Mar 27 - Santa Cruz Sentinel, Calif.


PG&E has thrown $28 million behind a ballot measure that would limit competition in the electricity market, making the utility the biggest contributor so far in June's slate of initiatives and drawing charges from critics that customer rates are bearing the brunt of lavish campaign spending.

The investor-owned company, though, says it's only looking out for the interests of the state's electricity users.

The measure, Proposition 16, would change the state Constitution to mandate a two-thirds vote of residents when a city or county wants to enter the power business and broker its own electricity. PG&E representatives say public power is too risky a venture not to include such voter input, while critics say PG&E should not try to control what local governments do.

Although public power hasn't been pursued in Santa Cruz County, the proposition could have ramifications for the broader market, affecting service and costs across the state.

 "The only credible threat to PG&E is public power. If you take away that threat, all PG&E ratepayers are going to be locked into higher rates because there will be no competition," said Mark Toney, executive director of consumer advocacy The Utility Reform Network.

TURN is the primary funder of the opposition campaign. Financial reports due this week showed opponents of the measure have raised roughly $40,000, compared to the millions raised by supporters whose sole contributor, according to the reports, is PG&E.

"People should be upset that their ratepayer money is being used to finance this situation," Toney said, suggesting bills could be lower if the company wasn't spending so much money on the campaign.

A PG&E spokesperson Thursday said the company's campaign funding is coming from investors and was a worthwhile price to pay for trying to protect California energy users.

"At a time when state and local governments are facing dire budget conditions, it's more important than ever that local residents be guaranteed a voice in major financial decisions," said Andrew Souvall with PG&E. "We think that in a lot of instances there are risks associated with this business."

Souvall said bad decisions by inexperienced public agencies buying and selling their own power could mean ratepayers have to pick up the slack and pay more as a result.

Marin County and San Francisco are among a handful of communities that are looking to provide their own electricity with the hope of better controlling customer prices and their power sources. Legislation that followed the state's energy crisis last decade gives cities and counties the ability to buy electricity on the wholesale market.

Municipal power is already provided in some areas of the state, including Santa Clara.

Santa Cruz resident Carolina Van Horn, an employee of the nonprofit California Public Interest Research Group, says Proposition 16 would have the additional disadvantage of hampering the pursuit of clean energy, a goal of many of the communities now trying to buy their own power.

"That's the direction we need to be moving in," Van Horn said. "It's really important that we have the power to make that decision."

Souvall, with PG&E, says the company is not trying to discourage that decision from being made, just ensure that residents have a say.

Cabrillo College Professor of Politics Rory O'Brien suspects ulterior motives.

"All major utilities are going to see a definite challenge to their power, no pun intended, over the next eight or 10 years," he said. "PG&E obviously has a vested interest in maintaining their monopoly, and they obviously want to do anything they can to limit competition."

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