PG&E puts $6 million more into Proposition 16 campaign

Pacific Gas and Electric Co. has put another $6 million into Proposition 16, its self-funded ballot initiative that would require the approval of two-thirds of local voters to create new local electricity districts.


The latest contribution, reported Friday, brings PG&E’s contributions to $34.5 million – the entire amount of reportable donations to the campaign.


All of the nine donations listed in state financial disclosure documents came from PG&E. Four of the donations were in seven figures, and there was one eight-figure donation — a $13 million contribution on Feb. 26.


The opponents of Proposition 16, The Utility Reform Network consumer group, have raised about $36,000.


The latest PG&E donation reflects the giant utility’s earlier estimates of the cost of the campaign. In a statement to shareholders, the company noted 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.

The company believes it was strategically better to try to resolve the issue in a single ballot measure, rather than fight the same battle over and over 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 $2.29 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.

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