A lot of people I think took for granted that given the amount of money that PG&E spent on Proposition 16, to essentially put public power out of business, that it would prevail. In fact, PG&E was not alone. Mercury Insurance also spent about $16 million to pass Proposition 17. PG&E spent $44 million.
Given the fact that PG&E’s deceptive ads were on TV every day, every hour, heck every minute, I will fully admit I had no faith that the average person would be able to see through the rhetoric. And yet somehow just enough people did.
We have discussed Proposition 16 on these pages a few times, it was known as the “Taxpayers Right to Vote Act,” a deceptive title given the fact that taxpayers already have the right to vote, but this would actually make their voice worth a good deal less as it would require a two-thirds vote before a public utility could extend service to new customers or new territories. It was a naked power play intended to make service expansions such as the proposed expansion of SMUD into Yolo County from four years ago an impossibility.
PG&E was able to defeat that effort, but it cost them $10 million. They obviously felt the threat and sought to avoid such a fate in the future.
Propostion 17 was placed on the ballot by Mercury Insurance and it would have overturned state law prohibiting insurance companies from considering a driver’s insurance history to set rates.
Los Angeles Times analysis found that in counties served by PG&E, voters rejected the measure by large margins while counties less familiar with PG&E supported it. Writes the LA Times on June 10, “Fed up with big bills, distrustful of new meters that show higher usage and chagrined by power shutoffs when payments are late, PG&E’s customers sent a vote of no-confidence to the giant utility this week when they rejected the utility-sponsored Proposition 16.”
According to the San Francisco Chronicle on June 10, “Prop. 16’s strongest showing came in Southern California, which gets its electricity from other utility companies. The measure fared worst in the Bay Area, PG&E’s home. San Francisco, site of the company’s headquarters, voted 67.8 percent against the measure. A majority of voters in every Bay Area county rejected the measure.”
“It shows that the more people know about PG&E, the less popular it is,” said Mark Toney, one of the leaders of the campaign against Prop. 16. “That’s a problem for any company.”
“It sends a message to corporate America that it doesn’t matter how much money they put into this,” said Toney, executive director of The Utility Reform Network, a consumer watchdog group.
Well not exactly.
According to Gale Kaufman, a campaign consultant to the No on 16 effort, the opposition only spent about $100,000 with nearly one-third of that going to an early poll. She told the Sacramento Bee that the poll showed that Proposition would lose convincingly from the start.
“Kaufman said voters didn’t see Proposition 16 as a citizen-empowerment measure, but as a cleverly worded ploy of a single for-profit utility. “(PG&E’s) biggest miscalculation, besides spending all that money, was that they really thought they could trick people by the phrasing they used on that initiative,” she said.”
That is one way to look at it, the other way to look at it is that PG&E took a convincing defeat and turned it into a narrow loss with their heavy spending.
Nevertheless, it would seem that questions about PG&E and the accuracy of their new SmartMeters along with rate increases which drew angry protests last year swayed key areas. These rate increases hit hardest in normally conservative enclaves in Fresno and Kern counties. And so for one of the few times, conservative Fresno and Kern counties joined with liberal portions of the state like San Francisco to vote against Proposition 16.
“When does the Central Valley ever vote with the coast?” asked Bill McEwen, columnist for the Fresno Bee. “The SmartMeter thing really eroded the trust between PG&E and its customers.”
State Sen. Mark Leno a strong opponent of Proposition 16 said on Tuesday night, “I think [Prop 16] represents the epidemic of corporate greed that is so challenging in this country right now, whether it’s banking or the oil industry. I think a victory tonight would really speak to Calfornia voters rebuking the lies and the deceit” spread by PG&E.”
Mark Toney made the comment early on, “PG&E has one thing, and one thing only on their side, which is money. The fact that we’re so close is amazing, given that they’ve outspent us 500 to 1.”
Unfortunately it appears that PG&E even in defeat did not get it.
Greg Pruett, senior vice president of corporate affairs for PG&E, issued a statement that said, in part: “While the election outcome hasn’t diminished our steadfast belief that citizens should have a vote in local government efforts to enter the electric utility business, we respect the decision voters made on this initiative.”
He continued to spew the same rhetoric even as it was their own customers that ultimately rejected their efforts. That had to be a stinging blow.
Mercury Insurance’s statement was equally obtuse, as they continued to play it as a blow to consumers. The company issued a statement Tuesday night which read in part, “Proposition 17 was a pro-consumer initiative that would have lowered auto insurance rates for millions of California drivers.”
California survived two insidious propositions by the skin of their teeth. But more and more I believe this is a flawed process. The original initiative system was supposed to free Californians from the stranglehold that monied interests had on the legislature. The legislature certainly remains strangled, but unfortunately, companies and backers with deep pocket books are generally able to get measures on the ballot, back them with tens of millions, and usually they are able to pass them. A lot of factors played a role in the defeat, many of them had less to do with the measure and more to do with the messanger.
—David M. Greenwald reporting
David… prop 17… I voted against it ONLY because its association w/ Mercury… did you do an analysis of it yourself? if so, could you share?… I don’t recall an earlier analysis on that prop…
Cynically, I think Prop 16 failed largely because of the hubris of PGE: their gall in pushing for a 30% rate hike and their incompetance (if not purposeful deceipt) in putting in their “smart ass meters.” PGE money might well have won the day, had they not been so arrogantly stupid.
I talked to people in Southern Ca who were confused on this issue and really thought government (bad)would mess up their utilities. I thought what a shame for us to be stuck with PGE because of votes down south. Voters in PGE areas knew better, but might have had to live with the decisions of non-PGE customers.
A lot of defeats may be laid to the door of hubris …e.g. BP’s oil disaster, Georgie’s dumb march into the quagmire of the Middle East, to name a few. We don’t want to count on hubris; we also suffered greatly in the Gulf of Mexico and in the Middle East. And corporations could learn to be smart AND devious.
The good thing about Prop 16 is that we’ve all learned that there are greener and cheaper ways to get electricity. Now is the time for us to take a good look at SMUD and the Community Choice Aggregates that Marin just provided (as a choice) to their people and that SF is proposing. We should do that NOW, before PGE tries again (and they will).
hpierce: the council elections took up 90 percent of my time, so I did not cover Prop 17.
Here’s some info: Prop 17 ([url]http://www.smartvoter.org/2010/06/08/ca/state/prop/17/[/url])
I also thought that both of these propositions would pass based upon their well-designed “talking points” that was supposed to speak directly to the voters’ “pocketbook” as well as the usual well-crafted wording designed to confuse those who would/could not take the time to read, analyze and think about it. Both lost, IMO, simply because the voter mood, what with the BP oil spill, Wall St. bailout, Health care battle,increasing disparity between working people losing jobs and homes while corporate executives continue to receive their obscene bonuses, all resulted in an… I don’t trust anything that corporations say-let’s stick it to those bast….ds! voter mood.
Whenever a proposition seems a bit fuzzy to me or I don’t thoroughly understand what it’s all about, I carefully screen the TV ads to see where the money for the ad is coming from. As soon as I noticed that the majority of money in support of Prop. 16 was from PG&E, I knew that a *yes* vote would most definitely not be in the best interest of the consumers.
DMG: “California survived two insidious propositions by the skin of their teeth. But more and more I believe this is a flawed process. The original initiative system was supposed to free Californians from the stranglehold that monied interests had on the legislature. The legislature certainly remains strangled, but unfortunately, companies and backers with deep pocket books are generally able to get measures on the ballot, back them with tens of millions, and usually they are able to pass them. A lot of factors played a role in the defeat, many of them had less to do with the measure and more to do with the messanger.”
Interesting – you trust the voters of Davis to decide development decisions via Measure J and R, but don’t trust the voters when it comes to the initiative process?
Apples and oranges. I don’t see these as comparable. Davis is still small enough that people do not completely relied on paid advertising for their information about an initiative.
DMG: “Apples and oranges. I don’t see these as comparable. Davis is still small enough that people do not completely relied on paid advertising for their information about an initiative.”
Either you trust the voters or you don’t…
Believe me, I am not in agreement with a lot of the state initiatives, for instance the one that voted for high speed rail, at a time of an economic downturn, that we can ill afford. But the initiative process is a way of undoing damage the legislature causes, e.g. Prop 13. Now Prop 13 probably needs some tweaking, but w/o it, huge numbers of seniors would have lost their homes… Or the guarantee that the lottery revenue will be spent on schools (Prop 98?). The initiative process has its flaws as with anything else, but it gives voters a direct say in gov’t. After all, Prop 16 and Prop 17 were defeated…
I would say the bigger problem in CA is the amount of money/benefits paid to gov’t employees that is way out of whack…
“Either you trust the voters or you don’t…”
That’s not true. There are situations I trust the voters and situations where I don’t believe they will get sufficient information to make an informed choice.
DMG: “That’s not true. There are situations I trust the voters and situations where I don’t believe they will get sufficient information to make an informed choice.”
And how do you sort out when the voter can be trusted, and when they cannot?
I don’t sort it out in an operational way, although in general I think the statewide ballot measures do fall into that category.
DMG: “I don’t sort it out in an operational way, although in general I think the statewide ballot measures do fall into that category.”
So are you proposing to do away with the intiative process altogether bc you don’t trust voters when it comes to the statewide ballot process?
You’ve chosen to frame it that way, but largely because I think it’s too easy for someone with large amounts of money to get something on the ballot and passed. There are very few passed propositions that have been put into effect, that are constitution, and that have worked as designed without serious unintended consequences that are nearly impossible to address. So it goes beyond trusting the voters, the mechanism to correct mistakes is difficult to resolve.
ERM states that the initiative process gives voters a direct say in government. “After all, Prop 16 and Prop 17 were defeated..”
Me: Yes, the initative process and elections were designed to give voters a voice. The perversion of the initiative process is that it can and has been taken over by special interests that have sufficient money to buy petition signatures. Real people have to satisfy the initiative requirements with hard work from volunteers. To paraphrase George Orwell, “some have more say than others.” It wasn’t voters who used the initiative process to put Prop 16 on the ballot; it was a corporation. It is so disappointing that ERM mistakes a corporation, such as PGE with a voter. How can anyone mistake an abstraction from a person?
To believe that the initative process gave voters a say is actually swallowing PGE’s message of “right to vote”.
It is grossly mischievious that a simple majority of just over 50% would have required a 2/3 majority for future elections. That is, without Prop 16, we have the “right” to raise a simple majority to bring in competition to PGE; with Prop 16, we would have the “right” to raise a 2/3 majority to bring in a competitor. Which “right” would you rather have? Which “right” did PGE try to push on us?
Since PGE liked “2/3” so much, they should have insisted we have the “right” to pass Prop 16 with a 2/3 majority.
That Prop 16 failed does not necessarily speak to the wisdom of the electorate over expensive advertising. In this case, the slick ads just didn’t compensate for PGE’s hubris. They just needed to spend a bit more of their $1.2 billion in profits last year.
What’s the power of corporate money? The “Harry and Louise” commercials from the health insurance industry are widely credited with crushing the Clinton health reforms. Tobacco ads and lobbyists won over massive medical evidence of a “product that kills when used as directed.” That’s power over life and death. Big Tobacco chose death and profits over life. It was $10 M from PGE that lead to our not getting SMUD 4 years ago. They just needed more money this year because of increasing consumer anger and the entrance of more and better alternative utility sources.
Take home messages: When the electoral process is dominated by monied interests, democracy is lost. Never confuse a corporation with a person. One talks with money, the other with just one small voice per person. Guess which is which.
My faith in the public has risen. I thought for sure that PGE would scuttle public competition by spending what I assume to be 44 million dollars of rate payor money on very deceptive advertising about which they should be ashamed if they had a conscience.
itsme: “To believe that the initative process gave voters a say is actually swallowing PGE’s message of “right to vote”.”
All I meant was the voters were smart enough to see through PG&E’s scheme and defeated Prop 16. The iniative process gave the people the say when they passed Prop 13, no? Or when they passed Prop 98(?)?
DMG: “You’ve chosen to frame it that way, but largely because I think it’s too easy for someone with large amounts of money to get something on the ballot and passed. There are very few passed propositions that have been put into effect, that are constitution, and that have worked as designed without serious unintended consequences that are nearly impossible to address. So it goes beyond trusting the voters, the mechanism to correct mistakes is difficult to resolve.”
I still can’t make out if you want to scuttle the initative process or not? Is that what you are advocating here? To abandon the initiative process altogether? Or tweaking it somehow to make it better? Which is it? And if so, how do you tweak it to make it better, if you don’t want to abandon the initiative process altogether?
I came from the East Coast originally, in a state that has no initiative process. No initiative process has its problems too, bc voters have no way to undo damage that the state legislature does.
I don’t disagree that there are problems with the initative system, and I’m not sure how you get around the problem of some of the abuses of the initiative system – other than trusting the voter to see through the abuses – as they did inre Prop 16 and 17. If you do away with the iniative system altogether, and you don’t like what the legislature is doing, be careful what you wish for…