Vote NO on Proposition 16 – June 8, 2010 California Statewide Election

The Green Chamber Opposes Proposition 16 on the California June Ballot

The Green Chamber believes Prop. 16 would reduce opportunities for green businesses, as well as for California communities that want to increase their renewable power supply. Prop. 16 is clearly aimed at heading off competition in the utility sector, and we think that’s the opposite direction the state needs to go in if we are to meet our clean air and energy goals.

SUMMARY OF PROPOSAL
Prop 16 would impose new voter approval requirements on local governments before they can use “public funds”—defined broadly in the measure to include tax revenues, various forms of debt, and ratepayer funds—to start up electricity service, expand electricity service into a new territory, or implement Community Choice Aggregation.

• First, before a government entity could start up electricity service, it must receive approval by 2/3 of the voters in the area proposed to be served.
• Second, before an existing publicly owned utility could expand its electric delivery service into a new territory, it must receive approval by 2/3 of the voters in the area currently served by the utility and two-thirds of the voters in the new area proposed to be served.
• Third, the measure would requires 2/3 voter approval for a local government to implement a CCA.

Prop 16 provides three exemptions to local governments from these voter approval requirements:

• For use of public funds that have been previously approved by the voters both within the existing local jurisdiction and the territory proposed for expansion.
• For public funds that would be used solely to purchase, provide, or supply specified types of electricity from renewable sources, such as wind or solar power.
• For public funds that would be used only to provide electric delivery service for the local government’s own use.

The Secretary of State’s page describing Prop 16 (including full text of the measure).

SUMMARY OF ARGUMENTS
Endorsements for and against are listed on the websites of the primary organizations representing each side of the ballot measure.
Pro

• Voters should have say before local governments make huge commitment. The choice to go into the retail electricity business can cost hundreds of millions of public dollars and debt that future generations must repay. Given the huge cost and long-term commitment, voters should have the final say.
• Choice between service cuts and more taxes. With most local governments in California today saddled with deficits and debt – police, fire and other public services are already being cut in many places – committing resources to the complicated retail electricity business might risk more severe cuts to basic services or new taxes and fees.
• Informed decisionmaking. A vote requirement will ensure a decision by local government leaders to go into the risky and costly retail electricity business gets the public discussion it deserves.

Con

• Limiting choices. Prop 16 drastically limits consumer choices on who provides you with electricity. Prop 16 replaces the current process that allows communities to choose non-profit utilities with a process that would require a super-majority for any choice other than PG&E.
• Maintaining utility monopoly. Prop 16 lets the for-profit utilities in California raise electricity rates again and again, by protecting their monopoly and eliminating competition. Prop 16 is paid for by a single corporation to benefit a single corporation. PG&E has spent millions to defeat public power initiatives throughout California, and has already spent $30 million to pass Prop 16.
• Harming clean energy initiatives. Prop 16 would prevent government entities from implementing clean energy measures. PG&E currently gets only about 14% of its electricity from renewable energy – compared to 80% from fossil fuel and nuclear– and will fail to reach the state-mandated minimum of 20% by this year.