise is attached hereto as Exhibit B].)
5.
The Franchises are binding contracts in perpetuity between the City and PG&E.
6.
In the more than 70 years since the City granted the Franchises to PG&E, PG&E has
received billions of dollars from San Francisco customers for providing gas and electric service in San
Francisco.
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PG&E had gross receipts of over $1.766 billion from providing electric and gas service in
San Francisco between January 1, 2009 and December 31, 2010.

8.
In order to provide gas and electric services in San Francisco, and earn billions of dollars
of revenues from those services, PG&E must install different types of utility facilities in the public
rights-of-way.
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In the Franchises, the City granted PG&E the authority to construct, install and maintain
all pipes, poles, wires, conduits and appurtenances in the public rights-of-way that are necessary for
PG&E to provide gas and electric service, provided such construction, installation and maintenance is
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in conformity with all lawful ordinances, rules and regulations heretofore or hereafter adopted by the
Board of Supervisors . . . in the exercise of the police powers of the city. (Franchises 7.)
10. Pursuant to the Franchises, PG&E has constructed, installed, and maintains in the public
rights-of-way in San Francisco many miles of underground utility facilities and thousands of above-
ground utility poles. PG&E uses those facilities to transmit and distribute gas and electricity to the
Citys residents and businesses. PG&E also owns and maintains certain streetlights, for which PG&E
bills the City for the electricity usage.
11. Under Section 7 of the Franchises, PG&E must: (a) remove or relocate without expense
to the city any facilities installed, used and maintained under the franchise hereby granted, if and when
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made necessary by any lawful change of grade, alignment or width of any street, or by any work to be
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performed under the governmental authority of the city; and (b) pay to the City on demand the cost
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of all repairs to public property made necessary by any of the operations of the grantee.
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2.
The 1970 and 1974 Support and Work-Around Agreements (SWAP)
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12. In 1970, the Board recognized that significant delays are experienced in the progress of
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City contract work while arrangements are made by PG&E and other utility companies to remove or
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relocate their facilities.
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13. Having determined that such delays are not in the public interest, the Board approved
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Resolution No. 176-70, which authorized the Director of the Department of Public Works to enter into
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an agreement with PG&E and other utility companies to facilitate early identification of utility facility
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conflicts and a process for supporting those utility facilities and working-around such conflicts
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whenever possible.
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14. In 1970, pursuant to Resolution No. 176-70, the City, PG&E and other utility companies
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entered into a Support and Work-Around Agreement (1970 SWAP), which obligated PG&E and the
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other utility companies to: (a) identify all underground utility facility conflicts at least 90 days in
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advance of the Citys advertisement for bids on construction work; (b) provide estimates of the cost to
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support and work-around such conflicts at least 50 days in advance of the Citys advertisement for
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bids; and (c) pay to the City the cost of all associated work performed by the Citys contractor. (A
copy of the SWAP is attached hereto as Exhibit C.)
15. In 1974, the City modified the SWAP to establish a process that would be more efficient
for the City, PG&E, and other utility companies that might have to relocate their facilities to
accommodate a City project. (A copy of the 1974 SWAP is attached hereto as Exhibit D.)
16. The 1974 SWAP agreement required PG&E and other utility companies to: (a) identify all
underground utility conflicts at least 120 days in advance of the Citys advertisement for bids on
construction work; (b) provide estimates, plans, and specifications at least 30 days in advance of the
Citys advertisement; (c) contract directly with the Citys contractors for payment of support and
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work-around activities; and (d) indemnify and hold the City harmless for any loss or damage sustained
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by the City by reason of any delays after the City awards a contract arising out of the failure of the
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utility company to perform any provision of the SWAP.
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17. Because compliance with the SWAP would resolve a conflict between a City project and
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PG&Es facilities on a temporary basis, the SWAP provided PG&E with an alternate means to satisfy
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its obligations under Section 7 of the Franchise.
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B.
PG&Es Failure to Remove and Relocate its Facilities that Conflict with a Number
of City Projects
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18. On occasion, the City will determine that PG&Es existing facilities in the City conflict
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with a project being undertaken by the City pursuant to the Citys governmental authority. The City
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will then notify PG&E of the conflict and instruct PG&E under Section 7 of the Franchises that these
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conflicting facilities must be removed or relocated at PG&Es expense so that the Citys project can be
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timely commenced and completed.
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19. In the last few years, on several occasions when the City notified PG&E under Section 7
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of the Franchises of a conflict between a City project and PG&Es facilities that required PG&E to
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remove or relocate those facilities PG&E has failed to meet its obligations under the Franchises.
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20. On each of those occasions, PG&E acknowledged that its facilities were in conflict with a
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City project.
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21. On each of those occasions, PG&E has refused to remove or relocate those facilities at
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PG&Es expense despite the clear and unambiguous requirement of the Franchises.
22. In order to ensure the timely start and completion of those projects, the City has either
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paid PG&E to remove, relocate, support, or alter PG&Es facilities, or has otherwise incurred
additional costs to remove, relocate, support or alter those facilities. The City has generally made
those payments, or incurred those costs, under protest and/or pursuant to a reservation of all rights.
1.
The San Francisco Public Utilities Commission Office Building
23. The San Francisco Public Utilities Commission (SFPUC) is a City department
established under the San Francisco Charter and is responsible for providing water, wastewater, and
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electric service.
24. The City recently completed the construction of the SFPUCs new office building at 525
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Golden Gate Avenue.
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25. In 2009, to accommodate the Citys construction at 525 Golden Gate Avenue, the City
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requested under Section 7 of the Franchises that PG&E, at PG&Es expense, remove or relocate an
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underground network transformer vault that PG&E had installed on Golden Gate Avenue.
26. PG&E not only refused to remove or relocate the vault, PG&E required the City to pay
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PG&E $181,999.47 for the temporary removal of network transformer that PG&E had installed in the
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vault.
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27. In September 2011, the City paid this amount to PG&E under protest and pursuant to a
reservation of rights.
28. In addition to paying those costs, the City incurred costs of $8,255 to allow PG&Es vault
to remain in place during construction.
2.
The Chinese Recreation Center
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29. The Chinese Recreation Center is a facility operated by the Citys Recreation and Park
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Department that is located at 1199 Mason Street. The Chinese Recreation Center has been serving
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Chinatown youths since 1951.
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30. The City recently completed a $21 million renovation of the Chinese Recreation Center.
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31. During construction of the Chinese Recreation Center, the City determined that certain
utility poles PG&E had installed on Washington Street would conflict with the project because, when
the project was completed, the electric lines attached to the poles would be too close to the building, in
violation of certain State of California utility safety standards.
32. In or around February 2011, the City requested under Section 7 of the Franchises that
PG&E, at PG&Es expense, remove or relocate those utility poles to provide the legally required
separation from the new building.
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33. PG&E not only refused to remove or relocate the poles, PG&E required the City to pay
PG&E $16,767 for a rearrangement of the poles.
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34. The City made this payment under protest and pursuant to a reservation of rights.
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35. Also at the Chinese Recreation Center, in or around July 2011 the City requested under
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Section 7 of the Franchises that PG&E, at PG&Es expense, brace an existing PG&E utility pole to
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accommodate the installation of a plumbing system in the sidewalk near a PG&E guy wire.
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36. PG&E not only refused to brace the pole, PG&E required the City to pay PG&E $4,434 to
perform that work.
37. The City made this payment pursuant to a reservation of rights.
3.
The Union Square/Market Street Central Subway Station
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38. The San Francisco Municipal Transportation Agency (MTA) is another City department
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established by the San Francisco Charter. Among the MTAs responsibilities are to construct, operate,
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and maintain all of the Citys public transportation facilities.
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39. The MTA is expanding the Citys transit system by building the Central Subway Project,
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a 1.7-mile light rail line to the Chinatown area. One of the new stations for the Central Subway will
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be the Union Square/Market Street Light Rail Station.
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40. PG&E owns certain streetlights that are located on Post Street near Union Square.
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41. In order to accommodate construction of the new Union Square/Market Street Light Rail
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Station, on August 30, 2011 the City requested under Section 7 of the Franchises that PG&E, at
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PG&Es expense, temporarily remove its streetlights on Post Street. The City also requested that
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PG&E, at PG&Es expense, safely store the streetlights during the construction and reinstall the
streetlights at their original location when the site is ready.
42. The City needed the streetlights to be temporarily removed and stored, because they were
situated above the location of the new light rail station. The Citys work on the station could not
proceed unless the streetlights were removed.
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43. PG&E not only refused to remove, store, and reinstall the streetlights, PG&E required the
City to pay for a rearrangement of the streetlights.
44. Rather than pay PG&E, the MTA will incur a cost of in excess of $100,000 to remove,
store, and reinstall PG&Es streetlights. The City notified PG&E that the City would seek to hold
PG&E responsible for these costs.
4.
The North Beach Branch Library and Joe DiMaggio/North Beach

Playground
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45. The City recently began construction of the North Beach Branch Library and Joe
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DiMaggio/North Beach Playground Project, which is a joint project of the San Francisco Public
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Library and Recreation and Park Department (North Beach Project). When the North Beach Project
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is completed, there will be a new branch library and an expanded playground to serve the North Beach
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neighborhood.
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46. As part of the North Beach Project, the Board in Ordinance No. 101-11 vacated a portion
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of Mason Street between Lombard Street and Columbus Avenue in order to unite the library and park
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into one continuous park space and to expand the library onto what is now part of Mason Street.
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47. PG&E owned and maintained utility poles on the vacated portion of Mason Street.
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48. In June 2011, the City requested under Section 7 of the Franchises that PG&E, at PG&Es
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expense, remove its utility poles from the vacated portion of Mason Street so that the City could begin
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construction of the new North Beach Library.
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49. The timely removal of PG&Es poles was necessary in order to avoid construction delays
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at the new North Beach Library. Two of the poles were within the footprint of the new library.
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50. PG&E initially agreed to be responsible for the cost of removing its utility poles and
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relocating its facilities underground.
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51. Subsequently, PG&E notified the City that it would not accept responsibility for these
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costs.
52. When PG&E and the City could not resolve their dispute over which party was
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responsible for the cost of removing the existing utility poles, PG&E offered to split the cost of
removing the poles and installing new facilities underground within the vacated portion of Mason
Street.
53. The City agreed to pay PG&E $181,640 to perform this work, which was half of the total
cost, in order to avoid the expenses the City would have incurred if the construction of the new North
Beach Library had been delayed. The City informed PG&E that it was reserving its rights to claim
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that PG&E violated the Franchises.

C.
PG&Es Failure to Comply with the Terms and Conditions of the Franchises and
SWAP
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54. At times, particularly when the City is installing or replacing water or sewer pipes, the
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conflict between a City project and PG&Es facilities is only temporary in nature. Rather than
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requiring PG&E to permanently remove or relocate its facilities to resolve a temporary conflict, as
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would be required under Section 7 of the Franchises, the City has determined that it is more
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convenient and expeditious for both PG&E and the City, and less costly to PG&E, for PG&E to pay
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the City or the Citys contractors to support and work-around PG&Es facilities during construction of
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the City project through the SWAP.
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55. In the last few years, PG&E has failed to comply with the Franchises and the SWAP by
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failing to timely and accurately identify conflicts between its facilities and the Citys project and
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accepting responsibility for the applicable support and work-around costs, or relocating its facilities on
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a timely basis so the Citys projects could proceed.
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56. As a result, the City has had to terminate two construction contracts, make emergency
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repairs to its facilities, redesign parts of certain projects, and incur additional costs due to the delay in
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the completion of its projects.
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North Shore Improvement Project A&B Construction
57. The North Shore Force Main provides sewer services to the northeastern region of San
Francisco, which includes the Financial District and the Port of San Francisco.
58. In 2008, a portion of the North Shore Force Main failed, requiring emergency repairs. At
that time, the City determined that the North Shore Force Main could be subject to further failures and
needed to be replaced. For this reason, the City proceeded to design and award contracts for the North
Shore to Channel Force Main Improvement Project (North Shore Improvement Project).
59. During the design phase of the North Shore Improvement Project, and before the original
contract award, the City fully complied with the notification process, construction document exchange,
and utility identification procedures required in the SWAP.
60. On July 9, 2008, the City provided PG&E with an initial Notice of Intent (NOI) under
the SWAP for the North Shore Improvement Project. The NOI called for responses by July 16, 2008.
61. PG&E did not timely respond to the NOI as required by the SWAP.
62. On November 3, 2008, the City provided PG&E with a revised initial NOI for the North
Shore Improvement Project. The revised NOI outlined the selected alignment for the Citys utility
facilities.
63. Under the SWAP, PG&E was required to identify conflicts between the facilities the City
would construct as part of the North Shore Improvement Project and PG&Es existing utility facilities
by December 3, 2008. PG&E failed to respond to this second initial NOI.
64. On February 27, 2009, the City provided PG&E with a final NOI. The final NOI called
for PG&E to submit a response that identified all conflicts with its facilities by March 20, 2009, and to
relocate of any those conflicting utilities before the anticipated August 2009 start of project work.
65. On March 31, 2009, PG&E responded to the final NOI by providing a tabulation of
PG&Es Utilities Support and Work-Around Costs for Gas Facilities, but PG&E did not include any
drawings that would have enabled the City to identify conflicts.
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66. On April 14, 2009, PG&E further responded to the final NOI by providing a tabulation of
PG&Es Utilities Support and Work-Around Costs for Electric Facilities, but PG&E failed to identify
any conflicts that required removal or relocation of PG&Es facilities.
67. On December 18, 2009, the City awarded the North Shore Improvement Project contract
to A&B Construction (A&B). The City established February 10, 2010, as the official date for
commencement of work on the North Shore Improvement Project.
68. In April 2010, A&B began potholing along the North Shore Force Main alignment in
preparation for the excavation that was required for installation of the new sewer pipe. During the
potholing, A&B identified PG&E utility facilities that were in direct conflict with the force main
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alignment, which utility facilities prevented A&B from continuing with its work on the project.
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69. Had PG&E complied with the Franchises and SWAP, the City and A&B would have
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known of the conflict before commencing any work on the North Shore Improvement Project and the
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City would have worked with PG&E to remedy the conflict in advance of beginning construction.
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70. After the City notified PG&E of the conflict, PG&E agreed to remove the conflicting
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utility facilities from the alignment. PG&E advised the City and A&B, however, that PG&E could not
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complete this work within the time required to avoid a substantial delay in A&Bs completion of the
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North Shore Improvement Project.
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71. As a result, and to mitigate further harm to the City, the City terminated A&Bs contract.
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72. At the time of the termination, A&B had incurred costs of $1,457,343, which the City was
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required to pay under its agreement with A&B. The City received no benefit whatsoever from over
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$1,000,000 of the amount the City was required to pay A&B.
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73. This work stoppage would not have occurred, and the City would not have incurred these
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unnecessary costs, had PG&E complied with the Franchises and SWAP by providing the City with
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timely notice of the location of its conflicting facilities.
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74. In March 2012, the North Shore Force Main failed and needed immediate repairs. The
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City responded to that failure using both the Citys own employees and by issuing an emergency
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contract.
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75. The City incurred costs of $713,000 for this emergency repair.
76. This failure would not have occurred, and the City would not have incurred these
emergency repair costs, had A&B been able to proceed with the original contract for the North Shore
Improvement Project.
77. In July 2012, the North Shore Force Main failed again at a different location and needed
immediate repairs. The City responded to that failure by issuing an emergency contract in the amount
of $4.1 million.
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78. To date, the City has incurred costs of over $2.7 million for those repairs, which are still
underway.
79. The City expects that the total costs of those repairs could reach the total contract price of
$4.1 million.
80. These failures would not have occurred, and the City would not have incurred these
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emergency repair costs, had A&B been able to proceed with the original contract for the North Shore
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North Shore Improvement Project NTK Construction
81. On February 15, 2011, the City notified PG&E under the SWAP that the City intended to
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expedite a portion of the North Shore Improvement Project in the pedestrian plaza at the intersection
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of California and Drumm Streets. The City needed to expedite this construction to accommodate the
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MTAs scheduling needs related to its cable car shutdown.
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82. The City directed PG&E to identify and remove utility conflicts, if any, within that
portion of work.
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83.
PG&E failed to identify any utility conflicts that would require removal.
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84.
The City then proceeded with this portion of the North Shore Improvement Project and
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selected NTK Construction, Inc. (NTK) to perform the work.

85.
During the course of potholing to prepare for the excavation, NTK determined that a
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PG&E 12 kilovolt duct bank conflicted with this segment of the North Shore Improvement Project and
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prevented NTK from proceeding with its work.
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86.
As a result, and to mitigate further harm to the City, the City terminated NTKs contract.
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Had PG&E complied with the Franchises and SWAP, the City and NTK would have
known of the conflict before commencing any work on this portion of the North Shore Improvement
Project.
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At the time of the termination, NTK had incurred costs of $118,478, which the City was
required to pay under its agreement with NTK. The City received no benefit from the amount the
City was required to pay NTK.
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these costs, had PG&E complied with the Franchises and SWAP by providing the City with timely
notice of the location of its conflicting facilities.
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This work stoppage would not have occurred, and the City would not have incurred
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North Shore Improvement Project KJ Woods Construction
To avoid any further delays and associated costs, the City redesigned portions of the
North Shore Improvement Project and repeated the NOI process in its entirety.
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91.
The City met with PG&E and other utilities during the redesign process.
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The City directed PG&E to identify and remove utility conflicts, if any, within that
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portion of work.
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PG&E informed the City that, rather than pay for support and work-around under the
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SWAP, PG&E would incur the cost to remove the conflicting facilities in time for the City to proceed
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with the planned construction of the North Shore Improvement Project.
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94.
PG&E initially informed the City that it would complete the removal of its facilities by
November 2011. PG&E subsequently informed the City that it would take until March 2012.
95.
On April 24, 2012, the City awarded a new contract for the North Shore Improvement
Project contract to KJ Woods Construction (KJ Woods).

96.
On August 8, 2012 KJ, Woods commenced construction of the North Shore
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97.
On October 16, 2012, PG&E confirmed that a live PG&E 12 kilovolt line was located
directly in the path of the Spear Street pipe alignment, which is part of the North Shore Improvement
Project.
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The conflict between the Citys project and a live PG&E 12 kilovolt line prevented KJ
Woods from proceeding with its work on the Spear Street segment of the North Shore Improvement
Project.
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Had PG&E complied with the Franchises and SWAP, the City and KJ Woods would
have known of the conflict before commencing any work on the Spear Street segment of the North
Shore Improvement Project.
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100. As a result, the City expects to incur additional costs to redesign the Spear Street
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segment of the North Shore Improvement Project. The City could also incur additional costs if
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completion of the North Shore Improvement Project is delayed.
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101.
This work stoppage would not have occurred, and the City would not have incurred
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these costs, had PG&E complied with the Franchises and SWAP by providing the City with timely
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notice of the location of its conflicting facilities.
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D.
PG&Es Failure to Reimburse the City for Past Repair Costs and Future Costs of
Gas Pipe/Sewer Lateral dbore Investigation and Repairs
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102. The City provides sewer service to all homes and business in San Francisco. To do so,
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the City installs both mainline sewers and sewer laterals. The Citys mainline sewer is the large sewer
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pipe generally installed underneath the street. A sewer lateral is the sewer pipe that connects a home
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or business to the Citys mainline sewer.
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103. A gas pipe/sewer lateral crossbore occurs when PG&E puts a gas pipeline through a City
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sewer lateral damaging the sewer lateral.
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104. PG&E often uses trenchless directional boring when installing new gas pipelines,
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because that method is quicker and less expensive than trenching.
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105.
Trenchless directional boring involves digging a hole at the start of the new gas pipe
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alignment and another hole at the end. A directional boring machine then drills underground between
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the two holes and pulls the entire pipe segment through the trench.
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106. Trenchless directional boring often causes gas pipe/sewer lateral crossbores, because
PG&E does not know where any of the Citys sewer laterals are located.
107. Before performing trenchless directional boring, PG&E engages the services of a third
party (generally Underground Service Alert) to locate and mark all main and trunk line utilities that
will be crossed by the new gas pipe, so as to avoid damaging those facilities.
108. But PG&E does not call on Underground Service Alert or any other third party to locate
or mark the existence of sewer laterals. Furthermore, and because it uses trenchless directional boring,
PG&Es crews cannot determine during construction whether PG&Es pipe installation has damaged
any City sewer laterals.
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109. While gas pipe/sewer lateral crossbores are not an immediate safety hazard, all such
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crossbores ultimately must be repaired. The normal waste water passing through a sewer lateral will
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not harm a gas pipe, but the crossbore may cause a sewer lateral blockage that needs to be cleared.
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110. Gas pipe/sewer lateral crossbores can become dangerous if mechanical cleaning
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equipment such as augers are used to attempt to clear the blockage in a sewer lateral. These types of
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cleaning equipment can sever a gas pipe and cause a natural gas leak, which could became a serious
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safety hazard.
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111. To date, the City has incurred more than $1,200,000 for repairs to sewer laterals
damaged by PG&E crossbores.
112. In letter sent in March 2013, the City demanded that PG&E reimburse the City for all of
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the costs the City has incurred to investigate and repair sewer laterals damaged by PG&E crossbores,
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but PG&E has refused.
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113. In addition, the City has identified nearly 100 additional locations where City sewer
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laterals have been damaged by PG&E crossbores. The City is in the process of making repairs to these
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sewer laterals. The City has incurred and will continue to incur additional costs to repair these sewer
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laterals damaged by PG&E crossbores.
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114. Furthermore, PG&E has identified thousands of additional locations where PG&Es
crossbores might have caused damage to City sewer laterals. Potential repairs might be needed in
these locations too, which will cause the City to incur additional costs.
FIRST CAUSE OF ACTION
DECLARATORY RELIEF FRANCHISES
(CODE.CIV.PRO., 1060)
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115. The City repeats and realleges all of the allegations contained in paragraphs 1 through
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114 as though fully set forth herein.
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116. An actual and present controversy exists between the City and PG&E concerning
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PG&Es obligations under the Franchises.
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117. The Franchises are contracts between the City and PG&E that are enforceable under
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California law.
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118. Section 7 of the Franchises requires PG&E to remove or relocate at its own expense any
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PG&E facilities installed in the public rights-of-way that conflict with a City project.
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119. Despite its obligations to the City under Section 7 of the Franchises, PG&E has
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repeatedly failed and refused to pay the cost of removing or relocating its utility facilities when the
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City has notified PG&E that those facilities conflict with a City project.
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120. Rather than complying with Section 7 of the Franchises, in some instances PG&E has
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required the City to pay to remove, relocate, support, or alter PG&Es facilities to accommodate the
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Citys projects.
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121. In other instances, and to reduce its overall costs for a particular project, the City has
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been required to incur additional costs in order to avoid having to pay PG&E to remove, relocate,
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support, or alter PG&Es facilities that were in conflict with a City project.
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122. The City has paid PG&E, or incurred those additional expenses, in order to avoid
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additional costs that could have accrued due to delays in the Citys completion of those projects
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caused by PG&Es failure to timely remove, relocate, support, or alter its conflicting facilities as
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required under Section 7 of the Franchises.
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123. The City is entitled to a declaratory judgment that, under Section 7 of the Franchises,
PG&E should have removed, relocated, supported or altered, at PG&Es sole cost the following PG&E
facilities that conflict with a City project: (a) a network transformer vault near 525 Golden Gate
Avenue; (b) utility poles near the Chinese Recreation Center; (c) streetlights near the Union
Square/Market Street Light Rail Station; and (d) utility poles on the vacated portion of Mason Street.
124. The City is entitled to a declaratory judgment that, under Section 7 of the Franchises,
PG&E is solely responsible for all the costs the City incurred to: (a) relocate and rearrange PG&Es
network transformer located near 525 Golden Gate Avenue; (b) install alley arms on utility poles
located near the Chinese Recreation Center; (c) brace a utility pole located near the Chinese
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Recreation Center; (d) remove, store, and reinstall PG&Es streetlights near the Union Square/Market
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Street Light Rail Station; and (e) underground PG&Es utility facilities on the vacated portion of
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Mason Street.
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SECOND CAUSE OF ACTION

DECLARATORY RELIEF FRANCHISES AND SWAP
(CODE.CIV.PRO., 1060)
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126. An actual and present controversy exists between the City and PG&E concerning
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PG&Es obligations under the SWAP.
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128. One of the ways the City enforces PG&Es obligations under Section 7 of the Franchises
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is through the SWAP.
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129. When PG&E agreed to the provisions of the SWAP, contracts were established between
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the City and PG&E that are enforceable under California law.
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130. Among other things, upon notice from the City of a City construction project the SWAP
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requires PG&E to: (a) identify all underground utility conflicts in advance of the Citys advertisement
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for bids on construction work; and (b) indemnify and hold the City harmless for any loss or damage
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sustained by the City by reason of any delays after the City awards a contract arising out of PG&Es
failure to perform any provision of the SWAP.
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131. Despite its obligations to the City under the Franchises and SWAP, PG&E has failed
and refused to timely identify utility facility conflicts at the North Shore Improvement Project.
132. Due to PG&Es failure to comply with the Franchises and SWAP, the City: (a) had to
terminate two construction contracts at the North Shore Improvement Project after incurring
substantial costs; (b) has incurred millions of dollars of costs for emergency repairs of the North Shore
Force Main; (c) has incurred costs to redesign the North Shore Improvement Project or parts thereof;
and (d) may have to incur additional costs resulting from delays in completion of the North Shore
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133. The City is entitled to a declaratory judgment that: (a) PG&E failed and refused to
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timely identify utility facility conflicts at the North Shore Improvement Project as required by the
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Franchises and the SWAP; and (b) PG&E must indemnify and hold the City harmless for all costs the
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City incurred due to PG&Es failure to comply with the requirements of the Franchises and the
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SWAP.
THIRD CAUSE OF ACTION
BREACH OF CONTRACT FRANCHISES
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California law.
PG&E facilities installed in the public rights-of-way that conflict with a City project. Section 7 further
requires that PG&E pay to the City on demand the cost of all repairs to public property made
necessary by any of the operations of the grantee.
137. The City has performed all of its obligations under the Franchises.
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138. PG&E breached Section 7 of the Franchises by refusing a number of the Citys requests
to remove, relocate, support, or alter, at PG&Es expense, certain PG&E facilities that conflict with
City projects.
139. PG&E further breached Section 7 of the Franchises by failing to pay the City on demand
the cost of all repairs to public property made necessary by PG&Es operations, including crossbore
damage to the Citys sewer laterals.
140. PG&Es breaches of the Franchises have proximately caused injuries and damages to the
City including, but not limited to, the costs to: (a) relocate and rearrange PG&Es network transformer
located near 525 Golden Gate Avenue; (b) install alley arms on utility poles located near the Chinese
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Recreation Center; (c) brace a utility pole located near the Chinese Recreation Center; (d) remove,
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store, and reinstall PG&Es streetlights near the Union Square/Market Street Light Rail Station;
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(e) underground the utility facilities on the vacated portion of Mason Street; and (f) investigate and
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repair gas pipe/sewer lateral crossbores in various locations throughout the City.
FOURTH CAUSE OF ACTION
BREACH OF CONTRACT FRANCHISES AND SWAP
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California law.
144. One of the ways the City enforces PG&Es obligations under Section 7 of the Franchises
is through the SWAP.
145. When PG&E agreed to the provisions of the SWAP, contracts were established between
the City and PG&E that are enforceable under California law.
146. The City has performed all of its obligations under the Franchises and SWAP.
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147. Among other things, upon notice from the City the SWAP establishes an obligation on
the part of PG&E to: (a) identify all underground utility conflicts in advance of the Citys
advertisement for bids on construction work; and (b) indemnify and hold the City harmless for any
loss or damage sustained by the City by reason of any delays after the City awards a contract arising
out of PG&Es failure to perform any provision of the SWAP.
148. The City has performed all of its obligations under the Franchises and the SWAP.
149. PG&E breached the Franchises and the SWAP by failing and refusing to timely identify
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utility facility conflicts at the North Shore Improvement Project.

150. PG&Es breaches of the Franchises and SWAP have proximately caused injuries and
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damages to the City including, but not limited to: (a) certain of the costs incurred for A&Bs contract
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for the North Shore Improvement Project; (b) the costs incurred for NTKs contract for the North
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Shore Improvement Project; (c) the costs for emergency repairs of the North Shore Force Main; (d) the
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costs to redesign the North Shore Improvement Project or parts thereof; and (e) the costs resulting
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from delays in completion of the North Shore Improvement Project.
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FIFTH CAUSE OF ACTION

NEGLIGENCE
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152. PG&E knew or should have known of the presence of existing City sewer laterals in
areas where PG&E has been installing gas pipes.
153. Under Government Code 4215, PG&E was required to infer the existence of the Citys
sewer laterals from the presence of other visible facilities, such as buildings, meters, and junction
boxes on or adjacent to PG&Es construction sites.
154. PG&E had a duty to the City to engineer, design, construct, maintain, and manage the
installation of its gas pipes in the area of the Citys sewer laterals in order to avoid causing gas
pipe/sewer lateral crossbores or otherwise damaging the Citys sewer laterals.
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155. Had PG&E exercised reasonable care, PG&E would have discovered the Citys sewer
laterals and taken measures during the installation of its gas pipes in order to avoid causing gas
pipe/sewer lateral crossbores or otherwise damaging the sewer laterals.
156. PG&E breached its duty to the City by negligently, carelessly, unlawfully or recklessly
engineering, designing, constructing, installing, or managing the design, construction, and/or
installation of its gas pipes in such a manner as to cause gas pipe/sewer lateral crossbores and to
otherwise damage the Citys sewer laterals.
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157. As a direct and proximate result of PG&Es negligence, the City has suffered injuries
and damages.
SIXTH CAUSE OF ACTION
TRESPASS
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159. The City is and at all times relevant was the owner and/or in possession of the sewer
laterals damaged by PG&E gas pipe crossbores.
160. Without the Citys consent, and in wanton disregard of the Citys property rights,
PG&Es gas pipe installation caused gas pipe/sewer lateral crossbore and otherwise damaged the
Citys sewer laterals.
161. As a direct and proximate result of PG&Es conduct, the City suffered injuries and
damages in an amount to be proved at trial.
PRAYER FOR RELIEF
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WHEREFORE, the City prays for judgment against PG&E as follows:

1.
For a declaration that PG&E failed to comply with Section 7 of the Franchises by
failing to remove, relocate, support, or alter, at PG&Es expense, all of PG&Es utility facilities
identified in the complaint;
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2.
For a declaration under Section 7 of the Franchises that PG&E must reimburse the City
for the costs the City incurred due to PG&Es failure to remove, relocate, support, or alter, at PG&Es
expense, all of PG&Es utility facilities identified in the complaint, according to the proof at trial;
3.
For a declaration under Section 7 of the Franchises that PG&E must reimburse the City
for the costs the City incurred to investigate and repair the damage caused by PG&Es gas pipe/sewer
lateral crossbores, according to the proof at trial;

4.
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For a declaration that PG&E failed to comply with Section 7 of the Franchises and the
SWAP by failing to timely identify utility facility conflicts at the North Shore Improvement Project;
5.
For a declaration under Section 7 of the Franchises and SWAP that PG&E must
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indemnify and hold the City harmless for all costs the City incurred due to PG&Es failure to timely
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identify utility facility conflicts at the North Shore Improvement Project, according to the proof at
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trial;
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6.
For compensatory damages for breach of contract, according to the proof at trial, for
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PG&Es failure to remove, relocate, support, or alter all of PG&Es utility facilities indentified in the
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complaint, in breach of Section 7 of the Franchises;
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7.
For compensatory damages for breach of contract, according to the proof at trial, for
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PG&Es failure to timely identify utility facility conflicts at the North Shore Improvement Project, in
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further breach of Section 7 of the Franchises and breach of the SWAP;
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8.
For compensatory damages for PG&Es negligence, according to the proof at trial, for
PG&Es gas pipe/sewer lateral crossbore damage to the Citys sewer laterals;
9.
For compensatory damages for PG&Es trespass on the Citys property, according to
the proof at trial, for PG&Es gas pipe/sewer lateral crossbore damage to the Citys sewer laterals;
10.
For punitive and exemplary damages, according to the proof at trial, for PG&Es
trespass on the Citys property in wanton disregard of the Citys property rights;
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11.
For costs of suit herein;
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12.
For pre- and post-judgment interest at the legal rate;
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13.
For such other, further, and different relief as the Court deems just and proper; and
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For reasonable attorneys fees in an amount to be proven, under Code of Civil
Procedure section 1021.5, or any other applicable statute; and

15.
For trial by jury of all issues so triable.
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Dated: June 6, 2013
DENNIS J. HERRERA
City Attorney
THERESA L. MUELLER
Chief Energy and Telecommunications Deputy
DONALD P. MARGOLIS
WILLIAM K. SANDERS
Deputy City Attorneys
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By:
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WILLIAM K. SANDERS
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Attorneys for Plaintiff

CITY AND COUNTY OF SAN FRANCISCO
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San Francisco Complaint Against PG&amp;E

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San Francisco Complaint Against PG&amp;E

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1

DENNIS J. HERRERA, State Bar #139669

COUNTY OF SAN FRANCISCO

CITY AND COUNTY OF SAN

Case No. CGC-13-529310

PACIFIC GAS AND ELECTRIC

San Francisco, California.

San Francisco between January 1, 2009 and December 31, 2010.

bills the City for the electricity usage.

The 1970 and 1974 Support and Work-Around Agreements (SWAP)

relocate their facilities.

copy of the SWAP is attached hereto as Exhibit C.)

utility company to perform any provision of the SWAP.

its obligations under Section 7 of the Franchise.

The San Francisco Public Utilities Commission Office Building

Golden Gate Avenue.

The Chinese Recreation Center

Chinatown youths since 1951.

violation of certain State of California utility safety standards.

separation from the new building.

The Union Square/Market Street Central Subway Station

and maintain all of the Citys public transportation facilities.

be the Union Square/Market Street Light Rail Station.

streetlights at their original location when the site is ready.

proceed unless the streetlights were removed.

The North Beach Branch Library and Joe DiMaggio/North Beach

that PG&E violated the Franchises.

North Shore Improvement Project A&B Construction

any conflicts that required removal or relocation of PG&Es facilities.

commencement of work on the North Shore Improvement Project.

North Shore Improvement Project.

$1,000,000 of the amount the City was required to pay A&B.

timely notice of the location of its conflicting facilities.

North Shore Improvement Project NTK Construction

MTAs scheduling needs related to its cable car shutdown.

selected NTK Construction, Inc. (NTK) to perform the work.

prevented NTK from proceeding with its work.

City was required to pay NTK.

North Shore Improvement Project KJ Woods Construction

with the planned construction of the North Shore Improvement Project.

Project contract to KJ Woods Construction (KJ Woods).

On August 8, 2012 KJ, Woods commenced construction of the North Shore

Shore Improvement Project.

completion of the North Shore Improvement Project is delayed.

notice of the location of its conflicting facilities.

any City sewer laterals.

but PG&E has refused.

laterals damaged by PG&E crossbores.

SECOND CAUSE OF ACTION

failure to perform any provision of the SWAP.

damage to the Citys sewer laterals.

out of PG&Es failure to perform any provision of the SWAP.

utility facility conflicts at the North Shore Improvement Project.

from delays in completion of the North Shore Improvement Project.

FIFTH CAUSE OF ACTION

pipe/sewer lateral crossbores or otherwise damaging the sewer laterals.

engineering, designing, constructing, installing, or managing the design, construction, and/or

otherwise damage the Citys sewer laterals.

WHEREFORE, the City prays for judgment against PG&E as follows:

lateral crossbores, according to the proof at trial;

complaint, in breach of Section 7 of the Franchises;

further breach of Section 7 of the Franchises and breach of the SWAP;

For costs of suit herein;

For pre- and post-judgment interest at the legal rate;

San Francisco Complaint Against PG&E

San Francisco Complaint Against PG&E