PG&E attacks consumer choice

rebeccab@sfbg.com

A ballot initiative backed by Pacific Gas and Electric Co. could amount to a death sentence for community choice aggregation (CCA) and expanded public power in California.

Dubbed the Taxpayers Right to Vote Act, the proposed initiative would require a two-thirds majority vote at the ballot before any local government could establish a CCA program, use public funding to implement a plan to become a CCA provider, or expand electric service to new territory or new customers.

The new hurdle would make it very difficult for a local government to move forward with a CCA, while at the same time making it much easier for a utility to defeat public power at the ballot.

Signed into state law in 2002, CCA allows local governments to buy up blocks of power to sell to residents, making it possible for cities and counties to set up alternatives to private utilities such as PG&E and, in many cases, to offer electricity generated by clean, renewable power sources.

The initiative is in its earliest stages, and it likely would not be placed on the state ballot until the June 2010 election. At this point, "it’s unclear how much of a campaign it’s going to be," according to Greg Larsen of the Sacramento public relations firm Larsen Cazanis, a spokesperson for the effort. "It’s a long way off."

That hasn’t stopped local CCA supporters from sounding alarm bells. "Urgent/Bad! PG&E State Ballot Measure To Kill Public Power & CCA," public power activist Eric Brooks wrote in the subject line of a widely disseminated e-mail last week. "It’s red alert time boys and girls," he wrote, saying the proposal "will kill all new Public Power and Community Choice Aggregation projects statewide."

Brooks isn’t alone: everyone the Guardian spoke with who is involved in the creation of San Francisco’s CCA voiced concern that the proposal could kill any future community choice efforts.

The proposed initiative was submitted to the California Attorney General’s office May 28 with the contact listed as the Sacramento law firm Nielsen, Merksamer, Parrinello, Mueller & Naylor, a powerful player with a long history of working with PG&E on ballot initiatives. Larsen confirmed that PG&E had provided the $200 filing fee, the only amount spent so far on the embryonic proposal.

The official proponent of the initiative is Robert Lee Pence, apparently the same person who was listed as an opponent of Proposition 80, a 2005 ballot measure that dealt with utility regulation. Opposition to Prop. 80 was heavily funded by PG&E and other utilities, and the initiative failed by a wide margin.

Pence’s group, Californians for Reliable Electricity, listed Steve Lucas as a contact on 2005 campaign documents. Lucas is also listed as the point person at Nielsen, Merksamer, Parrinello, Mueller & Naylor for questions regarding the Taxpayers Right to Vote Act.

The address listed for the organization is the same as that of Townsend, Raimundo, Besler and Usher — a Sacramento political consulting firm that also has a long history of working with PG&E on political campaigns. When asked about the PR firm’s role in the Taxpayer Right to Vote Act, Larsen acknowledged that they "may be involved as the campaign goes forward," but cautioned that any discussion so far has been preliminary.

The rationale behind the initiative is to protect taxpayers, Larsen said, because CCA programs "are major issues that communities undertake and require millions or billions of public dollars." The proposed initiative, he said, seeks to "ensure that voters — and frankly, their descendents — who will wind up being responsible for these programs have a say." If the measure passes, Larsen added, voters could still approve CCA programs — but with two-thirds of the vote, a supermajority that he contends is "staying in line with many other California requirements."

California Sen. Mark Leno, however, has a very different opinion. "I would hope that Californians would have come to understand that two-thirds vote thresholds are probably more responsible for damage to the state of California in the past 30 years than any other single factor," he said. "To hand a small minority controlling power is anti-democratic. This must be defeated." Leno also said he believes that the initiative would have drastic consequences for CCA programs if it passes.

Meanwhile, local CCA supporters say there is more to this than merely sticking up for taxpayers’ rights. If programs like Clean Power SF — the CCA initiative currently being developed in San Francisco — are fully implemented, then PG&E, which makes good money from its monopoly status, would face some actual competition. Naturally, the powerful utility would have an incentive to eliminate the alternative altogether.

Under the current system, PG&E "has to rely on the elected officials to kill CCA, and its much harder … to do that," says John Rizzo of the San Francisco Bay Chapter of the Sierra Club. But if the Taxpayers Right to Vote Act is enshrined in state law, "they could just pour in money and spread propaganda. Particularly the two-thirds requirement is just outrageous — it basically makes it impossible" to secure approval for any step toward CCA implementation.

"It’s a nasty ballot initiative," Mike Campbell, director of San Francisco’s CCA at the Public Utilities Commission, told us. "I think it’s clearly aimed at the heart of CCA." Campbell added that while he has been in discussion with SFPUC staff and others involved in hammering out Clean Power SF, he wasn’t at liberty to discuss a strategy for fighting the proposed initiative just yet.

Ross Mirkarimi, who chairs the city’s Local Agency Formation Commission — the body tasked with working in tandem with the SFPUC to implement San Francisco’s CCA — called the proposal "heinous — and yet I expect nothing less from PG&E.

"They can try to win by well-funded misinformation blitzkrieg," Mirkarimi noted. "If they’re able to spend $10 million without blinking here in San Francisco [on defeating a public power measure], they’re poised to spend tens of millions on this. As a state battleground, this elevates the fight that much more. We have to act in solidarity with other municipalities. We should be well-armed in repudiation of this effort."

There may be ways to attack the initiative in advance. The CCA legislation bars private utilities from seeking to undermine local CCA efforts. Assembly Member Tom Ammiano told us that the Legislature should look at how PG&E could be blocked from mounting a statewide effort to kill CCAs. "I think there’s some potential there," he said.

Julian Davis, who chaired the Prop. H campaign for public power last year, said he found the proposal very worrisome. "If you shut down community choice, you’re shutting down one of the major vehicles for clean energy," he said. To Davis, the initiative highlights "a disturbing trend of corporate America finding ever-more clever ways of tying the hand of local government in general. You know they’ll dump millions into this," he added. "The ultimate irony here is that none of us have the right to vote on anything PG&E does. None of us has a seat at the PG&E board table. It’s doublespeak."

Rachel Buhner contributed to this report.