The best way to boost the business climate in this recession era is to promote consumer spending
EDITORIAL Just in time for the holiday season and the colder weather Pacific Gas and Electric Co. wants to shift millions of dollars in fees off big industrial customers and force residential consumers to pay more for natural gas.
The move would set a terrible precedent, and San Francisco officials should join the consumer groups that are calling on the California Public Utilities Commission to reject the plan.
At issue is California Alternative Rates for Energy (CARE), a state-mandated program that helps low-income consumers pay for basic gas service enough to heat their homes and cook their food. CARE costs PG&E nothing; the entire subsidy system is paid for by modest surcharges on every utility bill in the state. But now the biggest gas users giant corporations like Exxon Mobil and Chevron want to stop paying the surcharge, and PG&E, along with San Diego Gas and Electric and Southern California Edison, is taking up their cause. The three giant utilities have asked the CPUC to reduce their subsidy contribution by $90 million. Residential customers would pick up the slack. Why? Jeff Smith, a PG&E spokesman, told Los Angeles Times columnist David Lazarus that "We've got to try to help make it more attractive for businesses to do business in California."
But Chevron and Exxon Mobil aren't suffering from a hostile business climate in this state. Both have reported record profits in the past year. The CEO of Exxon Mobil, Rex Tillerson, was paid $16.7 million; Chevron's CEO, David O'Reilly, made $15.74 million. The fee shift wouldn't help small businesses much; it's based on how much energy a customer uses, so the big energy-intensive industries pay the most.
The best way to boost the business climate in this recession era is to promote consumer spending which means putting more money in the pockets of residents. Raising the gas bills of people who are already hurting will have the opposite effect.
"It's an absolute outrage that the biggest companies would be given a discount on the backs of ratepayers," Mindy Spatt, media advocacy director at The Utility Reform Network (TURN), told us. "Everyone's so worried about making the climate good for businesses, but what about the climate for people?"
A CPUC administrative law judge ruled against the utilities in November, but the case will go to the full commission, possibly as soon as Dec. 18. (Details are online at the Bruce Blog at sfbg.com.)
San Francisco has an interest in the outcome, since the city's economy will take another hit if PG&E gets away with this. And, of course, it's ironic that the utility would take this step just after it spent $10 million to defeat a local public-power measure (which would have lowered electric rates and helped both small and large businesses, as well as consumers).
The supervisors ought to pass a resolution opposing the plan and City Attorney Dennis Herrera should file a formal statement of opposition on behalf of the city.
In another front on another battleground, state assemblymember Tom Ammiano and state senator Mark Leno are introducing a joint resolution that would put the Legislature on record as supporting the legal challenge to the same-sex marriage ban, Proposition 8, and as raising concerns that the measure violates the equal protection and separation of powers safeguarded in the state constitution (see "Tyranny of the majority," 11/26/08).
Leno told us that the intent isn't to put pressure on the California Supreme Court, which will begin considering the case in January, but to make clear the Legislature's intent that substantial changes to the constitution such as this should go through the more cumbersome revision process.
Joining Leno and Ammiano in sponsoring the bill are Assembly Speaker Karen Bass and Assemblymember John Perez, and state senate president Darrell Steinberg and state senator Christine Kehoe. Leno said he expects others to sign on as well. It's a solid idea, and the Legislature should approve it.