Is California's Proposition 16 a PG&E; Power Grab?

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For Californians, June 8, 2010, primary day, is quickly approaching. As it does advertisements are flooding radio and TV about Meg Whitman, Jerry Brown and Proposition 16. Proposition 16 has been labeled by proponents as the "Taxpayers Right to Vote Act," but as TreeHugger readers know, names can often be misleading. Opponents have labeled the measure the "Monopoly Protection Act.'' Instead of encouraging choice and competition, they argue that Prop16 is a power grab by a territorial Pacific Gas & Electric (PG&E;).
The proposition would require that local governments win approval from 2/3 of voters in an election before they could set up any new public power network. This would include any alternative energy or the expansion of any service into an area run by PG&E.; Prop 16 could as it is written require a vote every time a municipal utility makes a new connection to a customer.

Currently, state law gives local elected officials the right to arrange to provide electricity within their jurisdiction through a contract with an electricity provider other than an investor-owned utility. If Prop 16 passes it would provide protection in California's constitution that would benefit PG&E.;

In light of this, PG&E; has already spent $25 million pushing Proposition 16 and is prepared to spend another $10 million before Election Day. Campaign records show PG&E; as the only contributor to the 'Yes on 16' campaign. Those opposing the initiative include: consumer groups, the California Labor Federation, the League of Women Voters of California, the Sierra Club, many local elected officials, boards of municipal utilities and many newspaper editorials.

Prop 16 opponents argue that the kind of campaign money that would be needed to win a supermajority (2/3) vote over PG&E;'s objections, would destroy public power initiatives.

Customers of nonprofit municipal utilities pay an average 20 to 25% less for electricity than customers of for-profit electric utilities. For example, Santa Clara' County's Silicon Valley Power delivers cleaner power at rates that are 30 to 40% lower than PG&E;'s. In Southern California, Imperial Irrigation District has rates 14% lower than Southern California Edison.

PG&E;'s track record with its SmartMeter program has not been stellar. Customers had complained after the SmartMeters were installed their bills soared, but PG&E; initially blamed rate and usage increases. PG&E; currently acknowledges some of the meters may have been at fault.

Opponents also argue that Proposition 16 is an abuse of California's initiative system and was inspired by PG&E; losing customers to municipalities choosing to find other sources of electricity.

For example, Marin County recently became the guinea pig for these efforts in California. The Marin Clean Energy program, run by the new Marin Energy Authority, is California's first experiment with "community choice aggregation," a system under which cities or counties buy electricity on behalf of their citizens and set their own rates. Other cities are watching Marin County's efforts closely.

PG&E; fought Marin County's efforts, even threatening to cut off customers who chose public power. In 2006, PG&E; spent approximately $10 million fighting Sacramento's MUD to expand its service into Davis, Woodland, and West Sacramento. A coalition of locally owned public utilities, including the Sacramento MUD claim that PG&E; Chairman Peter A. Darbee acknowledged during a March 1 investor conference that Prop. 16 aims to "greatly diminish" attempts by communities to change their source of power and relieves PG&E; of "having to spend millions and millions of shareholder dollars" to campaign against competing energy suppliers.

Here's to hoping that the Marin Energy Authority is able to deliver affordable clean energy to its residents, and that Proposition 16 does not pass so that other counties in California and across the U.S. can follow the Marin Energy Authority's lead.

More on Public Power
San Francisco Set to Vote on Greener Public Power
More on PG&E;
PG&E; Says See You Later to Chamber of Commerce
PG&E; Turns Away from PowerMeter, Hohm and Others In Favor of Open Smart Grid Standards

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