Contention remains over the merit of Proposition 16 on California’s June ballot. Some say it’s a beneficial constitutional amendment for the majority of electricity consumers, while others call it a special interest campaign for a large corporation.
Prop 16, or the “New Two-Thirds Requirement for Local Public Electricity Providers Act,” proposes a required public supermajority vote before local governments start a new electricity service, expand service to new territories or implement a Community Choice Aggregate program.
Prop 16 is solely funded by the largest electricity provider in California, Pacific Gas and Electric (PG&E) and state records show nearly $30 million shareholder dollars have been spent on Prop 16 efforts.
If Prop 16 passes, local governments will only be permitted to opt out and change their existing electricity service with a two-thirds supermajority public vote.
Sacramento Municipal Utility District, a local and publicly owned utilities entity, is among the many smaller electricity providers in California with a chance of being negatively affected by this potential new requirement.
SMUD is an alternative option to PG&E for consumers and municipalities in Yolo County and they are actively campaigning against Prop 16.
Arlen Orchard, the general council with SMUD, said she believes Prop 16 was written poorly, which can potentially lead to unintended consequences, but more importantly it imposes mandates that are detrimental to the existing system.
“For SMUD’s case, our customers already vote on decisions, so [Prop 16] just imposes an unrealistic supermajority requirement which is almost impossible to achieve,” Orchard said.
She also said if Prop 16 is passed it will solidify PG&E as a monopoly in California’s electricity market.
“SMUD doesn’t have nearly as deep of pockets as PG&E. We can’t let our customers go dark trying to fund lasting elections in order to persuade 66 percent of voters when we want to make changes and improvements,” Orchards said. “This is telling of the tremendous benefits PG&E will gain if Prop 16 is passed.”
Dave Kline, spokesman for the California Taxpayers Association, a non-partisan group endorsing Prop 16, believes the proposition will increase taxpayers’ power over the government because it enables the public to make more decisions through the voting process.
“People should decide the major financial decisions their local governments make since it is a commitment of utilizing tax dollars in a certain way,” Kline said. “Prop 16 will empower taxpayers by letting them weigh in before their local governments commit money to enter the electricity business.”
Still, Orchard said SMUD already lets customers decide such things and the necessary two-thirds supermajority vote not only makes it more difficult to expand their electricity service, but also difficult to adapt to the constantly changing business and technological market.
Because the California Public Utilities Commission (CPUC) regulates electricity rates and services on Investor-Owned Utilities (IOUs), such as PG&E, the state is not concerned Prop 16 will have a significant fiscal impact on public and government operations.
Tiffany Roberts, fiscal and policy analyst for energy and climate change at the Legislative Analyst’s Office, said Prop 16 is not likely to have a large fiscal impact as only a limited number of local government agencies are trying to expand or begin electricity services.
For instance, presently there is only one Community Choice Aggregate program generating electricity for consumers in California, Roberts said.
Robin Swanson, a spokesperson for the “Yes on Prop 16” campaign, said Prop 16 allows the community to make transparent, educated decisions about the best available options.
“Voters will have a choice to decide if their government should enter the retail electricity business and if PG&E is the best electricity provider for them,” Swanson said.
Mindy Spatt, communications director with The Utility Reform Network, said she believes Prop 16 uses its voting requirements to lock customers into PG&E’s service and restricts opportunities for competitors.
PG&E’s funding towards Prop 16 clearly indicates it has special interests to protect profits for a private enterprise, while attempting to undermine the California political system, Spatt said.
“Hopefully the voters will not let the California constitution be sold to the highest bidder,” she said.
MICHAEL STEPANOV can be reached at firstname.lastname@example.org.