Wednesday, June 02, 2010

Don't Believe Everything You See in Political Ads - Vote NO on Proposition 16

If you don't live in the state of California, most of this post isn't really intended for you.  Perhaps you'll find it interesting nonetheless, but if not, please accept my apologies in advance.

If you do live in California, you probably don't need reminding that elections are on June 8th.  Republican candidates are busy calling each other "liberal" and trying to position themselves as the true conservative choice, Democratic candidates seem few and far between (indeed, are any Democrats running for governor or senator in this election? The state web site tells me that there are quite a few, but I haven't seen any on television yet...), and a number of propositions are on the ballot that are struggling to get attention in the midst of it all.

I'm not writing to discuss the politicians themselves.  This is just a primary election after all, so there will be plenty of time to go over them when the November elections come along (if I even care to do so at that point).  I'm especially interested in talking about these ads I've been seeing for Proposition 16, which is being called the "Taxpayers Right to Vote Act" by its proponents.  If you've seen the ads, you probably already know the Proposition I'm talking about.  We're told about how the government wants to be able to buy energy companies, an act which (naturally) costs millions of dollars, and that taxpayers don't have any say in the matter.  Citing the tough economic times (a truth generally even more profound in California than elsewhere in the nation, I think I can say without contradiction), voters are encouraged to pass this proposition, which would change California's state constitution to require voter approval before such energy purchases can take place.

The commercials do their job well.  Indeed, it's difficult to see one of these commercials and see anything especially controversial about it.  We live in a democracy, after all.  Voter approval is a good thing.  If we're being denied it, we should do something about it, right?  Especially when our tax dollars could be wasted if we fail to act!

Before we go further, here's the actual text of the summary from the official voter information guide, as distributed by the state board of elections.
IMPOSES NEW TWO-THIRDS VOTER APPROVAL REQUIREMENT FOR LOCAL PUBLIC ELECTRICITY PROVIDERS. INITIATIVE CONSTITUTIONAL AMENDMENT.
• Requires local governments to obtain the approval of two-thirds of the voters before providing electricity service to new customers or expanding such service to new territories using public funds or bonds.
• Requires same two-thirds vote to provide electricity service through a community choice program using public funds or bonds.
• Requires the vote to be in the jurisdiction of the local government and any new territory to be served.
• Provides exceptions to the voting requirements for a limited number of identified projects.

The first thing that stood out to me to question the line of reasoning in the ads was the fact that the bill does not simply call for voter approval, but a two-thirds "super-majority" to allow government action in this area.  Something smelled fishy, so I decided to do a bit more digging.  It appears that the major source of funds for these commercials is PG&E (the Pacific Gas and Electric Company), and that they are responsible for putting it on the ballot in the first place.  Is it really plausible that an energy company is acting in the interests of consumers when they suggest that consumers vote for this proposition?

Of course, even if we grant that PG&E has a clear self-interest in keeping governments from entering the energy industry (thus creating competition against PG&E), that doesn't mean that they're wrong.  The taxpayers' right to vote is a powerful thing.  Some would argue it's the very thing this nation was founded upon.  There are few mantras that can mobilize voters so effectively.  We need to go further.

It may help clarify matters if we look at the reality behind the issue of government-run (or sponsored) energy.  It's actually not terribly common in California.  The voter guide, in the "background" section, says that "investor-owned utilities" (such as PG&E) provide 68% of all electricity service to Californians.  "Local publicly owned electric utilities" provide 24%, and "electric service providers (ESPs)" provide 8% (I didn't know what an ESP was, either.  I'm not sure how much this helps, but here you go.  Suffice it to say, that part's only 8%).  Generally speaking, for those municipalities able to provide local service, they've tended to be able to do so for considerably lower rates than their larger private counterparts, which may be why some areas are looking into providing this kind of service now.

Obviously, PG&E would rather not lose their business, and they've been spending quite a large amount of money over the past few years fighting such competition, especially in Sacramento and San Francisco (where PG&E is based).  Unfortunately, unlike the privately-owned PG&E, publicly-owned agencies are forbidden from spending money on political campaigns.  So, while PG&E looks to be spending some $46 million (money earned from the electricity bills of its customers, no doubt) to try to get Proposition 16 passed, very little has been spent to date in opposition to it.

It's no secret that popular distrust of the government is at a high point (perhaps an all-time high).  Incumbents (both Republican and Democrat) are losing elections to politicians promising to change the way that government works. Proposition 16 is well-timed for success in this context.  It sometimes appears that all you have to do is say that the government wants something, and the popular opinion is very quickly turned against it.  What?  The government wants to start an electric company?  Not on my dime!

Do I sound like I'm being cynical?  That I'm accusing PG&E of manipulating voter sentiment for their own ends?  How about this quote from PG&E's CEO Peter Darbee, said during a March 2010 PG&E shareholders meeting (warning, that's a 2-hour long speech):
"[It] occurred to us that people aren't very pleased with the job that government is doing these days in general, you know … The June time frame looked ideal and in the context of what everything that is happening with government today -- the dysfunctionality of it -- we concluded that it was a very ideal time!"
I hope that I don't come off as some pro-government liberal in voicing my opposition to this Proposition in favor of more government-run energy.  But in case I do, it's worth noting the level of conservative backlash against it. The Chamber of Commerce of San Diego (a strongly conservative city if ever I saw one!) voted 79-2 (counting a series of votes together, not just one) against Proposition 16, and a San Diego Union Tribune editorial says that calling it the "Taxpayer Right to Vote Act" "...ranks right up there with the most deceptive political advertising slogans of all time -- and that covers a lot of deception."  The Republican Party of Los Angeles County is against it.  The Napa Valley Republican Central Committee opposes it on the grounds that PG&E's rates are already the highest in the state.  I could go on....

It's a well-established conservative mantra that tells us that competition is good for business. PG&E threatens to become an even further entrenched monopoly if Proposition 16 passes, making it even harder for competition to gain enough foothold to thrive in the open market.  This is bad for consumers, and bad for democracy.  Please vote "NO" on Proposition 16 on June 8th.

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