Stop PG&E's corporate welfare

The best way to boost the business climate in this recession era is to promote consumer spending

EDITORIAL Just in time for the holiday season — and the colder weather — Pacific Gas and Electric Co. wants to shift millions of dollars in fees off big industrial customers and force residential consumers to pay more for natural gas.

The move would set a terrible precedent, and San Francisco officials should join the consumer groups that are calling on the California Public Utilities Commission to reject the plan.

At issue is California Alternative Rates for Energy (CARE), a state-mandated program that helps low-income consumers pay for basic gas service — enough to heat their homes and cook their food. CARE costs PG&E nothing; the entire subsidy system is paid for by modest surcharges on every utility bill in the state. But now the biggest gas users — giant corporations like Exxon Mobil and Chevron — want to stop paying the surcharge, and PG&E, along with San Diego Gas and Electric and Southern California Edison, is taking up their cause. The three giant utilities have asked the CPUC to reduce their subsidy contribution by $90 million. Residential customers would pick up the slack. Why? Jeff Smith, a PG&E spokesman, told Los Angeles Times columnist David Lazarus that "We've got to try to help make it more attractive for businesses to do business in California."

But Chevron and Exxon Mobil aren't suffering from a hostile business climate in this state. Both have reported record profits in the past year. The CEO of Exxon Mobil, Rex Tillerson, was paid $16.7 million; Chevron's CEO, David O'Reilly, made $15.74 million. The fee shift wouldn't help small businesses much; it's based on how much energy a customer uses, so the big energy-intensive industries pay the most.

The best way to boost the business climate in this recession era is to promote consumer spending — which means putting more money in the pockets of residents. Raising the gas bills of people who are already hurting will have the opposite effect.

"It's an absolute outrage that the biggest companies would be given a discount on the backs of ratepayers," Mindy Spatt, media advocacy director at The Utility Reform Network (TURN), told us. "Everyone's so worried about making the climate good for businesses, but what about the climate for people?"

A CPUC administrative law judge ruled against the utilities in November, but the case will go to the full commission, possibly as soon as Dec. 18. (Details are online at the Bruce Blog at

San Francisco has an interest in the outcome, since the city's economy will take another hit if PG&E gets away with this.

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