Fiction is Expensive – Here are the Facts
By Gino Rembetes
PG&E expects to spend more than $2 million of its
customers’ money to distort the intent and the prospective results of a
proposed city charter amendment (Proposition D) that would permit San
Francisco to issue revenue bonds for building energy-generation plants.
Through a surrogate organization called San Franciscans
Against the Blank Check (SFABC), the bankrupt utility is trying to
convince voters that the amendment would enable the city to raise and
spend unlimited amounts of money to seize PG&E’s local
power-distribution grid, with citizens losing their say in the matter.
PG&E/SFABC further claims that a Prop. D victory would
lead to a sharp rise in electricity rates because the city could set
them with no intervention from the California Public Utilities
The company has also enlisted the aid of U.S. Sen.
Dianne Feinstein (D-California), who’s sending out mailers arguing that
the city is incapable of running a power utility. The mailers assure us
that they’re not coming at public expense, so we can guess who is
providing the money: PG&E, or more accurately, its customers.
Aside from the fact that the opponents’ contentions are
blatant lies, there are some things they would just as soon the voters
Topping the list are the “blank check” issue and the
CPUC’s regulatory role. If the reorganization plan in PG&E’s bankruptcy
petition gains approval, the company will be largely deregulated (SF
Chronicle, front Business page, Aug. 31, 2002).
There’s your blank check – made out to PG&E, which already charges more
per kilowatt-hour than any public-sector utility in California.
And remember what happened when San Diego Gas & Electric
was deregulated in 2000: within three months, electricity bills rocketed
by as much as 300 percent.
Regarding the claim that citizens will lose their vote
on revenue bonds, they’ve never had one. The city routinely issues such
bonds for numerous projects; they don’t need voters’ approval because
they’re paid back with user fees from the services they fund, not with
PG&E wants voters to confuse revenue bonds with
general-obligation bonds. The latter are paid back with tax dollars, so
they do require voters’ consent. Prop. D will not change that.
The fact is, San Francisco voters haven’t had a say in
their energy future since the city put it in PG&E’s hands almost 90
years ago. And Prop. D will actually give them a voice, because the San
Francisco PUC, which would oversee the development of new generation,
must comply with city and state open-meetings and public-records laws.
PG&E makes its decisions behind closed doors.
Furthermore, Prop. D’s passage would not automatically
trigger a move by the city to take over PG&E’s local distribution grid;
it would permit the city to do so if, after an independent study is
conducted, the controller certifies that the acquisition would not force
retail power rates above what PG&E charges.
Another favorite argument from the opponents is that the
city has messed up the water infrastructure – which also is under SFPUC
oversight – and the Muni system and therefore can’t be trusted to
provide electricity reliably.
That would be true if they were talking about the city
officials who, over many decades, allowed the water and public-transit
systems to deteriorate.
An initiative that voters approved in 1999 restructured
Muni’s governance and, by many accounts, service quality has since gone
Likewise, Prop. D would restructure the SFPUC in
significant ways. First, it would add two seats to the current five on
the commission. Second, it would give the board of supervisors a share
in the authority to appoint the commissioners; that power now rests
solely with the mayor. And PG&E is a long-time client of the current
mayor, Willie Brown. Third, it would reserve one seat on the commission
for an environmental expert and another for a consumer advocate.
Moreover, thanks to a reversion to elections by
district, San Francisco now has a board of supervisors that isn’t a
rubber-stamp agency for Brown and PG&E.
One must also bear in mind that the quality of a system
depends not only on its governance but also on the resources available
for its development and maintenance. Due to a property tax ceiling
initiative (Prop. 13) that California voters were hoodwinked into
passing in 1978, numerous local and regional services are below par.
Equally important to remember is what happened in early
2001: private-sector energy providers created an energy shortage and
gave us rolling blackouts to drive wholesale prices up, and PG&E in turn
boosted its retail rates; meanwhile, public-power cities such as
Alameda, Palo Alto, Sacramento, and Los Angeles continued to supply
reliable, inexpensive electricity to their customers.
Would building new generation cost money? Absolutely.
But it must be done, and soon, because PG&E’s plant in the Hunters Point
neighborhood and Mirant’s plant on Potrero Hill are aging and must
eventually be shut down because they fail to meet federal Clean Air Act
The city could borrow the money at a lower interest rate
and could thus build new generation more cheaply than either company
could. In fact, PG&E would have to pay extremely high interest because
of its bankruptcy.
With the benefits of public power so readily apparent,
you’d think Prop. D would be a cinch to gain voters’ approval. But polls
show it will win or lose by a razor-thin margin. Generally, support of
the measure is strongest in the eastern half of the city and opposition
to it is strongest in the western half. The outcome will hinge on which
precincts get the highest voter turnouts next Tuesday – and, of course,
how many ballots wind up, uncounted, in San Francisco Bay.
Gino Rembetes is a SanFrancisco-based freelance
writer and progressive activist.