Plot here is quite thick. SF selling power to PG&E to distribute was found illegal/in violation of the Raker Act by the US Supreme Court in 1940 in United States v. City and County of San Francisco.

SF shifted to "wheeling" instead of selling power to PG&E and is tenuously in compliance now, but the current set up was never intended when the federal government ceded water and power rights from Yosemite to SF.