The PG$E power-grab initiative
PG&E has drafted and is bankrolling a California ballot initiative designed to undermine renewable energy, stymie competition, and buttress the company's near-monopoly over electricity in Northern California. The state is currently verifying the signatures the company has submitted to place the measure on the June ballot.
The "New Two-Thirds Requirement for Local Public Electricity Providers" would be a constitutional amendment requiring power agencies not owned by investors to obtain a 2/3 vote of the electorate before issuing revenue bonds. This measure would apply to municipal electric-utility companies (like those in Alameda or Sacramento) as well as utility districts created under the state's community-choice-energy law - the approach used for creating clean-energy programs like those being launched in Marin (see article above) and San Francisco. Revenue bonds, typically used to expand or repair public services like water, sewage, and waste-disposal districts, are paid back through service fees, not taxes, and therefore do not currently require a public vote, let alone a 2/3 majority. PG&E, as an investor-owned utility and a governmentally backed monopoly receiving substantial government subsidies, would not be subject to such restrictions.
PG&E clearly intends to put the kibosh on public energy providers. As provided in AB 117 of 2002, "Community Choice Aggregation" allows the electrical demand of residents, businesses, and government agencies to be aggregated to purchase renewable energy in bulk (or to develop it locally) through an energy provider of their choice. In this way a utility district can offer competitively priced energy that is less carbon-intensive than PG&E's, while PG&E continues to handle electrical delivery and billing.
For example, the Marin Clean Energy program, according to Marin Energy Authority interim director Dawn Weisz, "will take about $94 million per year away from PG&E. We will be taking that money to buy renewable energy, and the money left over will be used to fund local renewable and energy-efficiency projects." San Francisco's Clean Power SF program hopes to provide half the city's electricity from clean energy and energy efficiency.
Interest in community-choice energy is running high in light of the fact that PG&E is almost sure to fail to reach the state minimum of 20% renewable energy by 2010. The company is currently procuring only about 14% of its electricity from renewables. Although the company's publicity trumpets a small number of clean-power projects, PG&E is investing mostly in new fossil-fuel plants, thus locking ratepayers into future rate increases that will accompany the inevitable rise in carbon prices.
The gridlock of our state legislature in passing a budget has shown clearly how difficult it can be to act when a 2/3 majority is required. Local communities trying to reduce their carbon footprints, develop green jobs, and protect consumers from PG&E rate hikes would be hobbled by this requirement; PG&E would not.
We expect PG&E to spend large amounts, coming ultimately from its ratepayers, to advance its ballot measure. The Sierra Club will be working with numerous other public-interest organizations to stop PG&E from buying this election.