February 19, 2003

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Stop PG&E's next bailout

FOR YEARS, despite all sorts of endless problems with utility regulation in California, one basic principle has remained: Pacific Gas and Electric Co. and the state's other private monopoly utilities have been barred from collecting money from ratepayers to use for political campaigns. The reason is obvious: since customers have no real choice about where to buy their electricity, the money PG&E collects each month is almost the equivalent of a tax – and it shouldn't be used to help PG&E, the corporation, engage in campaigns that may not be in the ratepayer's interest.

Now, buried deep in a complicated rate-increase filing, PG&E is asking the California Pubic Utilities Commission to turn that rule on its head and allow PG&E to charge its customers for campaigns against alternative sources of energy, including (not just public power).

That's right: PG&E wants to make you pay to preserve its private monopoly. Your money would be spent to make sure that your rates stay high.

Technically, PG&E calls the plan "customer retention." The idea, the company says, is to prevent big industrial customers from fleeing PG&E's system for cheaper alternatives (that is, to make sure they don't sign on with nearby public power systems) and to provide supposedly impartial analyses of how public power would stack up against PG&E.

As Rachel Brahinksy reports on page 17, what's really going on is this: after getting a multibillion-dollar bailout for bad investments in nuclear power, then shuttling profits out of state just before filing for bankruptcy, and then asking the bankruptcy court for yet another bailout, PG&E wants even more of your money – to use to lobby against your best interests.

All over the state, communities fed up with PG&E's high rates and bad service are looking to set up municipal utilities. Public power is a proven alternative: every public power community in northern California has lower rates than PG&E and most have far better service. So PG&E is scrambling to defeat those efforts – and it's costing the bankrupt company a lot of money. Last year, for example, PG&E spent almost $2.7 million fighting Proposition D, a public power measure on the San Francisco ballot. As rates continue to soar and public power continues to be a battle cry up and down the state, the cost to PG&E of defending its crumbling monopoly will also soar.

It's bad enough that a utility in such financial trouble that it can't even keep the lights on is allowed to spend any money fighting political campaigns. To allow PG&E to charge its ratepayers for those campaigns would be one of the worst precedents in the history of utility regulation. It would also be a declaration of war on public power: PG&E would be able to spend limitless funds – millions, tens of millions, hundreds of millions – to crush public power efforts wherever they appeared. And all of that money would come out of your pocket.

Every city and county in the state has an interest in this battle, and they should all urge the CPUC to reject this plan immediately. The San Francisco Board of Supervisors also ought to adopt a resolution directing the city's Sacramento lobbyist and the members of the local legislative delegation to begin pushing for a bill that would bar any private regulated utility from ever using ratepayer money for campaigns against the public interest.