It was an unhappy anniversary that passed without public fanfare. But nine years ago last week, Pacific Gas & Electric Co., ravaged by the energy crisis, plunged into bankruptcy.
Today, PG&E turns a healthy profit. And knowing that the best defense against any new assault is a strong offense, PG&E is aggressively promoting an initiative on the June ballot that would all but ensure PG&E's future.
By election day, the Northern California utility will have spent $35 million, maybe more, to buy its very own law, one that seeks to guarantee that PG&E would never lose an inch of turf to public utilities or whatever the next new thing is that rocks the energy world.
PG&E has legitimate concerns. But its initiative, Proposition 16, deserves its own separate wall in the pantheon of special interest-funded and one-sided ballot measures.
PG&E is the measure's sole funder, $28.52 million and counting. It has hired many of California's top and most costly political consultants.
PG&E has spent $19 million so far to air television and radio commercials across the state, warning that government plans to take over electric service, and lamenting: "We don't even have the right to vote on it."
The California Chamber of Commerce has endorsed Proposition 16. PG&E holds a seat on its board. The company has received endorsements from other political operators, including several who market themselves to the public as being pro-business and opposed to taxes.
PG&E has paid $457,000 to appear on the operators' slate cards, which will land in voters' mailboxes before the June 8 election. Some are receiving $100,000 payments, or more.
California requires a two-thirds vote before imposing most taxes, an almost insurmountable hurdle. Through Proposition 16, PG&E is seeking to create its very own constitutional amendment that would extend the two-thirds requirement to electricity-related issues in three ways:
• A local government seeking to enter the electric business could do so only after winning a two-thirds vote.
• An existing public utility (such as the Modesto or Turlock irrigation district), would need a two-thirds vote before expanding its service area.
• Local governments would need a two-thirds vote before creating a "community choice aggregation" program, by which customers band together to buy power wholesale from independent operators at a discount.
The No-on-16 campaign has virtually no money, at least not yet. But PG&E's initiative has driven a wedge between business interests that ordinarily walk arm-in-arm. The California Association of Realtors, almost always aligned with the California Chamber of Commerce, is opposing it.
The initiative's wording could be interpreted as requiring that a public utility would need a two-thirds vote in order to add even one new home to its system.
Equally significant, the California Manufacturers and Technology Association opposes Proposition 16.
Electricity rates for California industry are significantly higher than those in most other states, notes Jack Stewart, the manufacturers' president. By law, he added, utilities such as PG&E receive a guaranteed profit of 11 percent.
"This initiative takes that guaranteed profit to a guaranteed monopoly," Stewart said. "We don't think that creating a monopoly that is even more difficult to penetrate is good for ratepayers."
PG&E's initiative has its roots in the California energy crisis at the start of this century when Enron and other energy bandits gamed the grid and jacked up wholesale prices to record levels.
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