PG&E's New Strategy to Stop CCA - Goldfinger Comes to Cali

Call it PG&E's "Goldfinger" strategy. Last week, Pacific Gas & Electric's manager of local government partnerships was sworn in as chairwoman of San Francisco's Democratic Party Central Committee (SFDCCC). Her name is Mary Jung. Read that again.

Indeed, PG&E's person in charge of dealing with the City of San Francisco on its energy partnership is now officially in charge of the SFDCCC. Thus, understand that as San Francisco approaches its final action to bypass PG&E under the City's longstanding Community Choice energy program known as CleanPowerSF, Ms. Jung is now in charge of the single committee that endorses San Francisco Democrats' local and state candidates for political office, and allocates SF Democratic Party campaign funds to those candidates.

The Community Choice (CCA) movement in Northern California appears to have caused energy giant PG&E to form an unprecedented new kind of political machine. Failing in its 2010 campaign for a corporate plebiscite to pre-empt the legislature's CCA law allowing California communities (half in PG&E service territory) to choose their energy supplies, the energy corporation is now systematically infiltrating key local and state political positions - positions that give it a disturbing new level of control in state and city politics. Caught ordering highest level staff to spy on energy activists, PG&E has recently asked a California Public Utilities Commission Administrative Law Judge for a protective order attempting to seal details of how the top management of PG&E infiltrated and spied on activists in the months following its failed 2010 proposition to block Community Choice in California.

Mary Jung's appointment signals more than just a new, more virulent PG&E machine, but also appears to outline a more insidious corporate strategy. The story of Jung's election reeks of political manipulation. Replacing the progressive former Board of Supervisors President Aaron Peskin, a leader for city progressives, who had retired from the post and did not seek re-election, a mysterious thing happened at the DCCC election meeting last week - a classic kind "accident by design": while many members of DCCC claim to be progressive Democrats, somehow nobody ran against Ms. Jung. An expected progressive challenger to the PG&E government partnership manager's campaign to chair the central committee somehow failed to formally announce candidacy at this meeting - and so, as if by mistake or some hard to imagine consensus, PG&E's government relations person has been unanimously voted chairwoman of San Francisco's Democratic Party Central Committee.

The San Francisco Examiner spinned the story of a takeover of the notoriously progressive committee by a "Moderate," and said nothing about the spectacle of badboy energy corporation PG&E's coup over San Francisco politics. The election of Mary Jung as SF Democratic Party chair would be merely disturbing were it not for the fact that California Jerry Brown's number two and shadow, Nancy McFadden, was hired away from PG&E as Senior Vice President of PG&E, and a woman personally in charge of blocking a major movement by its customers to win energy independence from PG&E under Community Choice Aggregation. Today both Sacramento and San Francisco appear to be under this corporation's political control.

The move signals what the new PG&E CEO calls "finding our way" again after the energy corporation's failed $60M 2010 campaign to block the Bay Area Community Choice movement's efforts (Proposition 16). Community Choice (CCA) is now active in cities and counties throughout PG&E's service territory - to depart from PG&E power to competitive suppliers, and to localize communities' power supplies through renewable energy and customer-owned efficiency measures. Assembly Member Jerry Hill wrote recently in the San Jose Mercury News that Californians should not be fooled by incoming CEO Anthony Earley's brand-new $10 M public relations campaign to make Californians think well again of PG&E, whose political attacks on CCA led to the early retirement of former CEO Peter Darbee after voters rejected Prop 16 by 300,000 votes.  PG&E had already spent hundreds of millions of dollars lobbying against and litigating against Community Choice Aggregations in San Francisco and Marin, not to mention Sonoma County and San Joaquin County, since the CCA law was adopted in 2002. Prop 16 masterminds Darbee and McFadden decided to roll the campaign donation dice and spent $60M to fool California voters into blocking CCAs with a two-thirds supermajority requirement before municipalities could implement - all across the state. It would have turned a decade-long state process to make CCA possible, and impose a Prop-13 style handcuffs on municipal energy in the state. After losing PG&E's record spending initiative against a hardly funded grassroots campaign of CCA activists at powergrab.info, CEO Peter Darbee wrote a concession letter to the public comparing himself to British Prime Minister Tony Blair, claimed to be working on high principles, and said PG&E would "respect the wishes of  voters." Is this what the new PG&E CEO meant in his new PR campaign claiming PG&E hat "lost its way"?

Because PG&E's "local government partnerships" provide its bastion against CCA programs (PG&E has made partnership funding dependent on not implementing CCA), Mary Jung's role in fighting CCA cannot be overstated, and her election to this post is deeply disturbing. As many other California counties (ironically awakened to CCA by Prop 16) are now moving to implement energy localizations (such as the counties of Alameda, Humboldt, Yolo, San Luis Obispo, and Santa Cruz), PG&E's strategy has in fact shifted to poisoning the regulatory environment for retail competition through state-sanctioned cost-shifting between generation costs and distribution costs to make CCA customers pay for generation costs even if they find new power suppliers.

That is not all. PG&E quietly won major reversals of state policy in the first months of the Brown administration. The company has persuaded Jerry Brown's CPUC Commissioners to undermine longstanding basic principles against cost shifting between customers, and California's only great achievement in conservation policy in the past quarter century - "smashing" the state's landmark conservation incentive system of block tier pricing early last year in the PG&E General Rate Case.  After orchestrating the 1996 deregulation bailout, 2000 energy crisis and subsequent bankruptcy bailout, bullying the CCA movement like a monolythic industrial nightmare, and leading the global nuclear industry revival, this energy corporation has infiltrated the highest levels of political power in Sacramento and San Francisco, even beyond the wildest dreams of Willie Brown. Meanwhile, the CCA Crimes Act, AB976, introduced by a PG&E affinity union, just passed the Senate Appropriations Committee, would create a special new crime in state law that only applies to CCA consultants (like Local Power Inc., my company, which created CCA), who work for a CCA in preparation for implementation of a local energy service, would be classified as criminal if it helped the same government implement that CCA program.

In short, PG&E's "new way" is to take it underground - not to play politics publicly, but secretively, as if to imitate not Tony Blair, but James Bond, or Goldfinger. Given PG&E's claims to have taken a new turn and reformed itself, following the assault it has already conducted against local and state government in recent years to block Community Choice, clearly there is a strong case here for illegal anti-competitive behavior under federal anti-trust laws, as well as evidence of the need to prevent this kind of political corruption from continuing to threaten the sovereignty of California's state and municipal democratic institutions.