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Measure H: Round 1, Utilities Fight

Posted on: Friday, 2 June 2006, 21:00 CDT

By Matt Weiser, The Sacramento Bee, Calif.

Jun. 2--Measure H on the June 6 ballot is a product of the complex battle between electric utilities to serve 77,000 customers in Yolo County. But the measure's question for Sacramento voters is simple:

Should Sacramento Municipal Utility District customers get to vote on all annexations planned by the district?

The measure was placed on the ballot in a petition drive engineered by Pacific Gas and Electric Co., which opposes SMUD's effort to annex its territory in Yolo County, including Davis, West Sacramento and Woodland.

Measure H is binding on SMUD -- it requires the utility to put all future annexations on the ballot -- but the results of those elections are only advisory. If voters dislike a particular annexation, SMUD can still approve it.

And Measure H decides nothing about the Yolo annexation. There will be a separate measure on the November ballot, sponsored by SMUD, to decide that.

That one will be binding: If voters say no to the annexation, SMUD cannot pursue it.

SMUD, a public utility, believes it can provide better service to Yolo residents than privately owned PG&E. It also believes it can do it more cheaply, both for those residents and existing customers in Sacramento and Placer counties, by spreading costs and by not facing the same profit pressure as PG&E.

"When you get an infusion of new customers, they bring a monetary benefit with them that we otherwise would not have had," said Genevieve Shiroma, president of the SMUD board.

Over the past 15 years, SMUD residential rates have averaged 20 percent less than PG&E's. If the annexation goes forward, SMUD guarantees Yolo customers would pay at least 2 percent less than the current PG&E rate.

But PG&E doesn't want to lose customers. It believes SMUD underestimates the costs, which could end up saddling customers with big bills. The utilities also disagree on the value of PG&E assets in Yolo County -- the power poles, lines and substations -- which SMUD would have to buy.

"They're basing the economics of their effort on it being a very low price. We think they're wrong," said Jeff Raimundo, spokesman for the Coalition for Reliable and Affordable Electricity, PG&E's campaign committee. "People won't know exactly what the price will be until after a court rules sometime in the future."

PG&E is spending lots of money on Measure H, and it will spend more on the November proposition. It is the sole contributor to the Coalition for Reliable and Affordable Electricity; through May 23 it gave almost $2.7 million and spent just over $2.5 million on the campaign.

PG&E has hired an all-star cast to convey its message. Former Sacramento City Manager Bob Thomas is a consultant to the campaign, and former KCRA news anchor Stan Atkinson is its public face. Thomas had been paid $18,000 through May 20, and Atkinson and his ATY Media Productions, $198,000.

Shiroma called PG&E's spending on the campaign "obscene." But Raimundo defended it, saying SMUD has an advantage in being able to push the annexation in its public meetings, on its Web site and in billing inserts.

"I'm not sure there is an imbalance at all," said Raimundo.

Three SMUD board members, including Shiroma, have formed a separate campaign committee, SMUD Customers Say YES to Low Rates, to support the November ballot measure. It raised $276,330 through May 31, organizers said. The group said none of the money is being used in the Measure H campaign.

Through March 31, the committee's largest gift -- $90,000 -- came from the Plumbers & Pipefitters Union Local 447.

The committee's second-largest gift through March 30, $25,000, came from Susan Brewster McClatchy, widow of James McClatchy, an advocate of public utilities and former publisher of McClatchy Newspapers, parent company of The Bee.

The committee, along with the rest of the SMUD board, has not taken a position on Measure H.

"The SMUD board felt that the official focus needs to be on the November ballot, which is the binding vote," said Shiroma.

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Copyright (c) 2006, The Sacramento Bee, Calif.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Sacramento Bee

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