Pacific Gas and Electric Company has pumped an additional $9.5 million over the past five days into its campaign to pass Proposition 16, which would require the approval of two-thirds of local voters to create new local electricity districts.
The infusion of funds brings the total amount raised on behalf of Proposition 16 to $44.2 million — far above the $35 million that the company originally budgeted for the campaign.
All of the money has come from PG&E itself, except for a $91,258 contribution from the state Chamber of Commerce. Of the 15 donations, the largest single contribution was $13 million on Feb. 26.
Polling data on the contest are not publicly available but the addition of so much cash so close to the June 8 election – coupled with the lack of serious opposition — suggests that the passage of Proposition 16 is uncertain.
Opponents of Proposition 16, led by The Utility Reform Network, have raised about $36,000, according to state campaign disclosure documents.
In a statement to shareholders, the company noted earlier that the per-share cost could be 6 cents to 9 cents to finance the campaign, which translates into a total campaign price tag of $25 million to $35 million. The corporation had $1.22 billion in profits during 2009.
“This one-time item reflects activities outside of PG&E’s regular utility operations and is expected to impact total GAAP earnings between $0.06 and $0.09 per share for the year,” the company’s corporate arm said in a detailed Feb. 19 statement on its Web site.
A number of local jurisdictions have sought to create publicly owned utilities in recent years. PG&E, often in opposition to the local districts, believes that it is better to try to resolve the issue in a single ballot measure, rather than fight the same battle again each time a local municipality seeks to create a new public-power authority.
In a March 1 conference with shareholders, PG&E’s CEO Peter Darbee and President Chris Johns discussed the issue, according to a transcript.
“The idea was to diminish (it), rather than year after year different communities coming in and putting this up for vote and us having to spend millions and millions of shareholder dollars to defend it repeatedly,” the company said. “We thought this was a way we could diminish that level unless there was a very strong mandate from voters that this is what they wanted to do.”
The lion’s share of the political consulting for the initiative has been handled by the Sacramento firm of Townsend Raimundo Besler and Usher, which received about $3 million from PG&E, according to disclosure records. Most of the rest has been spent on advertising and petition signature gathering.
PG&E and its allies believe that the high-dollar issues involved in creating an electrical utility or what are known as “community choice aggregation” districts – such as was set up in Marin County — should receive voters’ careful scrutiny before encumbering local governments with long-term debt. The high threshold of a two-thirds vote, they argue, is justified when large amounts of public money are at risk.
But critics contend that Proposition 16 would cripple the ability of local governments to create publicly owned and operated utilities throughout the state because the two-thirds-vote threshold traditionally has been difficult to surpass. They cite the political battle four years ago when cities in Yolo County tried to join the Sacramento Municipal Utilities District. The move was rejected, in part because of an $11 million campaign mounted by PG&E.