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TURN: PG&E trying to lock high power rates into constitution

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POSTED February 25, 2010 2:45 a.m.

The California Legislature today is conducting a joint hearing on Proposition 16 – the measure PG&E crafted for the June 8 ballot requiring a super majority of voters to approve any attempts to weaken the for-profit’s monopoly on retail power sales.

It comes just two days after the South San Joaquin Irrigation District board unanimously went on record opposing the measure PG&E spent $6.5 million qualifying for the ballot and is reportedly ready to spend $30 million-plus in an advertising blitz to get it passed. It would require any agency wanting to take advantage of the community choice aggregation – a program that PG&E helped put in place in 2002 in response to criticism that it wasn’t providing enough green power options – or to start up their own retail operations to secure approval first of two thirds of the voters.

“What really bothers me about this is PG&E ratepayers don’t have an opportunity on anything PG&E spends their funds on,” noted SSJID director Ralph Roos.

SSJID board chairman Dave Kamper expressed the hope that “voters will take the time at the polls to study the proposition and that they’ll go beyond the propaganda that they will no doubt receive from PG&E or their front groups.”

SSJID – which is trying to enter the retail power business to reduce power costs at least 15 percent across the board to customers in Manteca, Ripon, and Escalon – cannot spend any money under state law to fight PG&E’s ballot measure nor can any other public agency.

The joint hearing in Sacramento today at 10:30 a.m. will include testimony from former California Energy Commission member John Geesmnan and a number of civic and public energy leaders as well as Mark Tooney who serves as executive director of The Utility Reform Network (TURN) that was formed in the 1970s in a bid to challenge attempts by PG&E to keep raising power rates.

TURN characterizes Proposition 16 as a measure that “would lock PG&E’s high electric rates into the California constitution by locking out public power and community choice.”

SSJID spokesperson Trolyene Saylor noted that a growing number of people are approaching the district frustrated that it is taking so long for SSJID to enter the retail power business. The SSJID’s request to get such authorization will be decided this spring before the San Joaquin County Local Agency Formation Commission.  

Saylor noted that if Proposition 16 passes it would add expense and more time to the process that it takes SSJID to enter the retail power business.

She pointed to the irony that it just takes a majority of voters to approve the proposition but it would take two-thirds vote to allow communities to enter the retail power business.

The ballot move by PG&E comes just as it  PG&E filed the largest rate increase request in the company’s history seeking $1.101 billion more on Jan, 1, 2011.

That means if PG&E is granted everything they want, you will be sending PG&E and additional $20.59 more a month in 2011 on top of what you’re paying now.

But that’s not all. You could still see more rate increases before 2011 as the request only covers the cost of delivering electricity to customers and the cost of operating PG&E power plants. It does not include the cost of electricity that PG&E purchases to resell to customers as such costs are recovered in separate rate proceedings.

State law that PG&E and other utilities lobbied to obtain, would mean $127 million of the $1.101 billion rate increase will go to PG&E’s shareholders and other “profit” related items such as multi-million dollar bonuses for its top executives at the same time the company continues to shed front-line employees and close PG&E service offices in communities.

By statute, PG&E is allowed to take 11.45 percent of their revenue and pocket it in some form whether it is dividends or bonuses. The “profit” doesn’t go to capital outlay as rate increases granted by the CPUC take care of that as well as help cover costs when PG&E losses wrongful death claims such as a year ago Christmas Eve when they were found negligent in the natural gas explosion that killed a Rancho Cardona man and severely injured two of his family members.

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