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May 18, 2010 > County Board of Supervisors opposes Proposition 16

County Board of Supervisors opposes Proposition 16

Submitted By Gwen Mitchell and Laurel Anderson

On May 11, the Santa Clara County Board of Supervisors adopted a resolution to express its opposition to Proposition 16. The measure would enact a constitutional amendment requiring local governments to secure two-thirds voter-approval before they can use public funds to start up electricity service, expand electricity service into a new territory or implement a Community Choice Aggregation (CCA). If enacted, Proposition 16 would severely impede the ability of California's local governments to create publicly-owned and operated utilities by mandating a difficult-to-achieve vote threshold. Consequently, public power options for local government would be severely restricted.

"The problem with Proposition 16 is it makes it more difficult for communities to choose clean energy options," says Supervisor Ken Yeager, President of the Santa Clara County Board of Supervisors. "Although Santa Clara County is not planning to operate a municipal utility, it's important to preserve the flexibility to do so, if it's in our community's best interests."

Californians generally receive electricity service from one of three types of providers - investor-owned utilities (IOU), local publicly-owned (municipal) utilities and electric service providers (ESP). IOUs, such as Pacific Gas and Electric, have a defined geographic area in which they are legally required to serve customers. A municipal utility is a local governmental entity providing electricity services to residents and businesses in its local area (e.g., the City of Palo Alto Utilities). ESPs provide retail electricity service to customers who prefer not to receive services from the utility that serves their area. ESPs deliver electricity through the local utility's transmission and distribution systems. Under the Community Choice Aggregation option, cities and counties, or a combination of the two, can provide electricity within their jurisdiction through a contract with an electricity provider other than the IOU that would otherwise serve that local area.

"One of the most worrying aspects of Proposition 16 is it would hamper local governments that choose to manage utility rates by providing residents with a range of energy options," said Supervisor Liz Kniss, Chair of the Board's Legislative Committee. "The proposed provision would enact a constitutional amendment requiring a two-thirds voter approval to create a public utility program rather than allow more choice."

A Community Choice Aggregation gives local governments more control over the amount of renewable energy they use and supply to their constituents and more local control over retail electricity rates.

"Limiting local governmental authority on energy decisions by a constitutional amendment is a bad idea at a time when we are moving forward to bring renewable energy to our county," said Supervisor Dave Cortese, District 3. "Renewable energy will save the county millions of taxpayer dollars. Prop 16 would block those savings."

Under the measure, if an authorized local government entity seeks to start up electricity service, it must put the proposal before the voters in the area proposed to be served. Also, before an existing publicly owned utility can expand its electrical delivery service into a new territory, it must receive approval by two-thirds of the voters in the area currently served by the utility and two-thirds of the voters in the new area proposed to be served.

"The new two-thirds vote requirement for local public electricity providers is against the interest of electricity ratepayers, against the public interest, and is a potential setback for renewable energy production," said Supervisor George Shirakawa, District 2.

The measure provides local governments three exemptions from the voter-approval requirements: If the use of public funds has been previously approved by the voters both within the existing local jurisdiction and the territory proposed for expansion; if the public funds would be used solely to purchase, provide, or supply specified types of electricity from renewable sources, such as, wind or solar power; or if the public funds would be used only to provide electrical delivery service for the local government's own use.

"I oppose Proposition 16 as a matter of principle," said Supervisor Don Gage, District 1. "We must preserve the flexibility to explore all electricity delivery options for the Valley Medical Center or other 24-hour facilities we operate."

Other Actions Taken on Legislation

The Santa Clara County Board of Supervisors voted to support Proposition 13, which would prevent construction performed to seismically retrofit buildings from triggering a reassessment of property tax value. This would ensure equal property tax treatment of property owners who make seismic-safety improvements to an existing building, regardless of the type of structure. Additionally, Proposition 13 would allow property owners to make older buildings safer and keep them standing in the event of an earthquake without incurring higher property taxes in the future.

The Board also voted to support two bills pertaining to Organ Donation: Support SB 1395 (Alquist), which would require the Department of Motor Vehicles to ask each person applying for or renewing a driver's license or identification card to indicate his or her consent or denial to be an organ or tissue donor upon his or her death. The bill would also authorize the creation of a registry for living donors who want to be considered for kidney donation during their lifetime. In a separate but related action, the Board voted to support SB 1304 (DeSaulnier), which would require paid, protected leave for employees who volunteer to donate bone marrow or organs.

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