Vote no on Proposition 16 - PG&E's attack on competition
PG&E wants you to vote for a constitutional amendment that would make it tougher for you to buy cleaner electricity from someone else.
The company is the sole sponsor of Proposition 16, a measure on the June ballot that would require two-thirds voter approval before cities, counties, and local power agencies could choose an alternative energy provider. The measure would also prevent existing local utilities, such as City of Alameda, Sacramento, and Silicon Valley Power in Santa Clara, from adding new customers, even within their districts, without first going to the ballot. Although PG&E refers to the measure as "The Taxpayers' Right to Vote Act", the measure provides no right to vote on PG&E expansion efforts or on its rates, among the highest in the country.
Former California energy commissioner John Geesman points out the inherent unfairness of the measure. In his blog he notes that while PG&E has a $30 million budget for the campaign, "the local governments, municipal utilities, and irrigation districts who are its targets are prohibited by law from spending anything to oppose it."
PG&E is also targeting so-called Community Choice Aggregation (CCA) programs, such as San Francisco's CleanPowerSF and Marin Clean Energy. These ambitious programs will soon provide half of the counties' electricity from renewable sources - if Proposition 16 doesn't enable PG&E to kill the programs by forcing them to the ballot and winning over a mere 34% of the voters.
This threat has not escaped the leadership of the state legislature. Last December, eight state senators, led by President Pro Tempore Darrell Steinberg, wrote to PG&E CEO Peter Darbee to voice concerns over PG&E's attack on the CCAs and clean energy: "We note that PG&E . . . today provides less renewable power as a percentage of total sales than it did when this legislation was enacted in 2000. . . . It is unacceptable for a company that is falling behind in meeting state-adopted goals for clean energy to impede the efforts of others who would attain those goals through innovative means."
PG&E has all but admitted that squelching competition is the main thrust behind Proposition 16. Last October, speaking about the ballot measure, PG&E CEO Darbee told analysts, "We are going to stand up and resist efforts to take over our customers."
With a near-monopoly stretching from Eureka to Santa Barbara, PG&E's only competition is from isolated local agencies and the few new Community Choice Aggregation programs. But Los Angeles Times columnist Michael Hiltzik believes that PG&E has reason to be afraid of these competitors. "Their fear today is that municipal utilities will undercut them on pricing and recruit their customers. That's not an unrealistic fear, as municipal utilities have consistently beaten the private utilities on rates."
Municipal utilities and CCAs may not be the only electricity providers wary of Proposition 16's anti-competitive aims. Neither of the state's other investor-owned utilities, Southern California Edison and San Diego Gas & Electric, has contributed any funding to the Prop 16 campaign. As of February, PG&E had spent $6.5 million on the measure. Commissioner Geesman pointed out the source of these funds: us. "There is not a nickel that passes through PG&E's books that doesn't ultimately derive from its customers," he said to the San Jose Mercury News.
PG&E frequently states that switching to its competition is risky. Yet PG&E customers risk getting their lights turned off more than those of other utilities. PG&E is cutting service to a staggering number of customers who are missing payments - far more than other utilities. The Los Angeles Times reported that PG&E's low-income disconnections jumped 75% in 2009 - five times the increase of San Diego Gas & Electric, and three times that of Southern California Edison. PG&E's overall disconnections rose 40%, also more than any other investor-owned or municipal utility.
Despite this and high electricity rates, PG&E has been trying to label CleanPowerSF as a "risky scheme" in mail pieces to San Francisco businesses. Such mailings by a utility violate state law. In response, San Francisco city attorney Dennis Herrera filed a petition with the California Public Utilities Commission in January. In his press release, Herrera linked the goals of clean energy and competition, "We cannot let Californians be denied the benefits of cleaner, cost-effective energy alternatives - consumer choice is simply too important to ratepayers and the environment."
Critics of Proposition 16, including the Sierra Club, consumer advocates like TURN, elected leaders, public power agencies, and newspaper editorial boards see the ballot measure as even more dangerous than PG&E's other anti-competitive efforts. The Sacramento Bee characterized Proposition 16 as a case of "a powerful special interest seizing the initiative process for its own narrow benefit." In a January editorial the paper said, "If [Proposition 16] passes, it enshrines unfair protections against competition for PG&E, one of the richest, most powerful corporations in the state, into the California Constitution."
It's now up to California voters. They'll need to see through the taxpayer-protection veneer of Proposition 16, and to perceive it for what it actually is: an attempt to permanently stifle free-market competition and expansion of the state's renewable-energy industry.
