Vote No on Prorp 16Vote NO on Proposition 16

IMPOSES NEW TWO-THIRDS VOTER APPROVAL REQUIREMENT FOR LOCAL PUBLIC ELECTRICITY PROVIDERS
Initiative Constitutional Amendment

League Positions | Discussion | Supporters | Opponents | Resources | Sample Letter to Editor | Summary

Note: For a full explanation of the measure and background information on it, including the fiscal effect, refer to the Legislative Analyst’s Office analysis included in the Secretary of State’s Official Voter Information Guide (http://voterguide.sos.ca.gov/) and the LWVCEF Pros & Cons and In Depth coverage of Proposition 16.

LEAGUE POSITIONS

This measure would require local governments to have the approval of two-thirds of the voters before providing electricity to new customers, expanding service into new territory, or contracting with electric service providers through a community choice aggregation program using public funds or bonds.

The LWVC State and Local Finances Position in Brief supports a flexible process that allows adoption of revenue and finance measures by a simple majority vote. Our position calls for a simple majority vote by the public or the governing body to adopt, repeal or change a revenue or finance measure. We also support public program and funding priorities that give primary consideration to meeting the basic needs of the general population, attaining program objectives economically, and using procedures that promote flexibility and permit diversity of services.

The LWVC Energy Position in Brief calls for a state energy policy that will ensure reliability of energy resources and protection of the environment and public health and safety, at reasonable customer rates, giving primary consideration to conservation and energy efficiency. In considering resource adequacy, the position states that in acquiring new electric resources, major factors to consider include the reduction of greenhouse gas emissions; development and deployment of renewable resources; and contribution to the diversity of the resource mix.

DISCUSSION

As noted in the LAO analysis of Proposition 16, there are three kinds of providers of electricity service in California: investor-owned utilities (IOUs), local publicly owned electric utilities, and electric service providers (ESPs). A state law passed in 2002 allowed cities or counties to contract with electricity providers other than their current IOU through Community Choice Aggregation (CCA), and several local governments are considering that option. The LWVC supported the legislation that authorized CCAs under our Energy position. The existing IOU would continue transmission and distribution of the electricity.

In some cases when a change in the provision of electricity service is proposed, a public vote is required— for instance, for a publicly-owned utility to annex new territory. In other cases, such as the creation of a CCA, only a vote of the local governing board is required.

Pacific Gas & Electric Company (PG&E) is an IOU that has a monopoly on provision of gas and electric power in much of northern and central California. The company has opposed attempts by local governments to add to the territory they serve, or to create a CCA. PG&E has waged aggressive campaigns, both on ballot measures and in expensive public relations campaigns, and has so far been largely successful in fending off those threats. It has generally been an unequal battle, because PG&E can freely use shareholder money to finance campaigns, while local government is strictly limited in spending taxpayer funds to put forward their own case.

Now, PG&E has turned to the initiative process to place on the ballot a measure that would require not just approval by the voters, but a two-thirds supermajority vote for nearly any local action that would take the sale of electric power away from PG&E and transfer it to local government or allow them to purchase it through a CCA. That would mean that PG&E, with its unlimited ability to use its funds—money that comes originally from rate payers—would only have to gain the support of a minority of local voters to defeat any such local measure.

PG&E’s campaign tries to make voters believe that if local governments choose to buy electric power from any source other than PG&E, the likely result is either higher rates for that service or the local government raising local taxes or floating bond measures to meet escalating costs. But under current law, local governments cannot either raise any taxes or pass bond measures without going to the voters for approval.

Neither local government power providers nor CCAs are profit-making enterprises that need to satisfy shareholders. If communities choose to obtain their energy from publicly owned utilities or CCAs, it is because they want to obtain it at lower cost, or from “greener” sources, such as renewable or less polluting energy sources, than PG&E offers.

SUPPORTERS

Signing the ballot argument in favor:

Teresa Casazza, President
California Taxpayers’ Association

Allan Zaremberg, President
California Chamber of Commerce

Signing the rebuttal to the opponents’ argument: Teresa Casazza, President, California Taxpayers’ Association, and Allan Zaremberg, President, California Chamber of Commerce.

Other supporters: Pacific Gas and Electric Company (PG&E) is the only other supporter found on the www.taxpayersrighttovote.com campaign Web site.

OPPONENTS

Signing the ballot argument against:

Jeannine English, California State President
AARP

Andy Katz, Chair
Sierra Club California

Richard Holober, Executive Director
Consumer Federation of California

Signing the rebuttal to the supporters’ argument: Michael Boccadoro, Executive Director, Agricultural Energy Consumers Association; Lenny Goldberg, Executive Director, California Tax Reform Association; and Janis R. Hirohama, President, League of Women Voters of California.

Other opponents include the California Association of Realtors, California Manufacturers and Technology Association, the City of Alameda and a number of other cities, the County of Marin, Local Power, Planning and Conservation League, Sacramento Municipal Utility District (SMUD), and TURN (The Utility Reform Network)

RESOURCES

Helen Hutchison, LWVC Government Director, govt@lwvc.org,

Anne Henderson, LWVC State and Local Finances Program Director, slf@lwvc.org

Trudy Schafer, LWVC Senior Director for Program
1107 Ninth Street, Suite 300, Sacramento 95814-3608
tschafer@lwvc.org, 916-442-7215

No on Proposition 16, www.NoProp16.org, 415.929.8876. The campaign committee formed to oppose Proposition 16 is No on Prop 16, Stop the PG&E Powergrab, Sponsored by Local Power and The Utility Reform Network.

SAMPLE LETTER TO THE EDITOR

Note: Please adapt this letter to your own community and check your local paper’s word limit for published letters.

Editor:

Proposition 16 is a cynical and misleading effort by a for-profit corporation to protect its business from competition.

Many local communities want to switch to a neighboring publicly-owned utility or to use nonprofit Community Choice Aggregator (CCA) organizations that can buy electric power on the wholesale market on behalf of their local governments.

They are prompted by a desire to get electric power that is cheaper or comes from sources that are more renewable or less polluting than they receive from their current utility, PG&E.

By requiring a supermajority two-thirds vote of the public, this measure would make it nearly impossible for local communities to make that choice.

PG&E is spending tens of millions of dollars to promote Proposition 16 and will continue to spend whatever it takes to defeat any local measure that would cut into their business.

Vote NO on Proposition 16.

Sincerely,

(your name)

SUMMARY: Why We Ask You to Vote NO

NO on Proposition 16
Stop the PG&E Initiative

  • Proposition 16 is an unnecessary measure that would do nothing to protect the public interest. Instead, it is designed solely to protect the business interests of a privately-owned monopoly.
  • Pacific Gas & Electric (PG&E) is the sole provider of gas and electricity service to much of northern and central California. The intent of this measure is to keep things that way, by making it nearly impossible for local residents to make any other choice for electric service.
  • PG&E, the only sponsor of this measure, spent millions just to place it on the ballot. They have made it clear that they will spend whatever it takes to scare voters into thinking the measure is for the protection of the public, rather than their own profits.
  • Under current law, local communities can agree to be annexed to a neighboring public electric utility district, or to buy electricity directly from a local nonprofit organization that can buy “green” power at wholesale rates and sell it to communities at a more affordable cost. Proposition 16's intent is to make that choice almost impossible by requiring a two-thirds supermajority vote to make such changes.
  • PG&E is using its shareholders’ money—dollars collected from its rate-payers—to spend millions of dollars on a ballot campaign designed to fool voters into supporting a measure that would make it nearly impossible for those voters to make decisions in their own best interests.
  • Local governments cannot spend taxpayer funds for ballot campaigns. That means local residents who want to want to buy green power at wholesale rates will have to raise the money for their own campaign to fight PG&E’s deep-pocket opposition.
  • Proposition 16 is a striking example of a special interest using the initiative process to promote its private wellbeing. If this measure goes into effect, PG&E will only have to make a small minority of voters believe that getting electric power from any source than PG&E will cost them money in the form of higher taxes and public debt. But local government already must go to the voters to either raise taxes or incur bonded indebtedness.
  • Don’t be fooled by this cynical and misleading campaign to protect a private monopoly.