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California and the West | See How They Spin / Behind
the TV Pitch

A Call to Pull the Plug on Prop. 9

October 09, 1998|DOUGLAS P. SHUIT

Opponents of Proposition 9, an initiative that would reduce electric rates, are airing a 30-second television ad featuring Ed Texeira, the retired director of the California Public Utilities Commission's office of ratepayer advocates. The spot is similar to other "No on 9" ads, which featured Thomas Hayes, former state treasurer and now a Sacramento consultant, and Larry McCarthy, president of the California Taxpayers' Assn., which lobbies on behalf of corporate clients.

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The script: Narrator: "Ed Texeira fought utilities on behalf of consumers for years, and saved them over a billion dollars."

Texeira: "I'm volunteering my time to oppose Proposition 9, because 9 would be bad for consumers. Prop. 9 would reduce competition, eliminate the present cap on electric rates, and drive electric rates higher in the long term. Prop. 9 would be a terrible step backward for consumers. In November, join me and vote no on 9."

Narrator: "Vote no on 9. It's a no-win proposition."

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Analysis: Texeira spent 37 years working for the PUC, retiring after four years as chief of the division that represents utility customers in commission proceedings, which is the basis for his commentary.

Often, the PUC's ratepayer advocates did help reduce rate increases requested by utilities. But the savings are relative. Under the PUC and during Texeira's watch, the roughly three-quarters of California consumers served by private utilities were assessed some of the highest electric rates in the nation-- roughly 50% above the national average.

As for competition, Edison, Pacific Gas & Electric and San Diego Gas & Electric, the three major utilities bankrolling the No on 9 campaign, are state-protected monopolies and will remain so even if Proposition 9 passes. In warning that Proposition 9 would eliminate the cap on electricity rates, Texeira does not mention that when the PUC froze rates in 1996, it did so at artificially high levels to help the utilities pay for nuclear power plants and long-term contracts for other forms of expensive electricity.

The Legislature's nonpartisan legislative analyst's office predicts that Proposition 9 will require at least a 20% rate reduction, as opposed to the 10% reduction required under current law. But the legislative analyst said it was unclear how long the rate reduction would last. The California Energy Commission has predicted that next year's rates for residential and small commercial customers could be 24% to 37% below 1997 levels if the measure is enacted.

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