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Power to PG&E: Firm turns imitative process into way to protect their profits

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POSTED April 8, 2010 2:51 a.m.
The Progressives – led by liberal Republican Hiram Johnson – 99 years ago put in place the imitative process in California.

It was designed to empower the people - the little people if you will - with a tool to free themselves from the tyranny of monolith business concerns. More precisely, it was aimed at breaking the death grip Southern Pacific Railroad had on the economy thanks to the efforts to control the state government by literally buying off lawmakers.

It was back in a time when the mantra in the Republican Party – at least in California – was to free the individuals from the equivalent of economic servitude by bowing to whatever SP wanted to charge to move goods to market. Johnson also led the charge to give the State Railroad Commission – the forerunner to the California Public Utilities Commission – enough teeth to end the stranglehold SP held over much of the state particularly farmers and smaller communities.

Now on the eve of the imitative process marking 100 years, the very reform that Johnson helped put in place to make sure the people have a voice with power should politicians fail to look out for their best interests is now much under control of the monied interests just as the legislature certainly is through the equivalent of political crack - campaign donations.

Of all the corporate attempts to hijack the initiative process to serve their bottom-line, nothing is more egregious than Proposition 16.

It was not just the brainchild of PG&E. The corporation also spent millions to hire signature gatherers. It is willing to spend up to $30 million to convince voters it is in their best interests to drastically reduce the chances that PG&E could one day have competition that could reduce power costs for customers.

PG&E is not your typical struggling company who in these austere times can only afford to give their chief executive officer a miserly $9.8 million in annual compensation as he oversees the ratcheting up of rates on customers squeezed by a 12 percent unemployment rate, foreclosures, and reduced hours and paychecks. PG&E – thanks to the CPUC – has a guaranteed “reasonable” return on investment of 11.45 percent of every $1 they receive from ratepayers.

Wouldn’t it have been nice if everyone would have been forced to buy clothes at Mervyn’s that was assured by the state of an 11.45 percent return on their investment no matter what they did? Mervyn’s would still be in business today probably giving their CEO hefty pay increases while customers struggle.

PG&E defenders will tell you it’s not the same thing. That’s precisely the point. PG&E is protected from economic conditions to a large degree by the monopoly conferred onto it by the state. PG&E representatives have argued at times there is nothing stopping anyone from going into competition against them. Obviously, they aren’t too sure that is really the case given Proposition 16.

The measure essentially requires a two thirds vote of the public for anyone to take away PG&E business whether it is a government agency such as South San Joaquin Irrigation District or an aggregate co-op that wants to use only green owner through aggregation.

Why, you might ask, not let it be a truly democratic decision and require only 50 percent plus one of the voters to OK any succession from PG&E territory.

PG&E, despite all of its prancing and posturing knows darn well it needs the protection from customers that they have treated as ATMs due to the inability of its top brass to effectively manage the system that is vital to the economies of so many communities.

PG&E’s massive backlog of needed maintenance that is the justification for a coming $1.01 billion rate hike obviously didn’t happen overnight. It is the direct result of upper management decisions that include drastically reducing staffing over the years that has prompted the CPUC to chide them for becoming the worst major power company in California when it comes to reliability.

Pete A. Darbee – the head honcho at PG&E being paid $9.8 million – can ill afford to allow SSJID to break away from PG&E and enter the retail power business. SSJID – unlike many other jurisdictions has the expertise and enough money to make it work. Should SSJID succeed and demonstrate in a short time they can lower rates by at least 15 percent, you’d have people falling all over themsleves to break away from the clutches of PG&E.

That is why PG&E feels they have to hoodwink voters into amending the California Constitution to make it difficult for anyone to force PG&E to actually have to compete for consumer dollars like other businesses that have to find ways to deliver their product at a lower cost while increasing the quality of service.
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