Court Lifts Prop. 16 Hurdle

By Published On: May 7, 2010

A judge rejected a move by a coalition of California cities and public utilities to block a ballot measure that would require a two-thirds majority vote by area residents before local and regional governments could launch community choice aggregation programs. The Sacramento Municipal Utility District, San Francisco, and other public agencies had sued to keep Proposition 16 off the June 8 statewide ballot, claiming that the language in the measure constituted fraud. Proposition 16--solely financed by Pacific Gas & Electric --aims to change the California constitution to require a two-thirds vote before local governments can use taxpayer funds to create or expand publicly-owned utilities. The suit’s petitioners argued during a May 4 hearing that the measure was fraudulent because it didn’t state its true purpose: to stifle potential competition for PG&E customers by making it harder to form public utilities. But in his ruling this week, Sacramento Superior Court Judge Allen Sumner noted that the text of the initiative is indeed accurate enough and that the measure could remain on the ballot. “The question is whether the title and summary of Proposition 16 adequately disclose its purpose--not the motivation of its sponsors,” Sumner wrote in his decision. PG&E, which has committed about $35 million dollars to the campaign to pass Proposition 16, won in court. However, the company suffered a setback on another front two days earlier when the California Public Utilities Commission warned it to cease certain tactics it’s using to try to derail an emerging community choice aggregation program. Over the past few months, PG&E has engaged in a direct mailing and phone campaign targeting ratepayers in Marin County. Marin is launching a non-profit community choice aggregation program this month, known as Marin Clean Energy. PG&E is aggressively courting its customers in the area, attempting to get them to opt out of the CCA and remain with the investor-owned utility. The CPUC sent a letter to the utility on May 3, warning it that the opt-out campaign was violating state laws. Specifically, CPUC executive director Paul Clanon wrote that some of the mailers were misleading. Clanon also stated that PG&E itself can’t directly call customers and then transfer them to customer service to opt out of the CCA instantly over the phone. “We’ve been assured that PG&E will correct opt out errors,” Clanon said. “Everyone here wants to avoid customer confusion.” PG&E has said it was reviewing the letter and would respond in a few days.

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