An open letter to the small business community

I was astounded to see that once again some small business organizations, and leaders, are about to put an argument on the November ballot that retails without blushing the PG&E lies and propaganda line against the Clean Energy Act and does not represent the views of many of us in the small business community.

As you can see from my recent blog, the current Guardian editorial, and our stories and editorials since l969, PG&E screws our small businesses and residents in many ways: high rates ( much higher than public power cities), frequent blackouts, lousy service, unaccountability, and a propensity to cut off power or force small businesses to buy an expensive bond if they are late on payments. And there's no way to effectively complain about PG&E's terrible service, rates, and glacial moves toward renewable energy.

Most embarrassing of all, the ballot argument retails the big PG&E Lie: the erroneous whopper that the cost to the city of acquiring PG&E's local distribution system would be $4 billion. For starters, the Clean Energy Act never mandates that the city buy PG&E's aging facilities. The charter amendment sets aggressive goals for renewable energy and directs city officials to study the best way to achieve those goals.

Since public power agencies around the country are leading the way on renewables, and since PG&E has already said it can't meet even the state's weak clean energy mandates, the city ought to be looking at taking over the business of selling retail power to businesses and residents. But buying out PG&E's old system might not be the best way.

More: even if San Francisco did buy out PG&E, there would be little or no cost to the city at all. The act would authorize the city to issue revenue bonds to buy electric power facilities. Unlike typical general obligation bonds, the revenue bonds would not be backed by taxpayers, and would be repaid by the money the city would make by selling retail electricity. Revenue bonds are paid off entirely through a dedicated revenue stream. So unless the city can prove in advance with a detailed study that buying out PG&E would bring in enough money to cover costs, there's no way Wall Street would ever buy the bonds.

In short, there is no possible scenario under which the Act could cost money. The opposite is true: Public power cities all over the United States make money, including the public power system in my hometown of
Rock Rapids, Iowa, which has had a successful public power system since 1896. Many public power systems
make large amounts of money while keeping rates well below private power rates. And our figures show that San Francisco would net millions, maybe hundreds of millions of dollars, in revenue from buying out PG&E.
Moreover, PG&E each year yanks upwards of $650 million out of the city with its high rates, according to our study.

So why are some small business leaders once again buying PG&E's Big Lies and once again trying to get small business groups and businesses to sign a ballot argument that undermines their own economic self interest? Would any of them run their own businesses this way? Small business people should steer clear of this embarrassing, self-immolating argument and either support the Clean Energy Initiative or stay neutral.

Most important, the business of PG&E Lies is academic. Because of the federal Raker Act giving San Francisco an unprecedented concession to dam a beautiful valley (Hetch Hetchy) in a beautiful national park (Yosemite), San Francisco is the only city in the U.S. mandated by federal law and a U.S. Supreme Court decision to have a public power system. And the longer the city is in violation of the Raker Act (because it does not have a public power system), the more vulnerable the city is to the tear-down-the-dam movement quietly orchestrated by PG&E and its allies. And that would be a costly catastrophe.

Meanwhile, the supervisors should hold hearings on the economics of this measure and demonstrate how lucrative public power is for cities--and how cheap for businesses and residents. They should also invite small business people to testify about their problems with PG&E. We're posting charts at SFBG.com that show that in California and throughout the U.S., public power is less expensive than private power across the board. B3

P.S. We are doing a major story on how PG&E screws local small business on many levels. If you have specifics and examples with your business, or know of any, please let us know at the Guardian. On guard, B3, who watched today from my office window as the fumes curled up from the Potrero Hill power plant, courtesy of PG&E

*PAID BALLOT ARGUMENT LANGUAGE

Proposition ___ Will Hurt San Francisco Small Business Owners

The Board of Supervisor's plan to takeover PG&E would force San Franciscans to pay an estimated $4 billion for the power system through a dramatic increase in monthly utility bills. If Proposition___ passes the City would lose the more than $20 million a year that PG&E pays in taxes and fees. That means our taxes would need to go up to pay for this lost revenue or basic services, like libraries, street cleaning, police and fire services. It will cost more to do business in San Francisco as small business owners and their families will face an additional $400 to $600 a year expense in utility bills.

Join San Francisco 's Small Business Community in Voting No on Proposition___