Customers of the Sacramento Municipal Utility District (SMUD) are part of a small but lucky group of consumers in California. SMUD is one of 48 publicly-owned electricity companies, whose rates on average are 20% lower than the rates of for-profit utilities. But PG&E doesn’t want any more customers to enjoy the benefits of public power, and if Prop 16 passes they won’t be able to.
Prop 16 would require any city or special district that provides electricity to its customers to secure a two thirds vote prior to extending its service or serving new customers. Its effect would be to restrict the ability of a city or special district to compete with PG&E in the electricity market. According to the California Legislative Analyst, if Prop 16’ passes, “the rates charged to electricity customers might eventually be higher than otherwise.”
There is only one entity funding Prop 16: PG&E, the largest for-profit utility in the state. No other utility company has taken a position on PG&E’s ballot initiative and or contributed any funds to the Prop 16 campaign. That’s because only PG&E has anything to gain from the passage of Prop 16.
Prop 16 is BAD for business and BAD for consumers. This proposition could have significant impacts on how public utilities, such as SMUD, conduct business within their current service area. Poor drafting of the proposition could require a 2/3 voter approval before any new building or home is connected within the current service area of public power. What new company or development would want to come to your city if power connection was uncertain? This could greatly stifle economic development. PG&E’s rates are some of the highest in the country and PG&E is now requesting a $4 billion rate increase. In this tough economy, can we really afford to pay even higher rates? Public power provides some of the lowest priced energy in the State, but also is some of the greenest.
There is ONE major donor for this proposition: PG&E has spent $46 million on Prop 16. Though PG&E claims the money to fund this campaign, PGE&’s lobbying, political contributions and excessive executive bonuses comes from shareholders, the origin of the funds is clearly ratepayers. It was the shareholders who voted to approve funding, not the ratepayers. Alternatively, municipal utilities are not allowed to use ratepayer money for political purposes.
There has been a statewide outcry against Prop 16. From the AARP to the California Realtors Association, Republicans and Democrats alike, local Chambers of Commerce, environmental and consumer protection groups, all have gone on record against Prop 16. The latest opposition has come directly from the top – the California Public Utilities Commission (CPUC) President, Michael Peevy. The CPUC regulates CA electricity, gas, and telecom companies, which includes PG&E. Peevy states “In the interests of good government, fairness, and equity, Proposition 16 should be soundly defeated.”
TV and radio ads paid for by PG&E have called Prop 16, “Taxpayers Right to Vote” despite it having no bearing on taxation or government spending. In these ads, PG&E portrays public power as “big government.” Many public utilities, such as SMUD, are not government run and are owned by their customers. Municipal utility districts have governing boards that are elected by their customers, which is certainly not true of PG&E.
The truth is that Prop 16 is not about creating more democracy, it’s about creating less democracy. PG&E
CEO Peter Darbee was quite clear on a March conference call to shareholders that the idea for Prop 16 came after the Yolo county annexation attempt by SMUD. SMUD and its feisty Yolo county partners almost won that fight, despite PG&E’s outspending annexation efforts $12Million to $1M. To limit future spending against public power annexations, PG&E has come up with a constitutional amendment that would essentially stop any vote for public power from ever achieving success.
Prop 16 is a hijacking of the initiative process, originally designed to empower the voters, in service of a narrow, special interest agenda. Its passage would send a message that the California Constitution is for sale to the highest bidder. No company should be able to buy our constitution. Let’s send PG&E a message and let them know California is not for sale, stop PG&E’s power grab and vote no on June 8th.
