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Tuesday, November 14, 2006

The PG&E Aftermath

I have delayed my writing of the PG&E decision until a week after the election (hard to believe it has only been a week). The problem with any analysis is that while H&I were extremely close elections, the fact that Sacramento had to approve it as well and it wasn't even close to passing in Sacramento, makes it difficult to do a true post mortem. It is disappointing though not surprising that it would fail by a large margin in Sacramento. After all, the benefits to Sacramento rate payers are not as immediately evident and it is far easier for PG&E to scare them.

Still I believe that had H & I passed in Yolo County it would have sent several loud and clear messages to PG&E. That message is mooted by a split decision. Dunning thought this was an odd outcome not understanding why someone would vote for one and not for the other. But in actuality it's not that odd with one passing by 400 or so votes and the other failing by a similar margin, as close as the two are to each other, this amounts to little more than random error by a small number of people not fully aware that these are two sides of the same coin, it's likely that 98 percent of the people voted the for both and only a tiny percent split their vote.

And yet, even granting the large defeat in Sacramento County, I'm a bit disappointed with the Yolo County results. Had Yolo solidly voted to support SMUD, it would have been a loud and clear signal. First, that PG&E could not buy our votes with their ten million dollar plus campaign, fraught with deception. Second, that we were not happy with our service from PG&E. (Obviously PG&E prevailed by casting doubt about the SMUD move more than by convincing us that we liked them).

This was a rare election in so many ways. There was near animous support among Yolo County Elected officials--every member of the three major city councils and all five members of the Board of Supervisors won. How is it then possible that PG&E wasn't soundly defeated in Yolo County?

The obvious answer was the slew of deceiving mailers and TV ads in Yolo County. PG&E managed to turn the strength of SMUD into an uncertainty by casting doubt on their ability to lower the bill for rate payers. This had to do with the costs of annexation. Watching the debate between SMUD and PG&E, it seemed that the pro-H & I side was ill-prepared for this argument even though they knew it was coming. Frankly after watching the debate, I had doubts myself about their plan even though I knew going in I was going to vote for SMUD regardless. The PG&E arguments were extremely effective unfortunately.

The second problem was that just like Target, PG&E tried to turn the issue of the environment--one of their weaknesses in their favor. So they launched a massive campaign to convince Yolo County voters that PG&E was environmentally friendly and perhaps as importantly that SMUD was not environmentally friendly (easier to convince people of negatives). They even went as far as to compare PG&E's effort to the No on X effort which we covered.

The bottom line of the PG&E effort was to convince the rate payers that they may not like the current system, but a new system may be worse, so stick with the devil you know. And when you have a resource advantage, it's easy to convince people to stick with the status quo by voting no. The no side almost always has the advantage in these types of races.

It is obviously difficult to fight back when you are facing a 10 million dollar plus campaign. But one way that might have been helpful would have been for each of the 20 officeholders to contact their core constituencies with a direct message of support for SMUD and an explanation of why it was important for them to support H & I. I'm not being critical of the SMUD effort, because they did very well facing overwhelming odds and an overwhelming resource disadvantage. At the end of the day, given that disparity, it was hard to win. I had hoped that the voters in Yolo County would see through the smoke and mirrors, but it seems very obvious that PG&E was able to obtain their by creating enough confusion and uncertainty to nudge a defeat on Measure I.

As I said previously, it was rendered moot by the large and overwhelming defeat in Sacramento County. This was a long and difficult process, so it is hard to know if this is the end of the fight or if they will try to revisit it. If they do wish to revisit it, they need to conduct a long and very concerted education campaign prior to the fact and they need to make it very clear exactly how much this will cost, so that PG&E has a more difficult time of mucking the waters.

---Doug Paul Davis reporting