No on Proposition 16
Ross Mirkarimi & Mark Toney
Sunday, April 18, 2010Source: the San Francisco Chronicle
There are two ways to retain customers. One is to provide top-quality service at reasonable rates. The other is to use brute force. With Proposition 16, Pacific Gas & Electric Co. has firmly committed to brute force.
Prop. 16 hijacks the initiative process, originally created to give the public a voice, to promote a purely special-interest agenda. By putting Prop. 16 on the June 8 state ballot, PG&E aims to go where no private for-profit utility company has ever gone before - to become the first corporation in history to enshrine itself in the state Constitution. PG&E has committed to spending at least $35 million of ratepayer funds to make sure it does.
Prop. 16 would require a two-thirds vote before any nonprofit utility company could enter into the energy business, but the rule would not apply to PG&E or other private utility companies that want to expand. What's so marvelously unethical about this is that Prop. 16 itself requires only a 51 percent of the vote to impose a 66 percent-of-the-vote requirement on everyone else. This is so bold that it would make Enron blush.
By requiring a supermajority vote for community-choice electricity programs, PG&E CEO Peter Darby recently explained to nervous shareholders, it will be easier and ultimately cheaper for PG&E to stop community choice aggregation efforts.
PG&E has given customers good reason to look elsewhere. PG&E rates are, on average, 20 percent higher than the state's municipal utilities, and are higher than Southern California Edison's. Every penny PG&E spends comes from customers, including shareholder profits, executive salaries, about $70 million a year in lobbying expenses and political donations, and, of course Prop. 16. Municipal utilities, with lower rates, don't charge customers for windfall profits, corporate excesses and major political initiatives like Prop. 16.
While PG&E claims its initiative is about protecting ratepayers and taxpayers, the fact is that the only complaints about the existing community-choice process are coming from PG&E, a company far less accountable to its customers than publicly owned utilities. Municipal boards are elected, and thus can be removed by voters. No publicly owned utility has ever asked customers for a penny in bailout money, much less $9 billion, as PG&E did after the deregulation debacle.
Many California local governments, including Sacramento County, the cities of Santa Clara, Alameda, Redding and Modesto, and the Merced Irrigation District, which for decades have brokered cleaner, more reliable electricity at rates cheaper than PG&E, would be paralyzed because of the two-thirds vote requirement should Prop. 16 pass.
With a guaranteed rate of return on investments and a favorable regulatory climate, PG&E has the resources to provide affordable, top-notch service. Instead, PG&E offers us a blatant attempt to purchase constitutional protection for its monopoly. PG&E is the sole funder of Prop. 16, and if it passes, PG&E will be the sole beneficiary.
The official ballot summary for Proposition 16: Requires two-thirds voter approval before local governments provide electricity service to new customers or establish a community choice electricity program using public funds or bonds. Fiscal Impact: Unknown net impact on state and local government costs and revenues - unlikely to be significant in the short run - due to the measure's uncertain effects on public electricity providers and on electricity rates.
Ross Mirkarimi is a member of the San Francisco Board of Supervisors. Mark Toney is executive director of consumer advocacy organization TURN, The Utility Reform Network. To learn more, go to noprop16.org.
This article appeared on page E - 3 of the San Francisco Chronicle