PG&E Customers Killed Prop 16

by Richard Holober, CFC Executive Director, California Progress Report

It was a long night of watching election returns.  I was at an election night party with scores of labor and community activists at an IBEW hall. That’s right – construction electrician locals OPPOSED PG&E’s Prop 16. We were all waiting to see if PG&E’s early lead would dissolve.

It was after midnight when Prop 16 dropped below 50% on its way to the final count: 47.5% Yes to 52.5% No.

PG&E spent $46 million of its ratepayer dollars on Prop 16 to make sure our electric rates remain high, without asking the consent of its ratepayers. PG&E spent those dollars to convince ratepayers that elected local officials shouldn’t enter into any cost-saving direct purchasing arrangements with electricity generating companies unless the government agency first received the approval of two-thirds of local voters. Maybe PG&E couldn’t see its double standard, but voters certainly did.

A powerful coalition that included consumer groups, labor, environmentalists, local government, realtors, manufacturers, farmers and local business spent less than $100,000 and won. The coalition was mobilized by TURN ‘ The Utility Reform Network. Under the leadership of Executive Director Mark Toney, TURN ran a gutsy guerilla campaign that slayed the giant.

A review of the outcome by region makes it clear that PG&E’s own customers killed the ballot measure. Prop 16 fared better in regions served by other utilities.

Maybe PG&E will do some soul searching and ask itself why its own customers put the dagger into Prop 16, but don’t hold your breath. Today, the company issued a concession statement that betrayed a stunning tone deafness, saying ‘we will continue to work with our coalition partners to help ensure that the state’s voters and retail electric consumers have a voice in the future if their local governments attempt to make far-reaching decisions to use public money or incur debt to enter the retail electricity business without a vote.”

What PG&E is saying is that it will continue to play puppet master, using front groups it bought and paid for, each time local elected officials have the courage to stand up to this monopoly. In effect PG&E is saying it will continue to thumb its nose at state law (AB 117 of 2002 – Migden) which requires the for-profit utility to cooperate with local agencies that want to save residents money through bulk electric purchasing arrangements known as ‘community choice aggregation’.

In many Vote No campaigns, winning requires making the initiative funder the issue. The opponent’s job is to put the spotlight on some greedy special interest that is abusing the ballot to advance a selfish agenda. Early in the Vote No campaign, we learned that confidential polling showed this might be difficult.  PG&E had reasonably positive standing with its customer base. PG&E’s dedicated front line workers are its face in the neighborhoods, and they are the reason for that good will. The utility was not widely viewed as an out of control, greedy corporation.

Forty six million dollars later, PG&E has managed to turn that trick all by itself. Forty six million dollars should buy a company a lot of friends, but in PG&E’s case, it was the price of admission to the ‘Corporations Gone Wild’ club.

On the streets in the Bay Area, the transformation in attitudes towards PG&E over the past two months has been startling.  Reviled by its customers, a laughingstock in the political world, PG&E would be wise to take a long time out from politics. Somehow I doubt that will happen. BP and Goldman Sachs, move over and make room for PG&E.