PG&E Tries To Put a Final Nail in the Casket of Public Power

pgeRemember 2006, at the time, PG&E spent over $10 million to prevent Yolo County from turning to SMUD for its power.  It was a complicated process in that Yolo County had to pass two initiatives and Sacramento had to approve.  

SMUD was the one time when every single official in Yolo County – every member of the city councils in Davis, Woodland, and West Sacramento and every member of the County Board of Supervisors endorsed SMUD, but they were not enough to overcome the $10 million campaign that had to rank of the most dishonest people have ever seen.  Yolo County narrowly passed one of the initiatives, the other very narrowly failed, and Sacramento overwhelmingly voted no.

Apparently that threat was either too expensive or too close, because PG&E is attempting to insure that it will never have to worry about public power again in California.

Now PG&E is backing Proposition 16, which was misleading referred to as the “Taxpayers Right to Vote” which of course is a lie because they have the right to vote now, the difference is that a majority of the voters get to decide now.  So the new title is “New Two-Thirds Vote Requirements for Public Electricity Providers.”  That ought to make it a bit more difficult.

The official ballot summary reads:

“Requires local governments to obtain the approval of two-thirds of the voters before providing electricity to new customers or expanding such service to new territories if any public funds or bonds are involved. Requires same two-thirds vote to provide electricity through a community choice program if any public funds or bonds are involved. Requires the vote to be in the jurisdiction of the local government and any new territory to be served. Provides exceptions to the jurisdiction of the voting requirements for a limited number of identified projects.”

This initiative would change the state’s consituttion to require a 2/3 vote by the people to expact a public utility into a new location.  Currently a simply majority is required.

The sole backers of this initiative… Pacific Gas and Electric.

A poll was done.  Currently, when voters are just read the ballot title and statement, only 21% of the voters support Prop. 16.  When the pollsters toss in a pro-PG&E statement from their ballot argument, “Proposition 16 would “require a city or other local government to get a two-thirds vote of its people before it could use public funds to provide or expand new electricity service to residents and business.”   The support rises to 32% in favor, 42$ opposing.

However, do not rest easy with those numbers.  PG&E has already plowed in millions into this campaign.  I do mean millions.  According to the Sacramento Business Journal about two weeks ago,

“PG&E Corp. will spend between $25 million and $35 million on its campaign to fight public power this year, according to its Securities and Exchange Commission filings released today.  PG&E Corp. will spend between $.06 and $.09 per share in shareholder money on costs “to support a state-wide ballot initiative requiring local governments to gain voter support before using taxpayer money to establish electric service,” the filings said.”

And PG&E does not fight fair either, remember this from 2006:


That mailers, spawned a united letter by the No on X backers, but PG&E did not care, they fought a campaign against SMUD arguing it would be more expensive and less green.

At the local level, the Davis City Council has taken the first step to pass a resolution opposing Proposition 16.

In 2006, the City Council voted in favor of placing measures on the ballot to allow the Sacramento Municipal Utility District to annex the Davis service area.  Following that defeat, in 2007, the Davis City Council passed a resolution in continuing support of public power.

The City Council formally expressed several concerns with the initiative.

  • The initiative is currently funded solely by PG&E, which has a clear conflict of interest. The passage of the initiative would make it much more difficult for any public power project to succeed. The 2/3 vote requirement is ordinarily designed to protect the structure of government from casual change and to protect people’s rights from capricious abuse of power. This initiative would do the opposite: it would remove the power of local government to protect itself from abuse by utility monopolies via a constitutional amendment. The initiative protects one private corporation and its current service area.
  • Contrary to assertions made by proponents of the initiative, local governments already have experience with utilities. SMUD is a good example. Therefore, the 2/3 requirement is excessive and perhaps counterproductive to the public good.
  • The SMUD Board has unanimously opposed the initiative, as has the Palo Alto City Council. Senator Lois Wolk, along with eight of her Senate colleagues, stated her concerns about Proposition 16 in a letter to the president of PG&E.
  • CCAs may want to provide power from more renewable resources than PGE, such as the case with Marin County’s new CCA. CCAs arguably give customers a choice of where their power comes from. The initiative would make it more difficult to provide customers with options such as this.
  • The Legislative Analyst’s Office concluded that the proposed initiative would create an unknown impact to state and local government costs and revenues, due to the potential impacts on electricity rates and publicly owned electric utility operations.

Nine state legislators, led by Senate President Pro Tem Darrell Steinberg (D-Sacramento), warned PG&E Chairman Peter Darbee by letter that PG&E’s actions might violate state law by interfering with the creation of new municipal power services.

Wrote Senator Steinberg, et al back in December:

“Assembly Bill 117 (Migden) was enacted (Chapter 858, Statutes 01’2002) with broad support, including the support o/your company. This legislation prohibits utility company interference with CCA and requires utilities to “COOperate fully with any community choice aggregators that investigate, pursue, or implement community choice aggregation programs.” PG&E is aware that many communities currently are examining CCA. Your efforts to erect roadblocks to communities’ pursuit of CCA can be interpreted as a violation of the statute.

PG&E’s willingness to use the initiative process to unwind 11 carefully negotiated statute that PG&E supported lacks the mutual respect and honor that the Legislature expects from stakeholders in the legislative process. If PG&E has recanted its support tor CCA, it has an obligation to seek those revisions in the Legislature. To use the initiative process to pursue PG&E’s self interests and avoid engaging your partners in the AS 117 agreement, calls into question your company’s integrity.”

Michael Hiltzik writing in the Los Angeles Times about a month ago further suggested that these are the type of efforts we will see due to the Supreme Court’s decision that granted corporations the same free speech rights as individuals and ruled that federal restrictions on corporate spending in federal campaigns were in violation and therefore discriminated against these corporations free speech rights.

Writes Mr. Hiltzik:

“The flaws in this argument were identified in a dissent by Justice John Paul Stevens. He said the law distinguishes between corporations and human beings because they’re, well, different.

Corporations can’t vote or run for office, and “their interests may conflict in fundamental respects with the interests of eligible voters,” he observed.

Their financial resources, among other things, “raise legitimate concerns about their role in the electoral process.”

If these cautionary words sound too abstract, here comes Pacific Gas & Electric to put meat on their bones.”

The bottom line is that while this may be too naked in its self-interest to spawn voter approval, although I am a less than sanguine that that line will hold after another $20 million comes out in a barrage of campaign ads that are largely unmatched in their intensity by the no side.  Still it is more difficult to get people to vote yes on an initiative, particularly when so many will be lined up on the no side.

Nevertheless if PG&E can defeat a united front of Yolo County Public Officials in 2006, it is something not to take lightly.

—David M. Greenwald reporting


About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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