Buying power - Page 8

How PG&E and Mercury Insurance are spending millions to try to trick Californians into voting for corporate interests


The state party has yet to take a stand on the measure, and neither Democratic Party executive director Bob Mulholland nor chair John Burton returned our calls on the issue, just as Rosenfield told us he "can't get Burton to return my calls." But he remains hopeful the party will oppose the measure at its April convention and put money into defeating it.

"I'd like to think the Democrats will stand up against this insurance company, but Mercury Insurance is very politically connected and the Democratic Party, as we know all too well lately, doesn't seem to have that kind of backbone," Rosenfield said.

San Francisco Democratic Party chair Aaron Peskin said he's confident the state party will join the fight to defeat it: "This is a complete abuse of the initiative process and the voters of California should not be fooled."



Rosenfield isn't the only one who has battled with Mercury for many years. "I've been after them for 20 years, so this is not a new issue for me," said U.S. Rep. John Garamendi (D-East Bay), who served as California's first Insurance Commissioner from 1991 to 1995 and then again from 2003 to 2007. "He [Joseph] has refused to accept the fact that the world has changed around him."

Beyond just trying to change the rules, Mercury has blatantly ignored them, as a decade's worth of documents from the Department of Insurance that were released last month show, triggering upcoming legislative inquiries. In 275 pages unearthed by the Chronicle and then obtained by the Guardian, Mercury documents show the company illegally discriminating against certain professions, including soldiers, artists, bartenders, and traveling salespeople.

The Department of Insurance, now headed by a Republican, singles out Mercury as an especially bad actor with a history of hostility to regulation. As Rosenfield told us Feb. 9, "Here's what California Insurance Commissioner Steve Poizner said about Mercury in a case that's actually going to be heard tomorrow in Oakland. This is a quote: 'Mercury's lengthy history of serious misconduct and its attitude, contempt towards and/or abuse of its customers, the commissioner, its competition, and the Superior Court are all relevant to determining the penalty needed to best ensure the protection of the public for future violations and wrongdoing.' In my 22 years of working on insurance stuff, I've never heard the Department of Insurance refer to a company like that."

And here in San Francisco, the Guardian has a long history of exposing political corruption by PG&E, from essentially bribing local officials to give it control of the city electricity system — in direct violation of the Raker Act, the federal legislation that authorized the city to construct O'Shaughnessy Dam — to illegally funneling money into anti-public-power campaigns (one such violation in 2002 resulted in the largest fine ever issued by the San Francisco Ethics Commission).

The record on both companies is clearly malevolent, their political dealings utterly corrupt. Good government advocates say Props. 16 and 17 represent a clear litmus test on the power of corporations to push their interests ahead of the general public's in California.

"To me, it's a classic case study of what's going on with the initiative process in California and politics in general," said Derek Cressman, western regional director of Common Cause. "These are two initiatives literally sponsored by corporations to push very narrow interests."

"They are laws designed to give a financial advantage to a specific industry or company," Garamendi said, adding that he is afraid the effort may be successful. "Money talks. It always has, particularly in propositions, and the odds are money will talk again."


This is America, is it not? Are you confusing here with communist Russia?

Is your name the San Francisco Communist Guardian?

Posted by helllllooooooooooooo on Mar. 16, 2010 @ 8:41 pm

I'll ask the same question I asked in the Prop 16 story that nobody could answer.

Why does the SFBG single out P,G and E? Why the apparent multi-decade obsession with them?

Most SF'ers couldn't tell you a significant practical difference between their water supply (City run) and their gas supply (PG&E run).

They neither know nor rare whether it is private or public. Which is why they have always rejected voter initiatives designed to change either.

If it works, leave it alone. And if SF can't run Muni and can't manage its current huge fiscal deficit, why does anyone in their right mind want their light and heat dependent on Chris Daly?

Posted by Tom Foolery on Mar. 17, 2010 @ 7:46 am

Hi Tom,

Assuming you would like to have a substantive discussion I will offer this. As a journalist who has covered energy and environment issues for years, it is plain to me that the time to invest in electricity generating sources that reduce our collective, overall carbon dioxide emissions is now. While PG&E has been signing renewable energy contracts, its total renewable-energy content pales in comparison with the high standards for green power sources that have been set by Marin Clean Energy and Clean Power SF, the CCA programs getting underway in Marin County and SF, respectively. I have met a number of San Franciscans who do care deeply about this issue because they perceive it as a critical tool for launching a meaningful response to the challenges posed by climate change. If a municipal electricity program that offers a much greater percentage of renewable power can be successful in San Francisco, it can inspire and embolden others, help small business by encouraging the growth of small-scale green energy providers, and move us toward a more sustainable model. That's why I believe this issue is of interest to our readers.


Rebecca Bowe
SFBG reporter

Posted by rebecca on Mar. 17, 2010 @ 3:27 pm


It may well be that P,G & E is less "Green" than many would like.

But the SFBG's vendetta against P,G & E goes back decades and certainly long before green and climate change issues had the topicality and widespread interest that they currently enjoy.

Moreover, governments can mandate renewal energy requirements and other issues without necessarily owning power plants or power distribution networks. All of the private sector is regulated in various ways.

I can't help feeling that this issue goes a lot deeper than just concern for the environment. After all, if we really cared about the environment, we probably would want to remove the dam at Hetch Hetchy whose valley was regarded as equal, in its day, to Yosemite Valley itself.

Are you sure this isn't really just some good old-fashioned ideology about the government owning and running major services and industries? Painting it as a "green" issue makes sense as a marketing strategy but I think the issue is more fundamental than that. And it surprises me because, unlike a lot of other SFBG positions, it doesn't seem to be one that registers with the voters so much.

Posted by Tom Foolery on Mar. 17, 2010 @ 4:49 pm

I aggree that the time to invest in electricity generating sources that reduce our collective, overall carbon dioxide emissions is now, but few people, including or beloved SFBG reporters, understand renewables and the electric grid.

First, it does not automatically follow that if you want to reduce CO2 emissions you need to all the cities energy renewable. There are far more cost-effective ways to reduce CO2 emissions. Second, passing a "we only want renewables" does very little to reduce CO2 because it pushes off the problem to our neighbors.

You see, except for hydro, renewables are resources that depend on the wind and sun and are not very stable or fully predictable. The demand on the electric grid needs to be balanced instantly or the whole system crashes. Since electricity is extremely expensive to store, there are many generators out there that are built just to meet peak demand. We really only need them a dozen or so hours every few years. Renewables like wind do very little to stop new construction of peaking generators.

The electric grid cannot currently operate on renewables alone. If we say SF only will use renewable that means our neighboring ciites need to have traditional peaking units in place to support the electric system. In order to get more renewables on board, we need to either develop the technology to store electricity, or install technology to better balance the system - i.e., a smart grid. Of course, I fully expect the next article will be on how the smart grid and smart meters are bad for us because a few people incorrectly connected meters with high bills and screamed loudly. It is easy to contradict yourself if you don't know the topic.

Posted by Josh on Mar. 17, 2010 @ 5:07 pm

Yes, Tom, our problems with PG&E do run deeper than just the renewable power issue, but it's not about ideology. This company has used ratepayer money to defy the Raker Act, corrupt the political process, promote disastrous schemes like energy deregulation, maintain high rates, and use a dirty power portfolio (in defiance of state requirements that utilities get at least 30 percent of their power from renewables, a mandate PG&E hasn't met) for generations. And we're the only media outlet that has consistently raised these issues. You may be tired of hearing about it, and we certainly wish that we didn't have to keep writing about it, but it's a serious problem. Frankly, I don't know why there isn't more popular outrage at a supposedly regulated utility that has an extra $35 million of your money to spend pushing something as fundamentally undemocratic as a two-thirds vote requirement. That this is just accepted by you and others bespeaks a real breakdown in people's willingness to resist being controlled by powerful corporations.
Steven T. Jones
Bay Guardian City Editor

Posted by steven on Mar. 18, 2010 @ 9:19 am

The PG&E sponsored Ballot initiative contains false and misleading statements.
This proposition is a fraud upon the people of this State. It violates existing law. It is a monopoly using its captive customers money to wipe out competition and enshrine itself into the California Constitution. PG&E is poised to check mate our governments regulatory authority. The Proposition thwarts renewable energy and the opportunities of AB 32. It perpetuates an industry practice of pollution that disparately affects low income communities of color. The same Communities whose youth fight wars and die for fossil fuels, while the children and elders at home die from the pollution of fossil fuel burning. These are the Communities most harmed by this action. They had the most to gain from the promise of clean, locally harvested, electricity A promise potentially broken by this manipulation of the fossil fuel industry.
Rob Simpson

Posted by Rob SImpson on Mar. 18, 2010 @ 11:25 am

Have people forgotten that other shining example of private utilities, Enron? When corprations run our government, you lose a democracy.

Posted by sf24hr on Mar. 18, 2010 @ 8:11 pm

Prop 16's claim that it would assure "the right to vote" is entirely bogus. CPUC Chairman Michael Peavy pointed this out at yesterday's Prop 16 hearing is San Francisco. He said he's never believed in a 2/3 vote, because it means 1/3 plus one can block what the large majority wants. Peavy asked, doesn't community choice, at the opt-out procedure, give all ratepayers a choice? Yes it does. But Prop 16 actually limits and narrows choice. Under a CCA, all ratepayers can either opt for PG&E's dirty mix of fossil and nuclear, or opt for greener alternatives. Under a ballot vote, only 30-60 percent of eligible voters normally show up, and if only 1/3 of that smaller segment gets to veto CCAs under a Prop 16 system, "the right to vote" is not what it seems. In addition, PG&E can use its vast sums of raterpayers' money to swing elections against municipal governments who have neither the budget nor the legal right to fight back. PG&E spent $12 million to turn polling around and defeat a public power proposal for Yolo County. It is prepared to spend $35 million in ratepayers' dollar to foist Prop 16 on the State's Constitution to protect its market share. Ratepayers are funding a monopolistic corporate takeover of the Constitution and of the rights of cities and counties to determine their own energy future. Prop 16's "right to vote" is malarkey.

Posted by Guest Ed Mainland on Mar. 19, 2010 @ 1:30 pm

The negativity toward PG&E that is obvious in the Guardian and many other forums around NorCal is NOT simply a blanket rejection of Investor-Owned Utilities (though a strong economic case can be made that an inherent monopoly like electric supply should be owned and run by a public agency.)

No, PG&E has a unique history of incompetence and corruption dating to the earliest days of electricity in the west. The history of the electricity industry has been the subject of a number of very good studies and books, and in all of them, PG&E stands out as one of the major bad actors - - - virtually a poster child for the ways the private utilities abused the public trust to build their empires.

There are two other Investor-Owned electric companies in the state - SoCal Edison and San Diego Electric and Gas - and part of their business strategy in recent years has been to distance themselves from the positions taken by PG&E:

Item: While PG&E spends millions of their rate-payers' money in a to-the-death fight against Community Choice, the other two are obeying state law and cooperating with CCA efforts in their territories.

Item: PG&E is the only supporter of Prop 16, which would protect the monopolies of all IOUs. The embarrassed silence on Prop 16 from Edison and SDE&G is deafening.

Item: The other two IOUs are serious about carbon reduction and meeting the state mandates on renewable generation. They have both spent big money on innovative renewable projects. PG&E, however, spends mainly on greenwashing PR while their actual capital investments are in new fossil fuel plants and the lunatic idea of importing liquified natural gas from Asia via a pipeline from Oregon.

NO, the jihad against PG&E in these pages isn't a matter of abstract ideology. It's anger and frustration at seeing our planet go down the toilet while we're saddled with an electric company that just doesn't get it.

Posted by Guest: Bob Spofford on Mar. 20, 2010 @ 3:39 pm

It seems as though the author of this playbook took a page from her own writings about getting a "third party with credibility to act as there agents" The author Ann Sobel, got 10 other ex Mayors to sign a letter of opposition to our Marin Clean Energy project, sent it to all the local papers and PG&E is quoting her in their marketing materials. Pretty sick stuff.

Rebecca, would one be able to get a copy of this playbook to share with the Mill Valley Scope newspaper so people can see the letter from ex-Mayors is not an independant source as they assumed?

Posted by Guest on Mar. 28, 2010 @ 7:57 am