Vote No on PG&E’s Proposition 16

pgeBy Dan Berman –

Proposition 16, sponsored by PG&E Corp., would amend our state constitution to require a two-thirds vote to replace privately owned utilities like PG&E. According to the Bakersfield Californian, Prop. 16 would erect a ‘constitutional iron curtain,’ that would freeze us into PG&E’s utility empire forever after the June 8 election.

As such, Prop. 16 is a frontal assault on the right of voter majorities to choose their electricity providers. If it passes, Prop. 16 will empower a one-third electoral minority to veto any attempt by cities or counties or irrigation districts to escape PG&E’s cold embrace and declare their energy independence.

On March 1, PG&E Corp.’s CEO, Peter Darbee, explained to a New York audience of investors and stockholders that the holding company would be spending $35 million of what he called ‘stockholders’ money’ to ‘diminish’ the need to spend $10 million or $15 million every year or two to defeat campaigns like the 2006 campaign to bring the Sacramento Municipal Utility District to Yolo County.

(PG&E Corp. is a holding company that paid Darbee $11 million last year, and its only property is the Pacific Gas & Electric Company, a regulated utility that is guaranteed 11 percent per year in profits, to which you and I pay our electric and gas bills.)

PG&E is targeting the Marin Energy Authority, which has begun to implement its green energy Community Choice Aggregation plan, and the South San Joaquin Irrigation District, which is campaigning to serve 40,000 new customers in the retail electricity business in its irrigation territory.

In regard to the latter, PG&E is terrified that South San Joaquin will follow the example of the nearby Modesto Irrigation District, because MID charges 20 percent less than PG&E, and everybody there knows it. Farmers, whose electricity usage for water pumping soars in time of drought, are especially eager to expand the public option of the irrigation districts. No wonder the Agricultural Energy Consumers Association has lined up against Prop. 16.

Smart business people choose public power. Astute observers will remember that Intel, the world’s largest computer chip producer, and a huge electricity consumer, has built its two greatest production facilities in the public power cities of Santa Clara (served by Silicon Valley Power) and Folsom (served by SMUD). Santa Clara charges 40 percent less than PG&E and SMUD charges 30 percent less.

In November 2006, Davis residents, powered by a strong grassroots campaign and a decade of public power advocacy, voted 62 to 38 percent to bring SMUD to Yolo County, but this advantage was overcome by PG&E’s $15 million media blitz. That blitz propounded the ‘big lie’ that the property to be annexed by SMUD would cost $500 million. In fact, two independent studies proved the real price was closer to $100 million – and the property itself was assessed for much less.

Too bad for us: This winter, Davis households paid $120 for a typical 750 kWh of electricity, compared to $89 SMUD customers paid in Sacramento for the same amount of electricity.

Proposition 16 is especially galling in today’s depressive economy. But PG&E’s response to economic catastrophe – in addition to Prop. 16 – has been to file for a 30 percent rate increase with the California Public Utilities Commission.

Worse yet, PG&E may be as incompetent as it is greedy. Complaints about PG&E’s $2.2 billion ‘smart meter’ program started rolling in last summer from Bakersfield and points north. A typical gripe: ‘My bill was around $170 all summer long. The ‘smart meter’ was installed and my first bill shot up to $290. I haven’t changed my power usage. This new meter is a SCAM!!! … if you have the same problem, PG&E customer service is a joke.’

This customer’s solution was to send his beef along to the California Public Utilities Commission.

At Celebrate Davis! on Thursday, while handing out hundreds of ‘No on Prop. 16’ fliers, I heard several similar complaints from Davisites whose electric bills had doubled as their consumption declined with the warmer spring weather.

‘Smart meters’ may become PG&E’s most costly technological disaster since it built Diablo Canyon nuclear power plant on an earthquake fault and famously installed some reactor components backwards. Since Diablo Canyon, no utility has dared to site a new nuke in California. Not to be deterred, PG&E is hustling to extend the life of its aging nuke’s operating permit for an extra 20 years, through 2045. So much for green power.

Opponents of Prop. 16 are legion. All the major and regional newspapers in the state, as well as the Davis City Council, the Woodland City Council, the Yolo County Board of Supervisors, the Sierra Club, TURN, AARP, the League of Women Voters, the Chamber of Commerce Coalition of Santa Clara County and many, many more have lined up against Prop. 16.

Even Mike Peevey, president of the California PUC, has questioned Prop. 16. It’s a ‘blatant misuse’ of the election process, he told the Wall Street Journal. ‘Imagine a single company trying to seek protection for its monopoly status in a state constitution. … It’s offensive.’

Yet when all is said and done, PG&E’s workers – the guys and gals who climb the poles in the rain and snow, the people who trim the trees and answer our complaints – are good, hard-working, friendly people. They deserve a lot better than their holding company bosses, who take home up to $34 million a year, while those in the trenches do the real work and have to apologize for outages and rate hikes and bankruptcies to the customers they serve.

So, please vote no on Prop. 16. You’ll be glad you did.

Davis resident Dan Berman is the author of ‘Who Owns The Sun?’ and formerly worked as a utilities analyst at the California Public Utilities Commission. To learn more, go to, or for a musical argument, try this link .  This article first appeared in the Davis Enterprise, submitted by author.

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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  1. itsme

    Dan, good statement!
    I have three points to add:
    1. An individual household may opt-out of Community Choice Aggregates (CCA), should the choice of alternative utility companies be offered. This information is from a formal statement of Marin Clean Energy (Google search). Marin began offering CCA’s this month. So there is no need for individuals to feel locked into a community decision to offer alernative energy sources. What will lock, not just individuals, but all of us into PG&E is to allow Prop 16 to pass; hence the $35 million PG$E war chest.

    2. Disucssing the pros and cons of PG&E and other methods of offering alternatives to PG&E is moot. Prop 16 is not about which utility is better. Prop 16 is only a question of whether we want to stay with PG&E forever. It really is that simple. Vote NO on 16 to keep our options open.

    3. Prop 16 is a blatant bully action by a corporation that has the money and gall to dictate to us. Are we going to allow this?

  2. David Thompson

    Thank you Dan for writing this and your life long efforts on behalf of public power.

    As we found during the campaign to do both DMUD and then join SMUD the existing laws stronly favor PG&E. However, Prop 16 gives them truly, as other say, a constitionally protected monopoly.

    Please vote no and get your friends to vote no. Competition and choice is what is needed in the utility world.

    PG&E can spend $30 million on Prop 16 but SMUD and public power groups are not legaly allowed to. What fairness!

    I agree with Alphonso about the 2/3rds requirement to pass propositions and also no proposition should be allowed to be on the ballot when it benefits corporations in a monopoly or oligopoly situation with the state.

    David Thompson

  3. davisite2

    My bill also went up this spring as the days grew longer and my electricity consumption decreased. I went down to our local PG&E office and asked if this could be part of their smart meter problem. I got a somewhat unsatisfactory explanation that it had to do with unusually cool spring weather. Dan… What exactly is the problem with the smart meters and if we are overcharged, is it picked up at the next reading with a reduced usage number?

  4. E Roberts Musser

    I’m glad I had sense enough not to install the “smart meter” when PG&E was pushing for it with endless flyers sent to my mailbox. I didn’t like the idea of some corporation reaching into my home to direct how much energy I am going to use based on their “assessment” of how much I need. There is a built in conflict of interest for them to encourage “smart meters”, since they want the consumer to use as much energy as possible to maximize their profits (unless there is an overload situation). These are “smart meters” alright, smart for PG&E, and a ripoff for customers. If I were a customer, I’d have any “smart meter” I had installed – uninstalled posthaste.

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