But those rewards are directly threatened by a heavily funded state measure, Proposition 16, on the June 8 ballot. The deceptively worded measure, originally called the "Taxpayers Right to Vote Act" until the state Attorney General changed it to a neutral term, would require two-thirds voter approval for any expansion of municipal utilities systems.
For Palo Alto and more than 50 other municipal systems the law could mean severe restrictions on their ability to keep up with the latest technology and sources of power, including newly emerging "green power" energy. This could mean less savings for their customers and less revenue for other city services.
There is a growing furor over the volume of financial support being poured into this proposition. PG&E so far has invested an estimated $3.4 million in getting the measure to the ballot.
The proposed constitutional amendment would require two-thirds voter approval in existing and new jurisdictions for expansion of a municipal utility, rather than the existing simple-majority. Two-thirds approval would be needed by any city or county seeking to form a new publicly owned electric utility.
Attorneys for the Northern California Power Agency (NCPA), which represents municipally owned utilities, are concerned that the measure could even apply to expansion of service to new subdivisions or developments.
Palo Alto Utilities Director Valerie Fong said ambiguities in wording could restrict Palo Alto's ability to join with other utilities in leasing or building transmission facilities for either additional power or green power. One interpretation is that two-thirds approval would be needed in every city and county through which the power lines pass.
Palo Alto this week joined a growing list of communities opposing the measure. The Sacramento Bee, in a rare pre-campaign editorial opposition, cited PG&E rates that are the highest in the nation, and warned that PG&E has 10 applications for rate increases before the state Public Utilities Commission.
Fong said Proposition 16 if approved could threaten Palo Alto's ability to sustain lower electric rates and its historic large transfers to the general fund. For instance, PG&E rates are currently 33 percent higher than Palo Alto's system-wide average, reflecting a PG&E rate increase Jan. 1, according to Utilities Department calculations. Rates vary by category of user. Yet Palo Alto's general fund will receive $11.12 million from the electric utility this fiscal year.
The impact on Palo Alto services, infrastructure and fiscal outlook would be devastating if its electric utility is hamstrung by this "power-grab" by a huge investor-owned powerhouse of a firm. This is a terrible proposal, and we hope voters can see through the millions more PG&E will be pouring into its campaign propaganda in coming months.