PG&E

PG&E’s history of blowups

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By Noah Arroyo

We don’t yet know if the San Bruno fire is a horrific accident or an equally horrific mistake. But Pacific Gas and Electric Company, which owns and operates the gas line that ruptured, has a history of incidents that look a lot like this one. Some of these incidents have caused power outages. Others have blown things up, or injured people.

The company also has a history taking money that ought to go to maintenance and diverting it into fat corporate profits.

In December of 2003, a cable fire at the Mission Substation of the Golden Gate Control Center caused a more than 100,000 people to lose power. The California Public Utilities Commission inspected the incident and found that PG&E suffered from general procedural laziness, and that “PG&E failed to follow three recommendations made in its 1996 Root Cause Analysis Report following [a] 1996 fire.”


At the time, San Francisco City Attorney Dennis Herrera noted: “The evidence is clear that PG&E knew about problems that endangered public safety and threatened to cost San Francisco businesses millions—and yet did nothing to fix them.”

Then, in August 2005, something exploded underground the intersection of Kearny and Post. A manhole cover shot into the air and the escaping fire severely burned a passer by. The event’s catalyst was a failed transformer, owned and operated by PG&E.

In June last year, a fire peeked and then roared from a manhole with enough force to resemble an explosion to onlookers. The electrical fire, at O’Farrell and Polk, was coming from a PG&E vault. The impact? 8,600 customers lost power. This, like Thursday’s fire at San Bruno, was a fire bigger and more resilient than what emergency responders at first assumed. At least in 2009, nobody died.

Another difference: In 2009, leading up to the explosion, PG&E didn’t know about the problem beforehand.

Why hadn’t PG&E replaced this natural gas pipe (the San Bruno fire’s origin) since its installation in 1948? Was the problem one of cost? If so, would replacing such a pipe cost more than the $46 million the company spent trying to push Proposition 16 in June’s election?

Or could this be a replay of the Rough and Ready fire of 1994?

That year, an inferno raged through the small Nevada County town, destroying a dozen homes and causing $2 million in damage. The cause of the fire? Tree limbs that PG&E was supposed to trim brushing against the company’s power lines.

The local district attorney sued, and during the trial, evidence came to light that PG&E had taken $80 million from ratepayers — money that was supposed to be used for tree trimming — and diverted it to executive salaries and to pad the bottom line.

The company was found guilty of criminal negligence and fined $2 million.

So if PG&E in fact failed to maintain its facilities, at great cost to the public, it wouldn’t be the first time.

 

No smart meters in SF

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EDITORIAL Smart meters are a dumb idea. That’s what The Utility Reform Network says, noting that the high tech devices are expensive (California utilities, including Pacific Gas and Electric Co., will be charging consumers $5.4 billion to install the meters), don’t save energy or money, and can lead to privacy risks. PG&E bills have soared unexpectedly in places where the meters have been installed in the past year, forcing an investigation by the California Public Utilities Commission, which concluded on Sept. 2 that the meters are okay, but PG&E’s customer service isn’t. Still, TURN and other experts say the report is inconclusive, and state Sen. Dean Florez (D-Shafter) wants legislative hearings before any more meters are installed.

San Francisco hasn’t faced the smart meter problem yet since the utility hasn’t been installing them here — but that will start soon enough, now that the CPUC (never known as a harsh critic of PG&E) has given the green light. TURN is urging customers to boycott the meters, so the San Francisco supervisors should tell PG&E that the city doesn’t want this flawed technology.

Smart meters are supposed to make it easier to save energy. The idea is that the devices will not only track how much electricity a customer is using, but give that customer the ability to monitor usage at different points in the day and cut back during peak periods.

But to take advantage of the gadgets, a customer would have to buy a bunch of expensive gear on the side — communications devices, thermostats, computer chips for energy-intensive appliances, etc. PG&E isn’t going to pay for that stuff.

Meanwhile, the "smart" part of the meter sends information about your energy usage through a wireless signal. Privacy advocates worry about that (as do people concerned with having yet another device in the house emitting low-frequency radiation).

And while PG&E denies that there are any problems with the accuracy of the meters, huge numbers of people in areas where they’ve been installed have reported huge — and otherwise inexplicable — hikes in their monthly bills.

So for most residents and small businesses, smart meters are just going to be a pain in the ass — a questionably accurate, potentially dangerous, and otherwise worthless device that PG&E is making money from by installing.

TURN has advice on its website (turn.org) for people who want to boycott the meters: to tell PG&E to leave the existing meters in place. If you put a sign on your meter saying you don’t want it changed — and if you tell the person coming to replace it that you don’t want a smart meter — you may stave off the new product for a while.

But San Francisco is in the process of creating a community choice aggregation (CCA) system that will put the city for the first time in the business of delivering retail electric power. That ought to give the city some authority over how local meters are going to operate — and at the very least, the city should tell PG&E to back off until CCA is in place and the city can do its own independent study.

The supervisors should ask City Attorney Dennis Herrera to investigate what authority the city has to block PG&E from installing smart meters, and to look at how the new CCA might avoid including the cost of the devices in the rates local customers pay for power. At the very least, the board can endorse the boycott and urge the CPUC to keep smart meters out of the city. Candidates for local office should oppose the smart meters. And if PG&E wants to force the issue, city officials just need to remind the utility that its local monopoly is illegal, that San Francisco has a federal mandate for public power, and that just three months ago, 68 percent of the city’s voters said they wanted to preserve a public power option.

PG&E CEO paints a rosy picture for CPUC

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Pacific Gas & Electric CEO Peter Darbee’s address to the California Public Utilities Commission yesterday focused on his company’s national reputation as a corporate advocate for addressing climate change, largely ignoring PG&E’s $46 million waste of ratepayer money supporting June’s failed Proposition 16, which was designed to expand the utility’s monopoly in California and thwart local renewable power projects.

CPUC President Michael Peevey warmly introduced Darbee to the crowd, calling the CEO an upfront thought leader on climate change — a very different message from the same man who harshly criticized PG&E’s spearheading of Proposition 16 before its defeat in June.

“There is something fundamentally wrong with the idea that one company, spending $35 million can, by majority vote of the electorate, seek and obtain a two-thirds vote protection in our State Constitution,” Peevey wrote in an opinion published in the San Jose Mercury News in May. “The purpose of the Constitution is to protect our sacred rights as citizens. It is not to protect the narrow private interests of a particular utility company.”

Darbee’s only comment on Proposition 16 came near the end of his speech, when he attempted to justify PG&E’s spending on failed campaign that some have said should have cost Darbee his job. Referring to the company’s regular opposition to public power campaigns, he said, “$45 million versus $15 million a year – financially it made sense.” But it wasn’t news to anyone that PG&E had an economic interest in essentially killing public power start-ups.

Instead, the CEO chose to focus PG&E efforts in Washington D.C. to nationally address climate change and his company’s support of AB 32, a 2006 law that requires California to reduce its greenhouse gas emissions to 1990 levels by 2020, and PG&E’s opposition to Proposition 23, a November ballot initiative that would freeze AB 32 until California’s unemployment levels drop below 5.5 percent and stay there for at least one year – a rare occurrence in modern economies.

Local environmental activists call PG&E’s purported concern over climate change greenwashing and hypocrisy. “That’s complete crap,” San Francisco Green Party Sustainability Chair Eric Brooks told the Guardian. “For them to claim that they’re a green company is a joke. They do the same thing that tobacco companies used to do; they spread a little money around supporting renewables that aren’t even part of their energy portfolio.”

Brooks said that AB 32’s mandates were flexible enough not to really harm PG&E’s profit margins, so the company can oppose Proposition 23 without impacting its bottom line. Steven Maviglio, spokesman for No on 23 — Stop the Dirty Energy Proposition told the Guardian PG&E had reported no contributions opposing Proposition 23, a far cry from the more than $46 million the company spent championing Proposition 16 in June.

“Thing about Prop. 23 is [that] AB 32 doesn’t really box them in,” Brooks told us. “If we switch to localized, renewable energy, that puts PG&E out of business. Prop 16 would have been much more effective at eliminating green energy in California than anything else like Prop 23.”

Yet the main controversy aired at the CPUC meeting wasn’t about greenwashing or Prop. 16, but smart meters. About a dozen protesters gathered at the steps of the California Public Utilities Commission before Darbee started speaking. The group is concerned about PG&E’s construction of a “smart grid” of wirelessly transmitting electronic meters critics say can cause cancer due to electromagnetic radiation as well as immediate discomfort for those who are electrically sensitive.

Joshua Hart of Scotts Valley Neighbors Against Smart Meters interrupted Darbee near the beginning of his speech. “Mr. Darbee, your smart meter program is a false solution to climate change,” Hart shouted as he presented Darbee with a “dumb meter,” a cardboard box with photos of smart meters pasted to it in which the word “smart” was replaced with the word “dumb,” Hart told the Guardian.

Hart was escorted out by a CHP officer, but he was not arrested or cited. Darbee finished his opening remarks before addressing first concerns about false billing information that had been transmitted by a small percentage of the more than 6 million smart meters already installed in California, then radiation generated by the devices.

Darbee said residents of Bakersfield were confused about rate tiers in July 2009, which had more days with temperatures exceeding 100 degrees than the year before, but he insisted the meters were not to blame for high energy bills.

However, PG&E has acknowledged that some of its new smart meters malfunctioned and were broadcasting energy usage reports that resulted in higher bills for consumers. But the company insists that less than 1 percent of installed smart meters have malfunctioned.

San Francisco City Attorney Dennis Herrera petitioned the CPUC in June to immediately halt installation of smart meters until state regulators conclude an investigation into whether the meters are accurate. The CPUC has not stopped PG&E from installing the devices.

“This is Peevey’s legacy,” Hart told the Guardian referring to CPUC President Michael Peevey, “a ‘smart grid’ in California.”

Darbee next addressed the electromagnetic radiation generated by the smart meters’ wireless transmissions by describing a comparison PG&E did between the new meters and cell phones.

“Let’s be conservative,” he told the crowd. “Let’s assume the smart meter is 10 feet away, and there are no walls between you and the smart meter, which of course there are. And let’s assume the person is only on the cell phone 10 minutes per day … If you live in a home with a smart meter, you have to live in that home for 13,000 years before it compares to your use of a cell phone for one year.”

But Hart rejected PG&E’s study and said he didn’t believe the Federal Communication Commission’s limits on electromagnetic radiation were actually safe. “The FCC regulations on EMF [electromagnetic field] safety were written by the telecommunications industry,” Hart told the Guardian. “If the smart meters were being installed in Russia, they would be illegal.”

Sebastopol resident Janhavi Hubert attended the protest and speech as a representative of people who are “electronically sensitive.” “When they put a smart meter on my neighbor’s house 25 feet away, I didn’t expect to feel anything,” Hubert told the Guardian. “I had heart palpitations, which I’ve never had before, heart arrhythmia, and headaches, and when I go away from the house, it goes away.”

Rebecca Bowe contributed to this report.

SFBG Radio: A glorious future without PG&E

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In this week’s episode, Johnny and Johnny talk asinine budget impasse, Americans suckered into voting against their interests and a glorious future without PG&E.

 

VenomClassWarScrewPGE by jangel

Alerts

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alert@sfbg.com

THURSDAY, AUG. 5

Power on


Gather with the public power supporters and advocates who brought us the No on 16 campaign, which blocked PG&E’s attempt to solidify its monopoly. Attend a workshop that will analyze the campaign and election victory, discuss current challenges to public power, and find common ground for the future push for true power to the people. The workshop is followed by a festive buffet, awards ceremony, music, and more.

1 p.m. workshop, 5:30 p.m. party; free

The Merchants Exchange Building

465 California, SF

www.celebrateno16.org

Zero waste lunches


Learn about the impact that your daily lunches have on the environment and become more informed about the amount of waste created by takeout food and prepackaged lunches. Find out how you can change your habits, including what to buy at farmers markets and how to pack your food to create zero- waste lunches.

Noon, free

Green Zebra Environmental Action Center

Suite 9, 50 Post, SF

www.thegreenzebra.org

FRIDAY, AUG. 6

Worker Cooperative Conference


The public is invited to attend this national conference on the increasingly celebrated concept of worker cooperatives (think Cheeseboard and Arizmendi). Workshops and speakers will look at worker cooperatives as a remedy for larger social and economic problems such as job loss and environmental damage and will present innovative approaches to common challenges cooperative businesses face in accountability and management, financing, governance, vision, and growth.

Fri. 9 a.m.–midnight, Sat. 9 a.m.–11 p.m.;

Sun. 9 a.m.–5 p.m.; $90–$300

Clark Kerr Conference Center

UC Berkeley

2601 Warring, Berk.

www.usworker.coop

SATURDAY, AUG. 7

"Choking on Oil"


Get together with others who are frustrated by the BP oil spill catastrophe and learn about the surrounding issues at this networking performance featuring poets, artists, special guest speakers, and a silent auction to help raise funds for charities. Hosted by Out of Our poetry magazine.

7 p.m., free

Viracocha

998 Valencia, SF

www.outofour.com

Lantern ceremony


Commemorate the 65th anniversary of the atomic bombing of Hiroshima at this Japanese-style peace event. Participants are invited to decorate candlelight peace lanterns that will be floated at sunset during a ceremony that includes reading a message sent by the mayor of Hiroshima and Japanese bamboo flute music. Materials provided.

6:30 p.m., free

Berkeley Aquatic Park

Addison at Bolivar, Berk.

(510) 595-4626

TUESDAY, AUG. 10

Chew on this

Examine the journey our food takes before it reaches our plates, in what ways the supply chains are broken, and what we can do to fix it. Hear about food justice best practices from local professionals, experts, and activists using a labor perspective. Presented by Pursue: Action for a Just World.

6:30 p.m., $10

Local Mission Eatery

3111 24th St., SF

www.fruitsofourlabor.eventbrite.com

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 437-3658; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

Deal time

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sarah@sfbg.com

Lennar Corp.’s massive redevelopment plan for Candlestick Point-Hunters Point cleared a critical hurdle July 14 when the Board of Supervisors voted 8-3 to affirm the Planning Commission’s certification of the project’s final environmental impact report, with Sups. John Avalos, Chris Daly, and Eric Mar opposed

Board President David Chiu called the vote "a milestone." Termed-out Sup. Sophie Maxwell, whose District 10 includes Candlestick Point and the former Hunters Point Naval Shipyard, saw the vote as evidence that city leaders support the ambitious plan. Yet many political observers saw the vote as proof that Lennar and its Labor Council allies have succeeded in lobbying supervisors not to support opponents of the project.

"I’m concentrating on pushing this over the finish line," Maxwell said at the hearing in the wake of the vote, which came in the wee hours of July 14 after a 10-hour hearing. Supervisors can still amend Lennar’s development plan during a July 27 hearing and project opponents are hoping for significant changes.

Mar said he wants to focus on guaranteeing that the city has the authority to hold Lennar responsible for its promises. "I want to make sure that we have the strongest enforcement we can," he said.

Lennar’s plan continues to face stiff opposition from the Sierra Club, the Golden Gate Audubon Society, the California Native Plant Society, San Francisco Tomorrow, POWER (People Organized To Win Employment Rights) and CARE (Californians for Renewable Energy).

Representatives for these groups, whose appeals of the EIR certification were denied by the board, say they are now weighing their options. Those include taking legal action within 30 days of the board’s second reading of and final action on the developer’s final redevelopment plan, which will be Aug. 3 at the earliest.

Supervisors are expected to introduce a slew of amendments July 27, when they consider the details of the proposal and its impacts on the economically depressed and environmentally polluted.

Michael Cohen, Mayor Gavin Newsom’s top economic advisor, admitted July 19 that all these various demands will likely delay project construction. "But 702 acres of waterfront land in San Francisco is an irreplaceable asset," Cohen reportedly told the San Francisco Chronicle. "It’s not a question of if — but when — it gets developed."

Chiu already has introduced five amendments to the plan in an effort to alleviate concerns about shipyard toxins, Lennar’s limited financial liability, a proposed bridge over Yosemite Slough, and the possibility that local residents will need more access to healthcare and training if they are to truly benefit from the development plan.

Sup. Ross Mirkarimi told the Guardian that he expects the board will require liquidated damages to ensure the city has some redress if the developer fails to deliver on a historic community benefits agreement that labor groups signed when Lennar was trying to shore up community support for Proposition G, the conceptual project plan voters approved in June 2008.

Mirkarimi said the board would also seek to increase workforce development benefits. "Thirty percent of the target workforce population are ex offenders. So while they might get training, currently they won’t get jobs other than construction," Mirkarimi observed.

He supports the health care access amendment and the public power amendment Chiu introduced July 21, pointing to Mirkarimi’s previous ordinance laying the groundwork for public power in the area. "This ordinance established that where feasible, the City shall be the electricity provider for new City developments, including military bases and development projects," Mirkarimi said. "PG&E was ripped when we pushed that through."

But Sierra Club activist Arthur Feinstein isn’t sure if additional amendments will help, given intense lobbying by city officials and a developer intent on winning project approvals this summer before a new board and mayor are elected this fall.

"Chiu’s amendments gave us what we asked for over Parcel E-2" Feinstein said, referring to a severely contaminated section of the shipyard for which Chiu wants an amendment calling for a board hearing on whether it’s clean enough to be accepted by the city and developed on.

But Feinstein is less than happy with Chiu’s Yosemite Slough amendment, which would limit a proposed bridge over it to a width of 41 feet and only allow bike, pedestrian, and transit use unless the 49ers elect to build a new stadium on the shipyard. In that case, the project would include a wider bridge to accommodate game-day traffic.

"The average lane size is 14 feet, so that’s a three-lane bridge. So it’s still pretty big. And it would end up filling almost an acre of the bay," Feinstein said.

Feinstein thanked Mirkarimi and Campos for asking questions that showed that the argument for the bridge has not been made. "But it’s disappointing that a progressive Board would be willing to fill the Bay for no reason," Feinstein said.

He concurred with the testimony of Louisiana-based environmental scientist Wilma Subra and environmental and human rights activist Monique Harden, who challenged the wisdom of the Navy digging out toxins while the developer installs infrastructure at the same site.

Subra said contamination is often found at Superfund sites after they have been declared clean when contractors to later dig into capped sites and expose workers and the community to contamination. Harden said the plan to begin construction on some shipyard parcels while the Navy removes radiological-contamination from shipyard sewers is "like a person jumping up and down on a bed that another person is trying to make."

But Cohen, who has aggressively pushed the project on Newsom’s behalf, countered that there is no scientific evidence to support such concerns. "It’s a very common situation," Cohen said. "It’s the basis for shipyard artists and the police being on the site for many years … It’s safe based on an extraordinary amount of data."

But Feinstein pointed to his experience working for the Golden Gate Audubon Society at the former Alameda Naval Station. He recalls how a remediation study was completed, but then an oil spill occurred at the site, which had been designated as a wildlife refuge.

"The military didn’t know about everything that happened and was stored on site, and it’s easy to miss a hot spot," he said. "And who’ll be monitoring when all these homes are built with deeds that restrict the renters and owners from digging in their backyards?"

Feinstein said he’s concerned that only Campos seemed to be asking questions and making specific requests for information around the proposed project’s financing

"Lennar is paying city staff and consultants and promising labor huge numbers of jobs. When you are throwing that much money around, it’s hard for people to resist — and the city has been co-opted," Feinstein said. "And how much analysis and resistance can you expect from city commissions when the Mayor’s Office is the driving force behind the project? So we don’t have a stringent review. The weakness of the strategy of ignoring our bridge concerns is that when we sue, we may raise a whole bunch of issues."

Arc Ecology director Saul Bloom says Chiu’s bridge proposal "screwed up the dialogue. We were close to a deal," Bloom claims. "But while that amendment allowed one board member to showboat, it prevented the problem from being solved."

Bloom is concerned that under the financing deal, the project won’t make any money for at least 15 years and will be vulnerable to penalties and bumps in the market — an equation that could lead the developer to build only market rate housing at the site.

"It’s a problematic analysis at best," he said.

"The bigger the development, the more it benefits people who have the capacity to address it — and that’s not the community," Bloom said. "So there’ll be more discussion of the bridge, and that’s where the horse-trading is going to be."

He also said the bridge has now taken on a symbolic value. "The thing about the bridge is that it’s not actually about the bridge any more," Bloom added. "It’s about Lennar telling people, ‘You will support us.’ If they get the bridge, it will give them free rein, an unencumbered capacity to do as they see fit. They are willing to make deals, but they have to have the bridge because it defeats the people who have been the most credible and visible — and then they have no opposition."

Mirkarimi wants state franchise fee change

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Sup. Ross Mirkarimi has introduced a resolution calling on the state Legislature to reform the law that allows Pacific Gas and Electric Company to pay a miniscule fee, in perpetuity, for the right to run its lines, poles and cables on and below the city streets.


The franchise fee was signed in 1939, and requires PG&E to pay just one half of one percent of its revenue to the city. Berkeley charges ten times that much. But since the deal has no expiration date, the supervisors can’t renegotiate it.


If San Francisco raised its fee to 5 percent for both electricity and gas the city would pick up an extra $50 million a year.


Both state Sen. Mark Leno and Assemblymember Tom Ammiano have told us they’re looking at ways the state Legislature could end perpetual franchise deals.


 

Lights out? I think not

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The big bold headline on the front page of the Ex: Lights out for power project. The article actually isn’t that bad, although it’s framed as a setback for public power.


But that spin is completely wrong. A huge victory for public power — the defeat of Prop. 16 — gives the city a little breathing room to get a better contract. That’s all that’s happening.


Sup. Ross Mirkarimi was pushing hard to get the San Francisco Public Utilities Commission to sign at least a tentative deal to get the city’s community choice aggregation program locked in before June 8, just in case Prop. 16 passed. The artificial deadline set by Pacific Gas and Electric Company was, frankly, forcing the city to get the best deal possible in a short time frame. And even an imperfect deal would have been preferable to losing out on CCA altogether.


But now that threat is gone, and the city has a little breathing room to negotiate — and to nobody’s suprise, the SFPUC, with Mirkarimi’s full support, is taking advantage of it. CCA isn’t dead; it’s not “lights out.” It’s not even that far off schedule. If the PUC doesn’t drag its feet, the program can be up and running early next year.


So there’s no cause for alarm or panic. The city will probably get a better deal now, anyway.

How SF can get $50 million a year from PG&E

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EDITORIAL Sup. John Avalos, who chairs the Budget Committee, is looking for ways to bring another $100 million into the city’s coffers this year. There’s a hotel tax initiative headed for the fall ballot. He’s talking about an increase in the real-estate transfer tax for high-end properties. And he and his colleagues are looking into a tax on commercial rents.

Those are all valid ideas. But there’s another way the city can bring in as much as $50 million more a year — without raising anyone’s taxes. It just involves increasing the franchise fee Pacific Gas and Electric Co. pays to the city.

PG&E uses the city’s streets and rights-of-way to run its gas lines and electricity cables; the company doesn’t pay rent for that space. Instead, it pays an annual franchise fee to the city, a percentage of its gross sales. Other utilities pay, too — Comcast, for example, pays 5 percent of its gross to San Francisco every year for its cable-TV franchise.
PG&E pays 0.05 percent for electricity sales, and 1 percent for natural gas.

That deal was reached in 1939. The Board of Supervisors back then gave PG&E the lowest franchise fee in California, a pittance, a fraction of what other cities and counties charge — and the contract has no expiration date. It’s a perpetual deal, something highly unusual.

Sup. Ross Mirkarimi wants to open up the 72-year-old contract for renegotiation and raise the fee significantly. It seems like a perfectly reasonable idea — Berkeley charges PG&E 5 percent for electricity. San Diego charges 3.5 percent. If the city is desperately scrambling for money to close the budget gap, why are we leaving so many millions on the table?

The numbers are big. In 2008, according to the Controller’s Office, PG&E paid San Francisco $3.5 million for electricity sales and $3.16 million for gas. If the city raised both fees to the level that cable TV providers pay, the general fund would pick up another $50 million.

It seems crazy that a franchise deal signed seven decades ago, by a board that was in PG&E’s pocket, should tie the hands of elected officials today. Most legislative bodies have rules barring any laws that would tie the hands of future legislators forever.

It’s particularly ironic for this to happen in the only city in the United States that is mandated by federal law (the Raker Act) to run a public power system.

But according to City Attorney Dennis Herrera, raising the fee would be very difficult; California law allows perpetual utility franchises. If Herrera is right (and no city attorney has ever been willing to challenge PG&E on this), then the state Legislature needs to act.

One idea from Mirkarimi’s office: simply mandate that all perpetual utility franchises increase every year by the cost of living index, up to a maximum of, say, 5 percent. If all the years since 1939 were counted, the city would be at the max today.

An even simpler option: the state could outlaw perpetual franchise deals — something that should have been done years ago — and mandate that all existing deals expire on, say, Jan. 1, 2011. That would give San Francisco six months to negotiate a new deal with PG&E, and the money from that deal would save a lot of city services.

Both Assembly Member Tom Ammiano and state Sen. Mark Leno have expressed interest in a bill that would open up San Francisco’s franchise fee, and both told us that they’re looking into it. Leno already has a bill barring PG&E from using ratepayer money on political campaigns; potentially, a franchise fee amendment could be added to it. The deadline for introducing bills for this session has already passed, so it would be a little tricky to find a way to change state law in the next few months. But it’s worth a try: there’s never been a time when PG&E was less popular in Sacramento. The company violated its own agreement with the Legislature, promising to support the law authorizing local community choice aggregation systems then turned around and spent nearly $50 million to overturn it.

Leno and Ammiano should pursue a bill as soon as possible to get rid of one of the great scandals in city history, a sweetheart deal in 1939 that has saved PG&E billions and cost the city dearly.

How SF can get $50 million a year from PG&E

1

EDITORIAL Sup. John Avalos, who chairs the Budget Committee, is looking for ways to bring another $100 million into the city’s coffers this year. There’s a hotel tax initiative headed for the fall ballot. He’s talking about an increase in the real-estate transfer tax for high-end properties. And he and his colleagues are looking into a tax on commercial rents.

Those are all valid ideas. But there’s another way the city can bring in as much as $50 million more a year — without raising anyone’s taxes. It just involves increasing the franchise fee Pacific Gas and Electric Co. pays to the city.

PG&E uses the city’s streets and rights-of-way to run its gas lines and electricity cables; the company doesn’t pay rent for that space. Instead, it pays an annual franchise fee to the city, a percentage of its gross sales. Other utilities pay, too — Comcast, for example, pays 5 percent of its gross to San Francisco every year for its cable-TV franchise.

PG&E pays 0.05 percent for electricity sales, and 1 percent for natural gas.

That deal was reached in 1939. The Board of Supervisors back then gave PG&E the lowest franchise fee in California, a pittance, a fraction of what other cities and counties charge — and the contract has no expiration date. It’s a perpetual deal, something highly unusual.

Sup. Ross Mirkarimi wants to open up the 72-year-old contract for renegotiation and raise the fee significantly. It seems like a perfectly reasonable idea — Berkeley charges PG&E 5 percent for electricity. San Diego charges 3.5 percent. If the city is desperately scrambling for money to close the budget gap, why are we leaving so many millions on the table?

The numbers are big. In 2008, according to the Controller’s Office, PG&E paid San Francisco $3.5 million for electricity sales and $3.16 million for gas. If the city raised both fees to the level that cable TV providers pay, the general fund would pick up another $50 million.

It seems crazy that a franchise deal signed seven decades ago, by a board that was in PG&E’s pocket, should tie the hands of elected officials today. Most legislative bodies have rules barring any laws that would tie the hands of future legislators forever.

It’s particularly ironic for this to happen in the only city in the United States that is mandated by federal law (the Raker Act) to run a public power system.
But according to City Attorney Dennis Herrera, raising the fee would be very difficult; California law allows perpetual utility franchises. If Herrera is right (and no city attorney has ever been willing to challenge PG&E on this), then the state Legislature needs to act.

One idea from Mirkarimi’s office: simply mandate that all perpetual utility franchises increase every year by the cost of living index, up to a maximum of, say, 5 percent. If all the years since 1939 were counted, the city would be at the max today.

An even simpler option: the state could outlaw perpetual franchise deals — something that should have been done years ago — and mandate that all existing deals expire on, say, Jan. 1, 2011. That would give San Francisco six months to negotiate a new deal with PG&E, and the money from that deal would save a lot of city services.

Both Assembly Member Tom Ammiano and state Sen. Mark Leno have expressed interest in a bill that would open up San Francisco’s franchise fee, and both told us that they’re looking into it. Leno already has a bill barring PG&E from using ratepayer money on political campaigns; potentially, a franchise fee amendment could be added to it. The deadline for introducing bills for this session has already passed, so it would be a little tricky to find a way to change state law in the next few months. But it’s worth a try: there’s never been a time when PG&E was less popular in Sacramento. The company violated its own agreement with the Legislature, promising to support the law authorizing local community choice aggregation systems then turned around and spent nearly $50 million to overturn it.

Leno and Ammiano should pursue a bill as soon as possible to get rid of one of the great scandals in city history, a sweetheart deal in 1939 that has saved PG&E billions and cost the city dearly.

Mirkarimi to PG&E: We want our $46 million back

Speaking at the June 15 Board of Supervisors meeting, Sup. Ross Mirkarimi introduced a non-binding resolution calling on Pacific Gas & Electric Co. to refund ratepayers for the $46 million it spent on a failed bid to pass Proposition 16, a ballot initiative dubbed the “Taxpayer’s Right to Vote Act” that would have impeded the creation of municipal electricity programs.

While PG&E has publicly stated that its campaign costs were covered by “shareholder funds,” the sole source of income for the parent corporation is money that the utility makes selling electricity, so the $46 million originated in ratepayers’ pockets.

At the meeting, Mirkarimi displayed a map of PG&E’s service territory beside a map of the California counties that rejected Prop 16, highlighting the striking similarity. In San Francisco, Prop 16 was rejected by more than two-thirds of the vote.

Mirkarimi’s resolution included several other improbable requests. He extended an invitation to PG&E CEO Peter Darbee to attend a Board of Supervisors meeting, to “discuss what it really and truly means to peacefully coexist,” he explained. “We look forward to Mr. Darbee coming to meet with us.”

The third aspect of the resolution deals with SFERS, San Francisco’s employment retirement system, which owns 106,348 shares of PG&E common stock valued at $4.38 million on the day the information was accessed. Institutional investors such as CalPERS and SFERS account for more than a 60 percent share of ownership of PG&E, according to the resolution.

Mirkarimi is calling on PG&E to refund SFERS, and “urges CALPERS and SFERS to consider divesting its holdings in PG&E stock” if the company refuses.

The resolution also asks the California Public Utilities Commission to carefully scrutinize PG&E’s requested rate hike.

PG&E didn’t return our requests for comment the last 10 times we called, but we tried again — even though the result is predictable.

Editorial: PG&E’s greed backfires

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The defeat of Prop. 16 showed that unlimited corporate spending on a ballot initiative doesn’t guarantee victory.

EDITORIAL The single most important number to come out of San Francisco on election night was this: 67.49 percent. That’s how many people in this city voted against Pacific Gas and Electric Co.’s monopoly measure, Proposition 16. It’s a statistic that ought to be posted somewhere on a wall at City Hall to remind everyone in local government that the voters sided overwhelmingly against PG&E and in favor of a public option for local electricity.

It’s a landmark victory. On the state level, the defeat of Prop. 16 showed that unlimited corporate spending on a ballot initiative doesn’t guarantee victory, that an underfunded coalition can defeat a giant utility — and that a majority of those in PG&E’s own service area are unhappy with their electricity provider. Public power activists all over the state should take this as a signal that PG&E, and its once-formidable political clout, are on the wane.

In San Francisco — the only city in the nation with a legal mandate for public power — the vote was the most lopsided of any California county. It was the strongest local mandate for public power since the passage of the Raker Act in 1913.

That should be a huge boost for the city’s community choice aggregation (CCA) program. Sup. Ross Mirkarimi, who has been leading the fight for CCA, was pushing hard to get a contract signed before the June 8 vote; like a lot of observers, he feared that PG&E’s vast war chest would overwhelm the opposition. But now that Prop. 16 is dead — and nothing like it will be back in the near future, if at all — the city has a bit of a breather.

That doesn’t mean all work on the contract should slow down. The San Francisco PUC has been mucking around with this deal for more than a year, and needs to bring it to a close. And the city needs to start preparing to answer PG&E’s propaganda campaign with a concerted effort — from the mayor’s office on down — to remind San Franciscans that CCA power will be greener, safer, and in the long run, cheaper than the energy we’re now forced to buy from PG&E.

Any San Francisco politician who stands with PG&E and opposes CCA will do so at his or her peril.

And while San Francisco is moving to implement a modest public power program, state Sen. Mark Leno is moving in Sacramento to limit PG&E’s ability to try another Prop. 16 move — or to spend tens of millions of dollars trying to block local power initiatives. Leno has introduced a bill that would limit the utility’s ability to use ratepayer money on political or public relations campaigns.

The measure doesn’t have a number yet, but the language is brilliant. It directs the California Public Utilities Commission to disallow any political spending that PG&E tries to add into its regulated rates. And since the company has no source of income other that the money it gets from ratepayers, the impact would be to deny PG&E the ability to spend money working against the interests of ratepayers and the public.

"Over the past 10 years, PG&E has probably spent $150 million on political campaigns — and that’s money that came from the ratepayers," Leno said. "This bill is to protect ratepayers."

PG&E will howl about its First Amendment rights — and, indeed, the Supreme Court has of late given corporations who want to influence political campaigns and legislative issues a good bit of leeway. But the fact remains that PG&E is a regulated utility in California, and the state has every right to determine how much the company can charge its customers and to limit how that money is used.

Leno’s bill, of course, could radically change local politics. If PG&E couldn’t spend millions to defeat public power measures, the city would have far more options — and activists should be thinking about how a future campaign to take over the company’s infrastructure might work.

The Board of Supervisors should pass a resolution endorsing Leno’s bill, and the coalition that worked to defeat Prop. 16 should be working to get other cities and counties around the state to sign on.

PG&E’s greed in putting Prop. 16 on the ballot is starting to backfire — and it can’t happen too soon.

PG&E’s greed backfires

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EDITORIAL The single most important number to come out of San Francisco on election night was this: 67.49 percent. That’s how many people in this city voted against Pacific Gas and Electric Co.’s monopoly measure, Proposition 16. It’s a statistic that ought to be posted somewhere on a wall at City Hall to remind everyone in local government that the voters sided overwhelmingly against PG&E and in favor of a public option for local electricity.

It’s a landmark victory. On the state level, the defeat of Prop. 16 showed that unlimited corporate spending on a ballot initiative doesn’t guarantee victory, that an underfunded coalition can defeat a giant utility — and that a majority of those in PG&E’s own service area are unhappy with their electricity provider. Public power activists all over the state should take this as a signal that PG&E, and its once-formidable political clout, are on the wane.

In San Francisco — the only city in the nation with a legal mandate for public power — the vote was the most lopsided of any California county. It was the strongest local mandate for public power since the passage of the Raker Act in 1913.

That should be a huge boost for the city’s community choice aggregation (CCA) program. Sup. Ross Mirkarimi, who has been leading the fight for CCA, was pushing hard to get a contract signed before the June 8 vote; like a lot of observers, he feared that PG&E’s vast war chest would overwhelm the opposition. But now that Prop. 16 is dead — and nothing like it will be back in the near future, if at all — the city has a bit of a breather.

That doesn’t mean all work on the contract should slow down. The San Francisco PUC has been mucking around with this deal for more than a year, and needs to bring it to a close. And the city needs to start preparing to answer PG&E’s propaganda campaign with a concerted effort — from the mayor’s office on down — to remind San Franciscans that CCA power will be greener, safer, and in the long run, cheaper than the energy we’re now forced to buy from PG&E.

Any San Francisco politician who stands with PG&E and opposes CCA will do so at his or her peril.

And while San Francisco is moving to implement a modest public power program, state Sen. Mark Leno is moving in Sacramento to limit PG&E’s ability to try another Prop. 16 move — or to spend tens of millions of dollars trying to block local power initiatives. Leno has introduced a bill that would limit the utility’s ability to use ratepayer money on political or public relations campaigns.

The measure doesn’t have a number yet, but the language is brilliant. It directs the California Public Utilities Commission to disallow any political spending that PG&E tries to add into its regulated rates. And since the company has no source of income other that the money it gets from ratepayers, the impact would be to deny PG&E the ability to spend money working against the interests of ratepayers and the public.

"Over the past 10 years, PG&E has probably spent $150 million on political campaigns — and that’s money that came from the ratepayers," Leno said. "This bill is to protect ratepayers."

PG&E will howl about its First Amendment rights — and, indeed, the Supreme Court has of late given corporations who want to influence political campaigns and legislative issues a good bit of leeway. But the fact remains that PG&E is a regulated utility in California, and the state has every right to determine how much the company can charge its customers and to limit how that money is used.

Leno’s bill, of course, could radically change local politics. If PG&E couldn’t spend millions to defeat public power measures, the city would have far more options — and activists should be thinking about how a future campaign to take over the company’s infrastructure might work.

The Board of Supervisors should pass a resolution endorsing Leno’s bill, and the coalition that worked to defeat Prop. 16 should be working to get other cities and counties around the state to sign on.

PG&E’s greed in putting Prop. 16 on the ballot is starting to backfire — and it can’t happen too soon.

Leno bill would limit PG&E political spending

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State Senator Mark Leno is introducing a bill that could stop Pacific Gas and Electric Company from spending ratepayer money on political campaigns.


The bill, which doesn’t yet have a number, would put a serious crimp in the private utility’s ability to launch another effort like Prop. 16 — the $50 million campaign to block public power in California.


The bill wouldn’t stop PG&E from spending money on politics — that might fly in the face of the Supreme Court’s rulings on corporations and campaign finance. It just says that no ratepayer money can be spent — and since PG&E gets the vast majority of its money from ratepayers, the measure would at the very least significantly limit the company’s political efforts.


And since PG&E is a regulated utility, the state of California has every right to control how much money PG&E collects from its customers — and where that money goes.


Not only would the bill ban PG&E from running its own Prop. 16-style statewide campaign, it could block the company from spending tens of millions of dollars to oppose public-power efforts. The bill states that any gas and electric utility with more than three million customers in California (and there’s only one such company)


“shall not spend funds received from ratepayers as authorized revenues on political and public affairs related to state or local governments. For purposes of this section, political and public affairs spending includes any activities involving, directly or indirectly, advocacy of the election or defeat of political candidates and of the adoption or defeat of ballot measures, through the actions of the corporation or through a third party.”


A few years ago, a bill like this would have had little chance in the state Legislature, where PG&E spent lavishly and was relatively popular. But under CEO Peter Darbee, the company has done nothing but piss off legislators. Not one state lawmaker endorsed Prop. 16. It’s safe to say that today, PG&E doesn’t have many friends.


More details to come as I get them.


UPDATE: Here’s Leno’s comment, from a press release I just got:


“PG&E launched a dangerous and misleading political campaign – with ratepayer funds – that had only one goal, to preserve the corporation’s monopoly. The state’s largest electrical and gas company should not be able to use ratepayer-generated profits to write special rules into the state constitution protecting it from competition. This measure ensures that local communities across the state have the ability to launch their own municipal power agencies, which will in turn encourage competition and help keep our rates low.”


UPDATE TWO: I just spoke with Leno, and he noted that the bill has a decent chance, since PG&E at this point “would be hard pressed” to find any friends in Sacramento. “The bill is to protect ratepayers,” Leno said. “It requires the California Public Utilities Commission, when it hears PG&E’s rate cases, to disallow any spending on political campaigns.”


 

Everyone hates PG&E

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Well, maybe not everyone, but the results from last night’s election are fascinating. A $50 million campaign, with the opposition struggling to come up with $100,000 — and PG&E still lost. Calitics has a fun comparison that makes one of the key points: The company lost most heavily in its own service areas. People who have to deal with PG&E — and its high rates, poor service, blackouts, botched smart-meter program and financial greed — voted strongly against allowing the company to further entrench its monopoly power. In essence, PG&E lost at home.


A couple of other interesting factors: The results show, I think, that whatever you say about the decline of newspapers, their endorsements still matter. Every major newspaper in the state opposed Prop. 16, and that clearly had an impact. The No on 16 campaign didn’t have the money for any media buys; the press coverage and strong anti-PG&E endorsements had to carry the message.


TURN, Ross Mirkarmi, Mark Leno, Tom Ammiano and consultant Gail Kaufman deserve credit for raising what little money they could and leveraging it into a stunning statewide victory. Considering that the turnout skewed heavily Republican, the defeat of Prop. 16 will go down as one of the great progressive victories in California history.


The local numbers were astounding: In San Francisco, Prop. 16 went down 2-1, with 67 percent of the voters rejecting PG&E’s ploy. That’s the strongest mandate for public power I’ve ever seen. Same for the rest of the Bay Area: Alameda County, 64 percent No. San Mateo County, 60 percent No. Marin County, 61 percent No. Mayor Gavin Newsom ought to take a look at the map on the Secretary of State’s website; it shows that the voters he needs to get elected lieutenant governor have rejected PG&E and want a public-power option.


The collapse of PG&E’s attempt to buy democracy in California gives San Francisco some breathing room on its community choice aggregation contract, which is excellent news. The supervisors can now take some time to go over the details — and prepare for the next major battle, the marketing campaign to education local residents about the value of community-controlled green energy.


PG&E is clearly on the run — CEO Peter Darbee has driven the company to a point where it has no friends left. Could be a great era for public power efforts.

Now: full-speed ahead with CCA

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EDITORIAL Proposition 16 — Pacific Gas and Electric Co.’s monopoly power grab — has to rank as the most venal, corrupt abuse of the initiative system in California history. The utility spent nearly $50 million to pay for a misleading signature drive, mount a campaign of lies and distortions, create bogus front groups, and flood the airwaves with ads — all in an effort to convince Californians to vote against their own interests. It’s a case study in why the state needs initiative reform (a ban on paid signature gatherers and limits on corporate campaign contributions would be good places to start).

At press time, we didn’t know how the election would turn out — but this much is clear: San Francisco needs to move ahead with community choice aggregation and continue to push for public power anyway.

Prop. 16 was never about "taxpayer rights." The whole point of the initiative was to block communities from replacing PG&E with public power. But it’s too late to stop San Francisco. Thanks to heroic efforts by Sup. Ross Mirkarimi, the city has already reached a deal with Power Choice LLC to create and operate a CCA system in town. Under state law, every resident and business in the city is automatically a customer of the CCA unless they opt out — so Prop. 16, which bars public-power agencies from signing up new customers, doesn’t apply.

It was a battle royal to get to this point. The PG&E-friendly San Francisco Public Utilities Commission, operating under a PG&E-friendly mayor, had more than a year to find a vendor and negotiate a contract. But PUC General Manager Ed Harrington dragged his feet at every turn. In fact, just a few weeks ago, Harrington tried to delay the contract until after the June election — thus giving PG&E a better shot at invalidating any contract. But with enough pressure from the supervisors, the basic terms of the deal were sealed in plenty of time.

Besides, San Francisco is in a unique position. Federal law (the Raker Act) requires the city to operate a public power system — and that act of Congress would trump any state law.

So the supervisors should move forward on finalizing the CCA, Mayor Gavin Newsom should sign off on it, and City Attorney Dennis Herrera should prepare to defend it vigorously if PG&E tries to sue.

Herrera has told us repeatedly that he thinks the city’s legal position is sound. In the past, he’s refused to use the Raker Act as a legal strategy — to go to court and force his own city to follow the law — but he needs to be ready to use that powerful weapon if PG&E tries to interfere with the implementation of CCA.

City officials at every level also have to make a concerted effort to counter PG&E’s lies — particularly the sort of misinformation that made it into the Matier and Ross column in the Chron June 7, the day before the election. Quoting unnamed sources, the reporters insisted that San Francisco CCA’s electricity rates would be higher than PG&E’s. That’s only true if you ignore the fact that PG&E’s rates are unstable and going up every year and that the cost of alternative energy is coming down every year — and if you don’t consider the costs of climate change, oil spills, coal mining disasters, nuclear waste storage, and all the other impacts of PG&E’s nonrenewable energy mix. And remember: San Francisco is asking the CCA to provide 51 percent renewables by 2019; PG&E’s portfolio doesn’t even meet the state’s weak 15 percent requirement. (There is also, of course, the multibillion dollar risk that San Francisco could lose the Hetch Hetchy dam if the city continues to violate the Raker Act.)

But the private utility that spent gobs of money on the Prop. 16 campaign will spend millions more in San Francisco to convince customers to opt out of the CCA. So the city needs its own campaign to explain why public power is not only much greener, but in the long run, much, much cheaper.

San Francisco has had a mandate for public power since 1913, nearly 100 years. The implementation of CCA would be a big step toward fulfilling that mandate. The supervisors should not let anything stand in the way.

Prop. 16 is getting very tight — PG&E’s only up by one point

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Wow, the No on 16 campaign might just pull off a miracle. PG&E’s lead is cut to 50.3 to 49.7 as more results come in from Los Angeles, where a once-powerful lead is dwindling. If this trend keeps up — and I don’t know if it will — PG&E is going to lose. Amazing.

PG&E has an early lead, but …

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PG&E has an early lead, with just a small fraction of a few counties reporting. Right now the Yes on 16 vote is 52.5 to 47.5, but there are no big cities reporting in yet. And in eight of the ten counties where there are results, the measure is losing. So I would say at this point, PG&E has a lot to worry about.

Poll: PG&E is in trouble

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Internal polls by Pacific Gas and Electric Company’s consultants show that Prop. 16 — the scandalous attack on public power and community choice — is still trailing, despite $45 million in advertising, a source familiar with the polling told me today.


The tracking polls show that PG&E is having a hard time getting above 40 percent support in some parts of the state, particularly in the Central Valley, where complaints about smart meters are soaring. “PG&E’s name is just shit out there,” the source told us.


The utility had planned to spend $35 million on the campaign, but has recently dumped in $10 million more — a sign that Prop. 16 is still lagging. And despite the fact that the No on 16 campaign lacks the money even to do a single major television buy, the public apparently isn’t buying PG&E’s line. It doesn’t hurt that nearly every major newspaper in the state has opposed the measure — and that PG&E is having a hard time finding allies.


So it’s possible that the private utility will wind up spending $45 million or more — and wind up losing, and in the process, alienating a wide range of political leaders and community groups. Peter Darbee, you’re doing a heck of a job.

PG&E has no friends

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The full-page ad on the back of the front section of today’s San Francisco Chronicle shows exactly how far PG&E has fallen in its political fortunes.


The Yes on 16 ad lists all endorsers of this godawful ballot measure — and other than the Chamber of Commerce, there’s not one San Francisco politician, community group, or organization on the list. Not one.


In fact, there’s not one statewide elected official. Nobody wants to carry PG&E’s water any more (unless you count the California Republican Party and the San Bernadino County Tea Party, two listed endorsers who will no doubt sway a lot of votes in the Bay Area).


That’s a big change. In past public-power campaigns in San Francisco, the giant utility was able to call in its chits and find a handful of politicians (who had been elected in part with PG&E campaign money) and community groups (who paid their bills in part with PG&E grants) willing to be PG&E shills. Now: Nobody.


Part of that is a reflection of just how bad Prop. 16 is — not one significant newspaper in the state has endorsed it, and most have blasted it. But it also shows how badly CEO Peter Darbee and his minions have alienated the California political world. “Nobody remembers them acting so outrageously,” State Senator Mark Leno told me. “They’ve just gone down a whole new path, and Peter Darbee is leading the charge.”


And if Prop. 16 goes down, PG&E’s fortunes will just fall further.


 

Beating the reaper

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rebeccab@sfbg.com

The wholesome-looking woman in the Pacific Gas and Electric Co.-funded Yes on Proposition 16 commercial seems trustworthy. "Voters should have the final say," she intones over a background of soothing music, "because we’re paying the bills."

TV-friendly slogans aside, many have deemed PG&E’s $45 million (a new figure well over the $35 million initially committed by the company — paid for by ratepayers who had no say) Prop. 16 campaign to be a subversion of the democratic process and corporate deception at its worst. And it’s aimed in part at stopping San Francisco — one of PG&E’s most lucrative territories and the home of its central office — from implementing a modest public power program called community choice aggregation (CCA).

But San Francisco may be slipping under the deadline. With a last-minute push by Sup. Ross Mirkarimi and other public-power supporters, it appears that the city will have the legal underpinning of a CCA program in place before the June 8 election.

It’s still complicated and a bit tricky, but under questioning by Mirkarimi April 21, SF Public Utilities Commission general manager Ed Harrington said that the city is going to meet all the necessary deadlines.

Prop. 16 seeks to require a two-thirds majority vote before a local government can move forward with a municipal electricity program. Voter approval of the measure on June 8 would effectively weed out any potential competition within PG&E’s service territory, particularly given that PG&E overwhelms all campaigns with multimillion dollar propaganda blitzes.

Paul Fenn helped craft the state law that created CCA, which allows local governments to purchase power on behalf of their citizens, a vision for an alternative to PG&E that lies squarely in the crosshairs of Prop 16. "Unfortunately, it’s mostly up to Republicans in Southern California how it turns out," Fenn said, because this election will attract conservatives to the polls to decide between gubernatorial candidates in the GOP primary. "Unless people in the Bay Area become aware."

BEAT THE CLOCK


Public power advocates are fighting to stop Prop. 16 — but at the same time, in San Francisco, there’s a frantic effort to gets its own CCA in place. The city is poised to have completed a CCA contract by June 8 — election day.

Although the contract will not be finally approved by committees, the Board of Supervisors, and the mayor until after the election, City Attorney Dennis Herrera says the steps are solid enough to protect the city against the inevitable PG&E lawsuit.

The approaching election day has sent the SFPUC scrambling in a months-long race against the clock to seal the deal on CleanPower SF, the CCA program that envisions offering energy customers the choice of a climate-friendly, 51 percent renewable mix by 2019.

Had the city agency failed to strike a deal with Power Choice Inc. (PCI), the program’s service provider, before the June 8 election, years of effort to get the clean power program off the ground could have gone down the tubes. Mirkarimi, City Hall’s strongest advocate for CleanPower SF, urged the SFPUC to get into gear, nicknaming Prop. 16 "the grim reaper."
Things grew tense in April and May as contract negotiating sessions wore on without success, green-power advocates sparred publicly with the SFPUC, and the "grim reaper" approached. A breakthrough came May 21: the SFPUC announced at a meeting of the city’s Local Agency Formation Commission (LAFCo) that it had finally signed a term sheet agreement with PCI.

A contract based on the terms is expected to be prepared by early June, Harrington said, adding that it could be introduced to the Board of Supervisors on June 8. A month-long review period is expected to follow.

"Today was an announcement of a very critical milestone," Mirkarimi, who chairs LAFCo, noted after the meeting. "I’m delighted to see us turn a corner, and I think … having a term-sheet signed, having a CCA implementation plan approved by the CPUC, and having literature sent out in three different languages to 250,000 households in San Francisco is all a testament that we are, as a city, absolutely serious in implementing and delivering our clean power energy program."

He nonetheless kept cracking the whip on advancing the goals of the program during the meeting. "Any hiccup whatsoever on timelines is a dangerous hiccup," Mirkarimi said.

"We fully expect to meet all deadlines," Harrington responded.

Public power advocate Eric Brooks, who has helped move the CCA program forward since the outset, expressed trepidation at a stakeholders meeting about the SFPUC’s commitment to the program, saying he believed that the city could have cleared the deadline months earlier without having to worry about Prop. 16 as a deadline.

Brooks advocated for Local Power, Fenn’s firm and a city contractor, to play a more central role in program design, saying that as long as the SFPUC remained at the helm, the program would be shaped by "the same inside-the-box thinking" and limited enthusiasm.

LITIGATION LIKELY


Despite recent leaps forward, the common wisdom around City Hall is that CleanPower SF is nonetheless unlikely to escape PG&E’s litigious wrath — particularly if Prop. 16 gets a thumbs up at the polls. If it passed, Prop. 16 would become effective immediately, according to the City Attorney’s Office.

"It’s not a foregone conclusion that Prop 16 will pass," City Attorney’s Office spokesperson Matt Dorsey pointed out. And if it does? "In our view," he said, "San Francisco has already implemented its CCA program," making it capable of withstanding a legal challenge.

"We are talking to the city attorney every single day," Harrington noted during a recent SFPUC stakeholders meeting.

But Fenn warned that a complicated lawsuit could still inflict damage. "Litigation processes can outlast political possibility," he cautioned. "San Francisco may be caught up in the courts." Or, if Prop 16 passes and the program moves forward as planned, "[CCA] might be a weird new variant that only exists in San Francisco and Marin."

Marin County’s CCA program is already up and running, and the Marin Energy Authority recently began providing power to its customers. PG&E — which is bound by state law to "cooperate fully" with CCA implementation — fought it by contacting customers to persuade them to opt out of the program via mailers sent in violation of CPUC laws that only allow CCAs to solicit opt-outs. PG&E earned a sharp rebuke in a May 3 letter from CPUC executive director Paul Clanon, specifically warning the company to "refrain from sending any mailers of this nature in the future."

On May 12, Clanon was back with a second letter. "On May 4, PG&E mailed a letter to every customer that had not opted out of MEA’s service, formatted in a manner that directly conflicts with the direction I provided to PG&E just one day earlier," he wrote. This time, he warned the utility that it was "in danger of the commission’s imposing significant and continuing fines and other penalties."

PG&E responded by saying the mass mailing of illegal opt-out notices had been an accident, and apologized. "They accidentally licked envelopes, accidentally stuck the stamps, and accidentally sent them out?" asked an incredulous Ben Zolno, a Prop 16 opponent, in a phone conversation with the Guardian.

"Nobody quite remembers PG&E acting so outrageously," Sen. Mark Leno remarked to the Guardian in the wake of the debacle. The CPUC later determined that any opt-outs solicited by PG&E’s illegal mailers were void.

At a May 20 meeting, the CPUC bolstered restrictions prohibiting PG&E from printing false statements about CCA programs in mailers but made no move to impose penalty fines. City officials characterized the decision as falling short of the action needed to halt the utility’s attempts to sabotage Bay Area CCAs.

"We would expect the CPUC to tell them to cooperate," Harrington told the Guardian. "What the CPUC said was ‘you can’t lie.’"

Meanwhile it’s up to the CPUC to decide whether to honor PG&E’s request for a $4 billion rate hike, which will amount to an average 30 percent increase on customer bills over three years. "They’re not always guaranteed to get what they ask for," CPUC spokesperson Andrew Kotch noted. Public hearings on the increase are coming soon, with a final decision scheduled for December.

"There have been other sizable rate increases and PG&E keeps coming back for more," says Dwight Cocke of The Utility Reform Network (TURN), which is also part of the Prop. 16 opposition campaign. "Up until recently, PG&E was shutting off 15,000 customers per month" for nonpayment, forcing customers to pay extra deposits and reconnect fees to get their electric service back.

"For a lot of people on fixed incomes and low incomes," he said, "it spirals out of control."

Read up: www.prop16.org; www.powergrab.info

PG&E gets spanked

The California Public Utilities Commission, the state agency tasked with regulating investor-owned utilities, seldom holds Pacific Gas & Electric Co.’s feet to the fire — even when advocacy groups are in an uproar over company practices. However, this may be changing.

PG&E’s brazen effort to alter the state constitution by placing Proposition 16 on the ballot to secure its own competitive advantage over municipal power programs drew skepticism from Commission President Michael Peevey, a former energy executive, at a hearing in March. And yesterday, the CPUC issued a stern warning to PG&E that it must stop breaking the law, now. In a strongly worded letter, CPUC executive director Paul Clanon ordered the San Francisco-based corporation to halt practices employed in Marin County to urge customers not to join the county’s brand-new Community Choice Aggregation (CCA) program, which will launch officially on Friday, May 7. Customers are automatically enrolled into the municipal power program, which offers a greener energy mix than PG&E, unless they take steps to opt out.

Under Public Utilities Commission law, there are only two legal methods of opting out: Customers can notify the Marin Energy Authority, which presides over the CCA, either by phone or online. Nonetheless, PG&E has tried creating new channels for customers to leave the fledgling CCA and go back to PG&E, the CPUC noted in a press release. One tactic is to send out mailers that are designed to look like real opt-out notices, which are “likely to create unnecessary customer confusion,” according to the regulatory agency. Another method is telephoning customers to ask them to opt out, then transferring the call that PG&E initiated to a PG&E customer service representative. Aside from bombarding energy customers with annoying telemarketing pitches and junk mail solicitations, these tactics are a violation of state law. The CPUC not only told PG&E to stop immediately, it did so publicly.

“I expect PG&E to cooperate fully with the directives given today and comply with the community choice aggregation law in California,” said CPUC Executive Director Paul Clanon.

PG&E pitches the Guardian for support

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You know that Pacific Gas & Electric is carpet-bombing voters with its campaign to kill the CleanPowerSF program and pass Proposition 16 – which would prevent such renewable public power programs in the future – when one of their minions calls the Bay Guardian City Editor at his desk at work with their pitch.

That’s what happened this week when a representative of a PG&E front group, the Common Sense Coalition, called me to warn about San Francisco’s “dangerous energy scheme.” I listened for awhile, and then asked the guy a few of my own questions.

“What is the Common Sense Coalition?” I asked, a seemingly straightforward question that I already knew the answer to. I could hear him fumbling through his notes looking for the answer, and when he finally started to read me his deceptive script about “concerned citizens,” I asked another, “Where does the Common Sense Coalition get its funding?’

He didn’t seem to know, so I told him that PG&E Corp. has dedicated at least $35 million in ratepayer money – that is, profits from the high electricity rates paid by San Franciscans and PG&E’s other captive customers – to the campaign being waged by its front groups.

That campaign includes slick mailers and ads on websites (including the New York Times), television, and print publications, asking, “Do you think voters deserve the right to have the final say on how our money is spent?” Actually, the measure requires a two-thirds vote, which is nearly impossible to obtain when PG&E spends tens of millions of dollars to distort the truth in every election that its market share is threatened.

And the truth is that we do have a right to vote on the elected officials who pursue programs like CleanPowerSF, but we don’t have a right to vote on whether we get our power from PG&E or whether it uses our own money against us.