San Francisco is willing to pay $2.5 billion to buy Pacific Gas and Electric Co. power lines and other related infrastructure serving the city.

Mayor London Breed and City Attorney Dennis Herrera included that price in a Friday letter to PG&E, reviewed by The Chronicle, which outlines the city’s offer for the embattled utility’s electric assets. San Francisco officials have been closely considering such a purchase since PG&E decided to file for bankruptcy protection in January, and the offer letter is their most significant step to date.

If the transaction goes through, it would be a turning point for PG&E, which would lose hundreds of thousands of electric customers in its hometown, where the company’s roots stretch back more than 150 years. The deal would also form California’s third-largest government-owned electric utility, after the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District.

San Francisco is not looking to buy any part of PG&E’s gas system.

Breed and Herrera said in a statement that their offer is the product of “detailed financial analysis conducted by industry experts and encompassing an extensive examination into the company’s assets in San Francisco.”

“The offer we are putting forth is competitive, fair and equitable,” the statement said. “It will offer financial stability for PG&E, while helping the city expand upon our efforts to provide reliable, safe, clean and affordable electricity to the residents and businesses of San Francisco.”

But a lot of unknowns hang over San Francisco’s proposal.

Chief among them is how strongly PG&E will resist the city’s efforts. Another complicating factor is a new law that will give utility regulators greater oversight.

In response to the city’s overture, PG&E spokesman Andy Castagnola provided this statement: “We all agree on the importance of continuing to serve the citizens of San Francisco with safe, clean, affordable and reliable energy. PG&E has been a part of San Francisco since the company’s founding more than a century ago, and while we don’t believe municipalization is in the best interests of our customers and stakeholders, we are committed to working with the city and will remain open to communication on this issue.”

Money for the purchase would come from a municipal power bond that voters last year agreed the city could use. Customers would pay off the debt through their electric bills, which the city thinks would remain the same or be lower than under PG&E, according to Barbara Hale, the San Francisco Public Utilities Commission assistant general manager in charge of power.

The city does not need further voter approval to carry out the transaction, Hale said, but state and federal regulators would need to sign off. San Francisco wants the deal approved as part of PG&E’s plan to emerge from bankruptcy protection, though the transition to fully government-run electric service would take longer. PG&E must resolve its bankruptcy case by the end of June to tap into a fund that will protect it from future wildfire costs.

City leaders say proceeds from the sale will help PG&E pay victims of deadly wildfires that the company’s power lines started. The city would pay a premium on the book value of PG&E’s electric equipment, and state regulators would decide how the company could use the extra money, including whether it can go to fire victims, Hale said.

“That’s part of what we think will be attractive to PG&E about this offer,” Hale said. “It helps them meet those financial obligations, because it’s cash today.”

And there probably would be costs beyond the proposed $2.5 billion purchase price, because San Francisco would be expected to pay its share of various charges PG&E recoups from city customers, Hale said.

Few major privately owned utilities in the country have been successfully turned into government-run operations, said Michael Wara, the director of Stanford University’s energy policy program. And when Sacramento sought to form its own electric utility in the 1920s, it took more than 20 years to complete — in part because of resistance from PG&E, Wara noted.

The same thing could happen to San Francisco, he said.

“The current shareholders are either going to want a price that’s very high, or they’re going to engage in delaying tactics,” Wara said. “I’m not passing judgment on the idea — I’m saying this is something that everyone in the city needs to think about as they weigh the pros and cons of municipalization.”

Another issue is how customers in the rest of PG&E’s system — including the areas where wildfire risks are concentrated — will be affected if San Franciscans no longer get their electricity from the utility.

“What that will mean is that folks who live in suburban and rural parts of California are left behind in PG&E’s system, and it’s not clear that the system is economically viable,” Wara said. “What is the impact of this on people who don’t live in San Francisco?”

Breed and Herrera’s letter said the city would recruit PG&E employees and offer them “stable careers with appealing wages and benefits.” The city plans to honor successor provisions in PG&E’s collective bargaining agreements, the letter said.

But IBEW Local 1245, the company’s largest union, has so far been opposed to the idea of San Francisco taking over part of PG&E, which could become yet another obstacle to the city’s effort.

The union has sponsored a website, sfprioritycheck.com, that details its opposition to the potential transaction and says it could cost the city $6 billion.

But the idea seems to have a lot of support in the city. Supervisor Hillary Ronen plans to introduce a resolution supporting Breed and Herrera’s letter on Tuesday, and expects to have the backing of her colleagues on the Board of Supervisors, according to city officials.

In the letter, Breed and Herrera noted that they hope to discuss the offer at a meeting with PG&E Corp. CEO Bill Johnson already scheduled for Sep. 26.

J.D. Morris is a San Francisco Chronicle staff writer. Email: jd.morris@sfchronicle.com Twitter: @thejdmorris