AS THE FIRST vote on the San Francisco budget neared last week, the city supervisors were flooded with faxes from community groups that wanted to save funding for social services. That's not unusual; it happens every time there's a budget deficit. But this torrent of constituent communications, coming from some eminently respectable organizations, had an odd twist: They all used nearly exactly the same language to make a point that had never been a serious part of the budget discussions and until now had never been on any social-service group's agenda.

The messages called on the supervisors to reduce funding for the Local Agency Formation Commission and redirect that money to other programs. In a paragraph that was virtually identical from fax to fax, the plaintiffs argued that LAFCo was wasting $800,000 of desperately needed cash.

Why is LAFCo suddenly in the crosshairs? Why are all these groups suddenly targeting a relatively minor budget allocation that has never bothered (for example) the city employee unions, who watch the budget like hawks?

There's a pretty simple explanation: LAFCo is looking at ways to bring San Francisco cheaper and more environmentally sound electricity – and Pacific Gas and Electric Co., which has been pretty quiet about the latest public power moves at City Hall, is now orchestrating a sneak attack on the LAFCo budget.

Several weeks ago, the Bay Guardian has learned, PG&E invited a range of local nonprofit groups to a meeting. Company operatives chatted with grassroots organizers and looked for common ground. For example, Kelly Quirke, executive director of Friends of the Urban Forest, told us that Travis Kiyota, a PG&E lobbyist, had mentioned how much he liked trees and how PG&E was in favor of funding FUF's efforts.

As the budget crunch neared, Quirke began hearing reports that someone at City Hall was urging the supervisors to cut LAFCo funding so the money could go to tree planting. He immediately called Kiyota and told him to stop. But others played right along with the PG&E game.

"By eliminating waste at LAFCo, $800,000 in taxpayer funds will be available for city services," a letter from Chuck Ayala at Centro Latino de San Francisco stated. "LAFCo's only purpose is to promote the city takeover of local utilities. The voters have rejected this proposal many times."

Most of the nonprofit executives involved (including Ayala, a longtime PG&E ally) wouldn't come to the phone to answer our questions. One, Sandy Mori of Kimochi Inc., actually said she'd come up with the idea all by herself – despite the fact that her letter had language virtually identical to Ayala's and that she repeated the same error (LAFCo is allocated $360,000 this year, not $800,000.)

But Kent Woo, of the Chinese Health Coalition, was honest. He told us "someone at PG&E," whose name he couldn't remember, had contacted him and suggested the LAFCo money was a waste and could be better spent on services like health care. The PG&E operative urged him to write a letter, and he went along – although he acknowledged when he spoke with us that he had no idea if the $800,000 figure was accurate.

Let there be no mistake here: The attack on LAFCo is a PG&E scam designed to derail a public power feasibility study and the move toward community-choice aggregation.

The supervisors should reject this scam and continue with the LAFCo funding. And the nonprofit execs who let PG&E make fools of them should come clean and explain exactly how this little number was orchestrated – and the next time PG&E comes calling, they should hang up the phone.