At its March 19, 2010 meeting, the California Special Districts Association (CSDA) Board of Directors considered a recommendation from the CSDA Legislative Committee to formally oppose Proposition 16, a measure on the June 8, 2010 ballot.

After discussing both the proponent and opponent viewpoints, the Board voted unanimously to oppose Proposition 16 and join the coalition against the measure.

Proposition 16 is a misguided initiative that proposes to require two-thirds voter approval before local governments, including special districts, can enter into or expand service of retail power.  Funded by Pacific Gas and Electric (PG&E) to the tune of $28.5 million and growing, this measure is clearly an effort by the energy giant to limit competition and protect financial interests, not open up the democratic process as it has claimed.

In fact, Proposition 16 would make it far more difficult than it currently is for communities to choose an electricity provider other than one of the three investor owned utilities, such as PG&E.  Proposition 16 would replace the existing process by forcing taxpayers to pay for an election of all existing customers every time a new neighborhood would like to join a public electric service area.

Under Proposition 16, for example, should a small neighborhood wish to be served by a public utility, it would be required to win a campaign against a well-financed energy corporation.  Even more egregious, the neighborhood would have to muster a two-thirds vote of every existing customer within the utility’s existing service area, which could stretch for miles.  Meanwhile, PG&E, which is spending tens of millions of dollars on Proposition 16, would simply have to convince one-third to vote “no” in order to block the change.  How is this fair to the average family that simply wants to change its service provider?

The added cost burdens of Proposition 16 would ultimately fall on hard-working California ratepayers.  Proposition 16 would place the same two-thirds hurdle on the creation of community wide clean electricity districts called Community Choice Aggregators (CCA) which allow local governments to purchase blocks of energy and, subsequently, become competitors with private utilities—something PG&E is clearly willing to invest a lot of money into preventing. 

Special districts, and other local governments throughout California, oppose Proposition 16 and are working to have it legally removed from the ballot due to the misleading manner in which it was drafted.  Districts such as Sacramento Municipal Utility District, Merced Irrigation District and Modesto Irrigation District, among others, are leading the way in opposition to this poorly written measure. In support of our members’ efforts and to weigh-in on a measure that could negatively impact local control across the state, CSDA has taken a formal oppose position on Proposition 16.

More information on the measure can be found on the Legislative Analyst’s Office (LAO) website by clicking here.