The Pacific Gas & Electric monopoly is the primary financial sponsor of the initiative, having contributed $28.5 million through March 26, 2010. However, Prop 16's opponents have only raised $40,000 through late March. The initiative reduces the ability of people to choose between private and public utility companies. Also, holding local elections where people vote on whether to have a private or public utility company is expensive.

Why UCAN Opposes the Initiative:  Generally UCAN opposes most all initiatives.  In most all cases they represent hatchet-style public policy making that benefit the private interests that bankroll the initiative.   They rarely, if ever, truly serve the public interest.   Moreover, the initiatives are so broadly worded that they often end up in the courts for a decade or more.   Once ina while, a non-technical, truly public-interest intiative like Proposition 101 or Proposition 13  appear and they are worthy of citizens' consideration.   But this year's Proposition 16 is an example of bad public policy trying to overturn a thoroughly considered and reasonable state law because one large interest (PG&E) is financially effected by it.

The Back Story:   The ugly truth is that utilities are addicted to ratepayer money. Rather than "heavily" regulating the utilities,  over the past 6 years, the CPUC has played more of a role as their enabler -- never finding a request, no matter how absurd, that it cannot rubber-stamp after chopping a few token dollars from around the edges. It has been many years since the CPUC said a firm "no" to the utility.

Amongst the most poorly regulated utilities in the state is PG&E.  In the past five years, PG&E has shown an embarrassing level of incompetence in detecting and repairing gas leaks. The utility performed a quality check of their 2005-2006 effort only in Sonoma County and found that the results were so bad that they had to start from scratch and do their entire system over. PG&E found three times as many leaks the second time around in 2008-2009. One would hope that addressing gas leaks would be the highest priority of a regulated utility, but PG&E seems to be flailing here.  And PG&E has some of the most expensive information technology equipment in the country (all funded through rates). PG&E also proposed a "Business Transformation" effort to change its corporate culture and cut costs; it failed miserably, and resulted in half a billion dollars in savings lost.

Not surprisingly, this has led local municipalities within the PG&E service territory to conclude that they can serve their constituents better than PG&E and they've availed themselves of a state law that allow for municipalitites to purchase power for their citizenry.   PG&E is very threatened by this "municipalization-lite" effort by some of its customers and is fighting back the only way it knows how -- with money.   In this case, it wants to buy an election.  It is using its (your) money to outspend the initiative's opposition 50 to 1, while spending tens of millions of dollars to squash the nascent competition.

A consortium of public utilities filed a lawsuit on March 18 to remove Proposition 16 from the ballot. Plaintiffs in the lawsuit include the Merced Irrigation District, Modesto Irrigation District, Sacramento Municipal Utility District, the San Joaquin Valley Power Authority, and The City and County of San Francisco. The legal grounds asserted in the lawsuit claims that Proposition 16's language is misleading and, thus, needs to be removed. Court-ordered removal of a ballot measure because of misleading language is rare but not unprecedented. 

You can read more on the Prop 16 lawsuit.

You can read more on the California Public Utilities Commission hearing on Proposition 16.