Herrera seeks rule change to block PG&E efforts to kill consumer choice
Utility's deceptive campaign, broken promises on Community Choice Aggregation demand expedited action by regulators, City argues
SAN FRANCISCO (Jan. 11, 2010) -- City Attorney Dennis Herrera today petitioned the California Public Utilities Commission for tougher regulations to prohibit electric utilities from engaging in marketing campaigns and other abuses of their monopoly position to undermine Community Choice Aggregation, a program intended to enable local governments to develop cleaner, renewable energy sources and ultimately stabilize consumers' electricity costs. The move comes in reaction to efforts by Pacific Gas & Electric Company to kill consumer choice, contrary to promises it made to state regulators to support CCA, the consumer energy alternative made possible by state legislation in 2002.
Despite the company's public commitments to CPUC as late as Nov. 2005 that "PG&E has stated before and states again that CCA is a consumer choice alternative that should be enabled," a PG&E-controlled political committee last month targeted San Franciscans in a direct mail campaign that savaged the City's consumer choice plan as a "risky scheme" that "will establish new bureaucracy," and enroll unwilling customers "whether you like it or not." Last October, a PG&E Corp. executive vowed to shareholders that the company would "stand up and resist efforts to take over our customers, and those efforts by municipal government." The San Francisco-based utility also emerged last year as the primary financial backer of a proposed statewide ballot measure to impose a two-thirds majority vote requirement to authorize a wide variety of energy services programs, including CCA -- an all-but insurmountable electoral burden.
"We cannot let Californians be denied the benefits of cleaner, cost-effective energy alternatives -- consumer choice is simply too important to ratepayers and the environment," Herrera said. "The California Public Utilities Commission exists to police giant utilities, to assure that their monopoly advantages aren't abused to exploit consumers or frustrate the policy objectives of our state lawmakers. Yet that is exactly what has happened since PG&E locked CCA into its crosshairs. It is critical for state regulators to move quickly and decisively to tighten regulations, and restore teeth to the law as the legislature intended. I am enormously grateful to Sup. Ross Mirkarimi for his longstanding leadership on CCA as LAFCo chair, and to SFPUC General Manager Ed Harrington and his staff for their expertise and hard work to fulfill the promise of consumer choice."
Supervisor Ross Mirkarimi, who as chair the Local Agency Formation Commission, or LAFCo, led the successful effort to adopt a Community Choice Aggregation plan for San Francisco aimed at developing a significantly greater share of energy from clean and renewable sources, said: "We know from its long history that PG&E will act ruthlessly to protect its monopoly, which already charges some the highest rates for electricity in the nation. But this time, it's not just consumers who will pay the price for PG&E's tactics -- it's also our environment. PG&E's misleading direct mail campaign in San Francisco and its statewide push for a self-serving constitutional amendment make clear that regulators must act quickly to defend a state law that has frankly been undermined by CPUC's lax regulations. Today's petition by City Attorney Herrera, which is supported by San Francisco Public Utilities Commission General Manager Ed Harrington, demonstrates that City leaders are united to demand that regulators restore the promise of Community Choice Aggregation -- to protect consumers as well as the environment."
"Consumer choice is one of the most important goals of CleanPowerSF," said SFPUC General Manager Ed Harrington. "San Franciscans deserve the opportunity to clearly choose and compare their energy providers based on facts like transparency, price stability, and renewable power generation."
The California law that enables local governments to offer an electric supply alternative already provides that monopoly utilities must cooperate with Community Choice Aggregation. But regulatory rules intact since PG&E's previous professions of support for CCA are now widely exploited by the state's largest utility, according to Herrera's petition, "rendering the Legislature's carefully crafted CCA law a meaningless piece of paper." Given the urgency created by PG&E's multi-million dollar bid to kill consumer choice alternatives statewide, the City is requesting the CPUC to give expedited consideration of its petition to tighten regulations and protect consumers as soon as possible.
A copy of Petition of the City and County of San Francisco to modify decision 05-12-041 and request for expedited consideration (Rulemaking 03-10-033, To Implement Portions of AB 117 Concerning Community Choice Aggregation); California Public Utilities Commission, January 11, 2010, is available on the City Attorney's Web site at http://www.sfcityattorney.org/.
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