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Posted by: thepinetree on 06/05/2010 01:12 PM Updated by: thepinetree on 06/14/2010 11:10 AM
Expires: 01/01/2015 12:00 AM

Letter to the Editor – by Shaelyn Strattan

"NO on Prop 16...By now, I’m sure you’ve received enough “Vote Yes on Prop 16” mailers to paper your garage. Catchy slogans like “The Taxpayers Right to Vote Act”, “If’ you’re tired of feeling powerless over how government spends your money” and “You should have a say before local governments spend your tax dollars to get into the electricity business” are obviously intended to appeal to everyone who is concerned about how our tax money is spent. But, as Paul Harvey would have said…Now – the REST of the story....

Prop 16 would amend the California Constitution, placing many new restrictions on local public power agencies and protecting PG&E from public power rivals. The Prop 16 ads don’t explain that local agencies already can’t “spend unlimited public funds” to provide electricity…that all of California’s local public power agencies, such as SMUD, only came into being because voters approved them…or that publicly elected officials run those utilities. Prop 16 would make it nearly impossible for municipal agencies, like SMUD, to expand or come into existence in the first place, because even expansion would require an expensive public ballot measure. This would include all the costs of defending the action against attacks by PG&E, who doesn’t want to compete with the lower rates of most municipal electric companies. As intended, these excessive costs (PG&E has spent over $15 million to pass Prop 16) would effectively negate any potential savings to the ratepayers. John Geesman, former Executive Director of the California Energy Commission stated: “It’s an outrage. The measure is really just PG&E’s attempt to write its own business advantage into the state constitution.”

For example, if Prop 16 passes, any local government that wants to start up a public power agency would have to get two-thirds voter approval in any new service area. An existing public power agency that wants to expand, such as SMUD (which currently charges up to one-third less than PG&E), would also have to win a two-thirds approval on any new service area and in its existing territory, regardless of whether the utility had the funding available for the expansion or was making a profit for the city or county. This could include requiring a vote to provide electricity to a new development project or even to a single rural customer on the edge of the utility’s service territory. And cities or counties that want to employ California’s “community choice aggregation” rules to buy wholesale electricity and provide citizens with cheaper power, or a choice of power from renewable sources, would also need a two-thirds voter approval. Because of the vague language contained in the ballot measure, the two-thirds voter approval requirement might even apply to establishing charging stations for electric and hybrid cars or the development of certain kinds of solar power generating projects. The California Realtors Association has indicated they oppose Prop 16 because they fear the law could be used as a club to prevent development outside existing service areas.

While PG&E’s Initiative campaign spokesman, Andrew Souval, publicly states that Prop 16 is necessary because “[I[t gives our customers more control over how public funds are being spent,” that is not what PG&E’s CEO Peter Darbee told stockholders. He told investors that the measure was intended to keep PG&E from having to defend its territory against repeated public power expansion, citing the recent $11 million PG&E spent to defeat SMUD’s proposal to expand its service into Yolo County in 2006. Darbee indicated “[I]t is really a decision about could we greatly diminish this kind of activity for all going forward, rather than spending $10 million to $15 million a year of your (shareholders) money…”. No public utility could afford to spend that kind of money on repeated ballot measures every time it tried to upgrade or expand. It would bankrupt them and undercut the intent of a public utility, which is to save the rate payer, the taxpayer, money. It appears PG&E’s motives have less to do with democracy and more to do with shareholder profits.

There is also some question as to why the California Taxpayers’ Association (CTA) and California Chamber of Commerce (CCC) would support this proposition. Neither David Kline, VP of Communications and Research for CTA , nor Marc Burgat, VP of Government Affairs with the CCC, could cite a single case where current law was abused during the creation of a public utility in California or where a local public power agency was formed or expanded without a vote. Mr. Burgat indicated that the Chamber supports Prop 16 because “[B]usiness doesn’t want to compete with things that are subsidized by the taxpayer.” But, in fact, public utilities don’t use taxes to provide electricity; they use funds generated by the electricity rates, paid by their customers, just like PG&E (their rates are just a lot lower). Officials at the Northern California Power Agency indicate that public utilities in this region are better operated, more efficient, and have rates about 20 to 25 percent lower than PG&E’s. Where public utilities can only raise rates with a vote by their voter-elected boards, PG&E’s rate increases are approved by the Governor-appointed California Public Utilities Commission (CPUC), using formulas that guarantee a certain rate of return on the utility’s investment. The CEOs of the public utilities also don’t make seven-figure salaries. According to the Associated Press, Darbee made $9.4 million in salary and bonuses last year, 120 times the amount paid to SMUD’s general manager. Michael Boccadoro, lobbyist with the Agricultural Energy Consumers Association, suggested that “[I]f PG&E really feels strongly that people should be given a vote, maybe ratepayers should get to vote on PG&E’s rate increases.”

And the deception continues…recent mailers state that “[A]t a time of tight budgets and layoffs of police and firefighters, voters should have the right to vote on anything that affects our pocketbook.” But public power agencies are not supported by a city or county’s general fund, which provides law enforcement, fire protection, and emergency services. Every time a PG&E customer sees one of the “Yes on Prop 16” ads or receives a flyer in the mail, they should remind themselves that they are paying for that flyer or commercial. Geesman noted that “…every nickel that comes through PG&E’s books comes from its customers. When a regulated utility decides it has tens of millions of dollars to spend on a ballot campaign, it suggests something is seriously wrong with the way rates are set.” Local governments and public power agencies, on the other hand, are forbidden by law from spending taxpayer money on political campaigns. Meanwhile, as PG&E is spending over $15 million to pass Prop 16, the company has a $1 billion rate increase package for 2011 pending before the CPUC.

Don’t be fooled by the label of “Taxpayers Right to Vote Act”. This is only PG&E’s label, designed to illicit a knee-jerk “Yes” vote and appeal to our concerns about how our tax dollars are being spent. The Secretary of State refused to allow the proponents to use that name as the official title of the proposition, as it was considered to be misleading to the voting public. We have no reason to trust the motives or actions of PG&E, the architect and major funding source for Prop 16, or assume the company has our best interests at heart. Their recent installation of “Smart Meters” that raised many of our electric bills by 100-300% show PG&E’s concern for its ratepayers. Prop 16 is a scam, designed to protect PG&E’s monopoly and its territory from annexation by public power utilities with lower rates, better service, and publicly elected Boards.

Local utilities can’t afford and, in most cases, are not allowed to spend the money to fight this proposition. Therefore, it falls to us, as citizens, to make the truth of this measure known. VOTE NO ON PROP 16."

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