PG&E strategy: exploit voter angst to pass Prop 16 under 'voter's rights' guise

Posted on 15 April 2010

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By Dan Aiello
California Progress Report

Over the weekend California households received in their mailboxes a slick Yes on Prop 16 flier describing the initiative as a voter safeguard against local governments wanting to spend unlimited amounts to get into the energy business.

The imagery of the flier, solar panels and sunflowers, belie the $35 million dollar effort by PG&E to maintain its energy monopoly by manipulating voter's concern over government spending to impose an insidious "two-thirds" approval benchmark that is all but unattainable at the ballot box or in the state legislature to protect PG&E investors and the company's future bottom line. 

The Yes on Prop 16 flier asks voters, "Why Now?" Its response, "California is already $145 million dollars in debt," has nothing to do with Prop 16, but everything to do with the campaign's cynical strategy of tying concern over budget deficits to a yes vote for the initiative. Ironically, its the same 2/3rd's majority imposed on the California budget that has created much of the deficit issues the state faces today.  Now PG&E wants it imposed through the state constitution onto a single issue, energy. 

The initiative's 2/3rds voter approval requirement would apply both to government and to PG&E's competitors looking to introduce competition into any region or utility territory.

But Prop 16 really is not about voter choice, voter control over budgetary spending or voter say over the state's deficit. The so-called Taxpayers Right to Vote Act is more about limiting consumer choices and preserving PG&E's monopolies while preventing government from intervening over utility rates that are unjustly high. 

Decades have passed since President Franklin D. Roosevelt successfully fought utility monopolies with publicly-owned utilities, but the issue affecting the economy of the 1920's and 1930's is the same as it is today, and Prop 16's passage would effectively eliminate the government's ability to keep energy costs from decimating California's economy.

Roger Geesman, a renewable energy advocate and former member of the California Energy Commission, claims he has uncovered the truth behind PG&E's initiative by wading through the transcript of a company shareholders meeting.

Geesman blogged that PG&E chief executive officer, Peter Darbee, who earned $10.6 million dollars last year, told company shareholders that the goal of Prop 16 is to defeat local power choice "once and for all," instead of having to continually fend off the specter of customer defection. Darbee speculated that California voters would be receptive to Proposition 16 if the initiative's campaign exploited the current anti-government anger over the economy and state budget deficit.

Darbee further told shareholders: "The idea was to diminish, you know, rather than year after year different communities coming in as this or that and putting this up for vote and us having to spend millions and millions of shareholder dollars to defend it repeatedly," Darbee wrote.

"The June time frame looked ideal and in the context of ... everything that is happening with government today -- the dysfunctionality of it -- we concluded that it was a very ideal time," Darbee explained.

"The result is going to be there's going to be some flap. It will take place between now and June. And then the voters will have their ability to make their case one way or another. And then, presumably, you know, we'll mend any broken fences after that," Darbee concluded.

PG&E ratepayers who are unhappy with their current utility bills won't find anywhere on the Prop 16 flier an admission that the utility rates they are paying are helping to fund the Proposition 16 campaign. PG&E claims the $35 million is from a reduction in shareholder dividends, but that's just semantics.  All shareholder dividends first come out of the ratepayer's wallet.

Perhaps the best example of cynical politics surrounding Prop 16 is the initiative's support by former Assembly Speaker and former San Francisco Mayor Willie Brown. But opponents of the initiative note that PG&E is a major client of Brown's law firm. 

Even the California Chamber of Commerce's president, Allan Zaremberg, seems profoundly cynical in his support of the initiative: "In tough economic times like these, local voters have every right to have the final say on an issue as important as who provides them with local electric service and how much it will cost." Passage of Prop 16 would produce the opposite result for consumers. By imposing a 2/3rds voter approval on future efforts, it will effectively limit our choice of who provides us energy service and how much it will cost.


Dan Aiello writes for the California Progress Report.

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