PG&E's blank checks

PACIFIC GAS AND Electric Co.'s campaign of lies against public power is in full swing, and the central theme of the private utility's campaign is – even by PG&E's standards – astonishing in its deception. And yet already some leading community organizations and public officials have embarrassed themselves by signing on to the latest big PG&E lie.

The essence of the No on Proposition D campaign – the PG&E-funded effort to crush public power in November – is summarized in the name the PG&E flacks at Solem and Associates have chosen for their front group: San Franciscans Against the Blank Check. The implication (which the Solem operatives are pushing at every opportunity): public power is an untested option that could cost the city a fortune. Prop. D would allow city officials to issue revenue bonds without voter approval, further putting city finances at risk.

The truth: more than 40 million Americans live in communities with public power systems, almost all of which offer better service than private utilities, at lower rates. And the real "blank check" – the true option that puts San Francisco residents and businesses, not to mention the city budget, at risk – is continuing to allow PG&E to control our local energy system. Consider:

• PG&E's ratepayers have been forced to cough up more than $13 billion to pay for the company's bad investment in the Diablo Canyon nuclear power plant.

• PG&E wants another $18 billion to bail it out of bankruptcy.

• The rate hikes of as much as 40 percent that PG&E has demanded and won over the past two years have added another $3 billion to northern California power bills.

The impact of the rate hikes on the local and regional economy is staggering. On Long Island a public power agency's 20 percent rate cut was responsible for pumping up the economy by some $10 billion, helping reduce the unemployment rate by 3 percent, a study by Hofstra University economist Irwin Kellner showed (see "Power Politics," 8/14/02). If the same analysis applies here (and there's no logical reason why it shouldn't), then the San Francisco and Bay Area economies have suffered a massive, multibillion-dollar hit because of PG&E's high rates and bailouts.

Those blank checks to PG&E have helped deepen the local recession, cutting into local business revenue and hammering the local tax base – part of the reason the city faces a deficit of $150 million in the next fiscal year.

In other words, sticking with PG&E is the risky, dangerous option. As Savannah Blackwell reports on page 20, that's exactly what two major new energy studies, one from Ed Smeloff, the city's top energy policy expert, and the other from the consulting firm R.W. Beck, conclude. Both studies, released this week, call for the city to get into the power business. Smeloff tells us his plan would be much easier to implement if the city passed Prop. D.

Mayor Willie Brown can't present a single logical argument for refusing to support Prop. D. The only logical conclusion: PG&E has bought his loyalty over the years with campaign contributions and legal fees.

Meanwhile, all over town the PG&E operatives are trying to line up political groups to stand with the utility in bankruptcy court and oppose public power (and a safer, cleaner, more reliable energy supply for San Francisco). The Golden Gate Restaurant Association – whose members are struggling with soaring commercial PG&E bills – has gone along. The Residential Builders Association – whose members can't get timely PG&E hookups for new apartments – has gone along. The Chamber of Commerce – which is supposed to represent the interests of a business community suffering under a recession due in part to high power rates – is poised to go along. The leaders of every one of these groups – and the leaders of any other community group that backs PG&E and opposes Prop. D – should be asked the basic questions: What did the utility offer you? At what price did you sell out the interests of your community?

P.S.: How, on earth, in the middle of an energy crisis, did three major newspapers – the Sacramento Bee, the Los Angeles Times, and the San Jose Mercury News – wind up running stories and/or editorials pushing the foolish notion of tearing down the city's hydropower dam at Hetch Hetchy Valley? The whole campaign (see "Save the Dam!," 8/14/02) has the stench of something orchestrated by Gerald Meral, the director of the Planning and Conservation League. Meral, a veteran political hustler, accepted $70,000 from big private utilities in 1998 to help him pass an initiative allowing companies that reduced pollution to qualify for tax credits. Shortly after that, Meral's group became the environmental poster child for opposition to Proposition 9, the Ralph Nader-backed measure that would have stopped utility deregulation. Then-state senator Quentin Kopp called the deal "contemptible" and "akin to political bribery" (see "Buying the Bailout," 10/14/98). The editorials and articles were at times laughably wrong. The L.A. Times piece states that President Theodore Roosevelt signed the Raker Act, authorizing the construction of the dam in 1913. (Roosevelt was president from 1901 to 1909. The Raker Act, which requires the city to operate a public power agency, was signed into law by Woodrow Wilson.) The Sacramento Bee article, by Herbert A. Sample, doesn't quote any public power activists and doesn't even mention the fact that the dam would be the centerpiece of a city-owned public power system if Prop. D passes this fall. None of the papers mentioned anything about Meral's ties to the utility industry and dubious (at best) environmental credentials; instead, they blithely treated him as if he were a respected environmental leader with no hidden agenda. In fact, while all of these prominent newspapers were chasing the story of tearing down Hetch Hetchy, they were missing the real stories: the Raker Act Scandal and the historic import of this fall's Prop. D campaign, as well as how Mayor Brown and some major local organizations are defying all logic and backing PG&E, once again, against a credible public power campaign that seeks to enforce the law that led to the construction of the dam in the first place. Sample's article also states that Sup. Aaron Peskin has authored a resolution that would put the city on record as agreeing to cooperate with a study into tearing down the dam. Peskin told us he wasn't going to introduce that resolution. He shouldn't, and neither should any other supervisor. The future of the Hetch Hetchy dam shouldn't even be up for discussion until the city has passed a public power initiative and the renewable-energy resources exist to replace the dam's energy without building new fossil-fuel plants. And nobody should take any environmental group seriously on this issue until the group has endorsed and is actively supporting Prop. D.