California Court finds Renovated Ferry Building to No Longer Be Municipal Load

A California Appellate Court confirmed on March 27 an earlier Superior Court ruling that the iconic Ferry Building in San Francisco, a property owned and originally largely occupied by the Port of San Francisco, was no longer Municipal Load.

This is significant because the City and County of San Francisco has a contract with Pacific Gas and Electric Company (PG&E) that distinguishes between City-generated electricity at its hydro plant in Hetch Hetchy to be used for municipal purposes (Municipal Load) and electricity to be used for commercial purposes.  Originally, the power used by the Ferry Building was considered to be Municipal Load. However, PG&E has successfully argued that the use of the Ferry Building, post-renovation in 2003, has materially changed and so no longer qualified as Municipal Load.

The court agreed that the post-renovation account was no longer Municipal Load and granted declaratory relief in favor of PG&E.  The trial court will now consider what damages may be due to PG&E under a breach of contract claim.