Watch out California! PGE is attempting a slight of hand, power grab, magic trick hoping the California voters are asleep at the wheel. PG & E paid a signature gathering company who put proposition 16 on the June primary ballot in an attempt to make it law.
We firmly agree with the Oakland Tribune which editorialized for a “no” vote, saying, “Voters should not be fooled into thinking Prop. 16 is anything about improving the democratic process. It is entirely about PG&E’s financial interests and would do considerable harm to local governments’ ability to create and expand publicly owned utilities for the benefit of electricity customers. We urge voters to soundly reject Prop. 16 to protect their own pocketbooks and local choices about electricity service, and to send a message to PG&E and other special interests that the voters cannot be bought.”
California Proposition 16 (June 2010) – Reprinted from Ballot Pedia
Proposition 16, the New Two-Thirds Requirement for Local Public Electricity Providers Act is on the June 8, 2010 ballot in California as an initiated constitutional amendment.
If Proposition 16 is approved by voters, it will take a two-thirds vote of the electorate before a public agency could enter the retail power business. This will make it more difficult than it is currently for local entities to form either municipal utilities, or community wide clean electricity districts called Community Choice Aggregators (CCAs). Forming a local municipal utility or a CCA, if this measure is enacted, will require the approval, through election, of 2/3rds of the voters who live in the area of the would-be local municipal utility or CCA.
Pacific Gas & Electric is the primary financial sponsor of the initiative, having contributed $15.5 million through the end of February 2010.
The proposed constitutional amendment would require a two-thirds majority vote of local voters before a local government could:
Establish a Community Choice Aggregation (CCA) program.Use public funding to implement a plan to become a CCA provider
Expand electric service to new territory or new customers. The CCA program, established in 2002, allows local governments to purchase blocks of power to sell to residents, and to construct municipal electricity generation facilities, which means that cities and counties can become competitors to private utilities.
Ballot label details
Ballot title: Imposes new two-thirds voter approval requirement for local public electricity providers. Initiative Constitutional Amendment. Official summary: 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.Estimated 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.
PGE building in San Francisco
The name of the campaign committee sponsoring the measure is “Californians to Protect Our Right to Vote.”
The official proponent of the initiative is Robert Lee Pence, who was listed as an opponent of California Proposition 80 (2005).
Pence’s firm has been paid $62,500 for its work promoting the measure.
The California Taxpayers Association, the California Chamber of Commerce and the Oakland Jobs and Housing Coalition have signed on as endorsers of the measure.
As of March 12, 2010, utility company Pacific Gas & Electric has given $15.5 million to the campaign for a “yes” vote, and are the only donors to the “yes” campaign.
A spokesman for PG&E said in February that PG&E expects to spend somewhere between $25-$35 million on its campaign to get voters to say “yes” to Proposition 16.
PG&E, which reported a $1.22 billion profit in 2009, has notified its shareholders that the cost of contributions to the “Yes on 16” campaign will amount to about 6-9 cents per share of the stock. Company executives told shareholders they believe this is a good use of PG&E funds because otherwise, the company would have to spend “millions and millions of shareholder dollars to defend it repeatedly” every time a municipality is thinking about going the CCA route. PG&E fights against municipalities forming CCAs because when local government agencies form their own local utility districts, PG&E loses customers, thus cutting into the corporation’s long-term profitability.
Arguments in favor
Greg Larsen of Larsen Cazanis, a Sacramento public relations firm, is the paid spokesperson for the measure. He says, “Why shouldn’t the people who are going to pay the bill have the right to vote on that?”
Former Sacramento County Sheriff, Lou Blanas says “As local governments struggle to fund the most essential and basic services, local leaders in several communities are working to spend millions of public dollars or debt to get into the retail electricity business. And they do not want the people to vote on it. In tough times like these, voters deserve a voice in this decision… California voters have consistently supported sound proposals brought before them. In fact, between 2002-2008, 286 local special tax and bond measures that required a two-thirds vote were approved.”
President and CEO of the California Chamber of Commerce, Allan Zaremberg says “Requiring a vote will ensure that the complicated and risky choice to create a government-run electricity business gets the public discussion it deserves. These are long-term deals that can commit generations to hundreds of millions of dollars of debt. And to pay for them, more cuts in local programs might be required or, perhaps, even new taxes or fees. The voters need to be allowed to weigh the promises of benefits versus the real risks and costs of failure.”
Nielsen, Merksamer, Parrinello, Mueller & Naylor has been paid $213,537 through February 9. The Sacramento law firm prepared and filed the text of the initiative, and may perform other legal work on behalf of the sponsor.
Larsen Cazanis, a Sacramento public relations firm, has been paid $175,000 through February 9, 2010.
Townsend, Raimundo, Besler & Usher has been paid $435,000 through February 9 for their work.
Direct Voices, a subsidiary of Arno Political Consultants, has been paid $2,199,794 through February 9.
The Utility Reform Network. Mindy Spratt of the group says, “This is the worst kind of special interest ballot proposition. Something that would basically benefit one corporation at the expense of everybody else.”
Nine California state senators sent a letter to PG&E President Peter Darbee in which they said that they believe Proposition 16 is “misguided as a matter of public policy.” The letter was signed by senators Darrell Steinberg, Mark Leno, Jenny Oropeza, Lois Wolk, Christine Kehoe, Alan Lowenthal, Gilbert Cedillo and Dean Florez.
The editorial board of the San Francisco Guardian said on September 22, 2009 that “this is a profoundly important issue, and every elected official, city council, board of supervisors, and utility agency in the Bay Area needs to immediately come out in opposition and start organizing to defeat it.”
The Palo Alto City Council voted by 9-0 in early February to pass a resolution against Proposition 16. The city is worried that if Proposition 16 passes, it might make it harder for the city to buy new non-renewable production or transmission facilities outside its borders.
The Modesto Irrigation District voted 5-0 to oppose Proposition 16.
The initiative reduces the ability of people to choose between private and public utility companies. “It really goes to the heart of the right of people to have choices, that’s the intent of this measure. It’s horrendous”, according to Elisabeth Brinton, director of communications for the Sacramento Municipal Utility District, a public utility.
Holding local elections where people vote on whether to have a private or public utility company would be expensive.
This measure proves that California’s initiative process has become “a plaything of powerful interests using deception and misdirection to line their pockets”, according to Michael Hiltzik, a Los Angeles Times columnist.
“The Taxpayers Right to Vote Act is a dagger aimed directly at a movement to enable municipalities to offer renewable green power to their residents in competition with private utilities.”
Proposition 16 is poorly drafted, according to Tim O’Laughlin, general counsel for the Modesto Irrigation District.
The Oakland Tribune editorialized for a “no” vote, saying, “Voters should not be fooled into thinking Prop. 16 is anything about improving the democratic process. It is entirely about PG&E’s financial interests and would do considerable harm to local governments’ ability to create and expand publicly owned utilities for the benefit of electricity customers. We urge voters to soundly reject Prop. 16 to protect their own pocketbooks and local choices about electricity service, and to send a message to PG&E and other special interests that the voters cannot be bought.”
Path to the ballot
The Office of the California Secretary of State announced on January 12, 2010 that Proposition 16 had qualified for the June 8, 2010 ballot. As an initiated constitutional amendment, the supporters of Proposition 16 needed to submit 694,354 valid signatures to qualify the measure for the ballot.
The petition drive management company “Direct Voice” was hired to collect signatures to qualify the proposition for the ballot. Direct Voices is a subsidiary of Arno Political Consultants. They were paid $2,199,794 through February 9 to collect signatures to qualify the measure for the ballot.