Proposition 16 Fizzles

PG&E's costly power play loses at the polls
By: Katharine Mieszkowski

Despite spending more than $46 million, Pacific Gas & Electric failed to cement its monopoly at the ballot box Tuesday, as Proposition 16 went down in defeat. The "yes" side got 47.5 percent of the votes with "no" taking 52.5 percent. 

"While the election outcome hasn’t diminished our steadfast belief that citizens should have a vote in local government efforts to enter the electric utility business, we respect the decision voters made on this initiative," said Greg Pruett, senior vice president of corporate affairs for PG&E, in a statement. 

The initiative would have amended the California constitution to require a two-thirds majority of voters to approve when local governments start or expand public-power offerings. It would have made it much harder for alternatives, like Marin Clean Energy and CleanPowerSF, to get off the ground.

The real shocker is that the amount of money spent to defeat the bill, just $80,000, was a fraction of what PG&E laid out. “This is a stunning reversal of the normal expectation that money can buy results in California elections,” said Steven Weissman, associate director of the UC Berkeley School of Law’s Center for Law, Energy and the Environment.

Voters were suspicious of the utility’s spending. “It's down a slippery slope of companies setting up propositions in a way that is not democratic,” said Dudley Thompson, a small-businessman who lives in El Cerrito, explaining why he voted against Proposition 16. 

“This is fabulous news for anyone who hopes to have representative democracy survive in this state,” said Supervisor Charles McGlashan, who as the chairman of the Marin Energy Authority has done battle with PG&E over Marin Clean Energy. “It allows cities to decide for themselves if they can do better going to the competitive marketplace like we did.”

The defeat of the initiative is good news for Marin and San Francisco, which would likely have had to fend off legal challenges to their community-choice aggregation programs, which function like a public buyers’ club for electricity, had the measure passed.

Yet, it hardly means that the battle over public power in Northern California is over. “PG&E has demonstrated an unprecedented willingness to spend money to defeat public power efforts,” said Weissman. In the past, the utility has spent millions to fight public power at the local level from San Francisco to Yolo County.

PG&E plans to fight on. "We will continue to work with our coalition partners to help ensure that the state’s voters and retail electric consumers have a voice in the future if their local governments attempt to make far-reaching decisions to use public money or incur debt to enter the retail electricity business without a vote," Pruett added in his statement.

Voters also rejected Proposition 17, another initiative with major backing from a single company. Mercury Insurance Group chipped in almost all of the $16 million-plus spent trying to pass the measure, while the opposition raised less than $1.5 million. The initiative would have allowed insurance companies to penalize drivers seeking insurance if they’d allowed their insurance to lapse. The measure failed with 47.9 percent voting yes, and 52.1 percent voting no.  

“Californians saw through this $16 million ad campaign,” said Doug Heller, executive director of Consumer Watchdog, which led the opposition to the measure. "It sends a message to corporations that have tried to make the initiative process their own with attempts to buy laws."