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Making the case against Prop. 16

League of Women Voters against PG&E measure

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POSTED May 4, 2010 3:04 a.m.
South San Joaquin Irrigation District General Manager Jeff Shields made his case for taking over the retail power distribution from PG&E in Manteca, Ripon, and Escalon to more than two dozen people at the Manteca library Monday night.

But he was careful not to overstep his legal authority by publicly campaigning against Proposition 16 – the initiative on the June 8 ballot that would require any public owned utility wishing to enter the retain power business to secure a two-thirds supermajority from the voters.

Pacific Gas & Electric Company – the main supporters of the proposition – have said they could spend between $25 million and $35 million to get the measure passed by the voters.

Monday’s forum, which was scheduled and hosted by the San Joaquin County League of Women Voters, was intended to allow the non-partisan organization to voice their opposition to the ballot measure that has already stirred controversy in Northern California where California’s largest private-owned utility makes its home.

While Shields was on hand to answer questions and give a brief presentation about SSJID’s bid to take over PG&E’s distribution of retail power to customers inside of their coverage area – which includes Manteca, Ripon, Escalon and most of the rural areas in between – he didn’t shy away from his optimism that voters would down the measure if it appeared on ballots next month.

“I think we have a lot smarter people here than Peter Darbee realizes,” Shields said of PG&E Chief Executive Officer. “You can spend $35 million and try and buy your spot in the constitution, but the people who have put on a uniform and defended that constitution won’t let something like that happen.”

Kate White of the League of Women Voters outlined the group’s platform for defeating the initiative, citing that unlike other propositions before voters, Proposition 16 would amend California’s constitution in order to require the two-thirds vote it seeks – needing the same amount to overturn it if it were ever to pass.

The margin would then only require investor-owned utilities like PG&E to garner one-third of the vote in order to protect its interests, she said.

Even though election laws prevent public entities like SSJID spending any money on campaigning, White said, large corporations like PG&E – which she cited as a “monopoly” in the Northern California retail power business – are free to use investor money to finance their bid.

“We believe competition will promote green energy in the marketplace, and improve rates for all customers,” she said.

Ever since it began its bid to enter the retail power business, SSJID has maintained that it would be able to deliver 15 percent savings across the board to all customers even after paying the company for the existing local distribution system and covering the cost of improvements and upgrades.

Shields said that an independent company paid to determine the value of PG&E’s existing system assessed it at $65.1 million – a number that he says is more than $15 million above the value on the company’s books – and that an offer SSJID made for the purchase at $79.5 million still stands today.

The San Francisco-based utility, Shields said, now claims that the network is worth more than $500 million.

A second independent report determining the value of the system requested by the Local Agency Formation Commission – or LAFCo – has recently been completed and results are expected to be announced shortly.

No representatives from PG&E spoke publicly at Monday evening’s meeting.
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