While city councils throughout Marin were holding their second round of meetings to decide whether to stick with Marin Clean Energy or opt out, a brochure showed up in county mailboxes claiming that the energy plan would "automatically switch" residents' service and "enroll them in a costly energy scheme."

The mailer contained most of the PG&E talking points former state Assemblyman and consultant Joe Nation has been hauling around city councils on behalf of PG&E. A closer look at the mailer uncovers information that residents will have the opportunity to opt out of Marin Clean Energy, but even that bit of information comes with a twist: "All Marin power consumers will automatically be enrolled in this costly program--whether you like it or not--unless you affirmatively opt out or your town or city has chosen not to participate." The Marin Clean Energy plan always has called for an opt-out period that will include alerting consumers four times that they have the opportunity to decline joining Marin Clean Energy.

But PG&E, a monopoly with a boatload of cash, maintains that customers deserve a direct vote on the energy initiative. Allowing a Marin Clean Energy general vote would ensure an unfair death of the energy initiative, say proponents. PG&E would spend whatever it wants to influence the vote.

The mailer from the Common Sense Coalition is a perfect example of what could happen. The coalition is a barely disguised PG&E platform. On the bottom of the mailer's back page is a small-type message stating "this information was provided by the Coalition for Reliable and Affordable Electricity, a coalition that includes Pacific Gas and Electric Company."

A link to a website goes to a page that reproduces the mailer and includes a page to join the coalition. No members of the group are listed other than PG&E. The mailer also includes a postage-paid card on which residents can ask PG&E (or Common Sense Marin) to put them on a mailing list to stay informed. That tactic violates at least the spirit if not the letter of the law that created community choice aggregation, according to Marin Clean Energy comments sent to the California Public Utilities Commission (PUC).

The mailer is an attempt to jump the gun on the opt-out period. In its comments, Marin Clean Energy asks the PUC to revise rules "to bar utilities from soliciting opt-outs at any time." The state's community choice legislation, AB 117, "does not contemplate any role for the utilities in the solicitation of opt-outs." Marin Clean Energy adds that the legislation provides that "the community choice aggregator shall fully inform the participating customers" about their right to opt out of a community choice energy initiative.

The correspondence requests that the PUC consider holding a tighter rein on the rules. Currently utilities are required to notify the state energy division about anything they post on their websites regarding community choice programs. But the creation of Common Sense Marin and the Coalition for Reliable Energy and Affordable Electricity shows how utilities can skirt that rule. Marin Clean Energy asks the PUC to mandate that utilities notify the energy division about "all communications and materials" from the utilities as well as from entities the utilities fund when discussing community choice in general and in specific.

The recent mailer, which carries a prominent "Consumer Alert!" headline, is "one example of these communications," according to the Marin Clean Energy correspondence. "Both the mailer and the website contain objectionable statements" that "circumvent the commission's review requirement." Marin Clean Energy calls attention to the tactics because they allow "opponents such as Pacific Gas & Electric the opportunity to use fear-based marketing to scare customers into opting out."

PG&E is engaged in a two-prong attack against community choice. While actively, and some say unfairly, opposing community choice in Marin and other local areas, the utility embarked on a $3 million effort to gather signatures for an initiative it qualified for the June ballot—a constitutional amendment that mandates a two-thirds vote in any jurisdiction that seeks to create a public-power agency and break away from an existing utility power grid. It also requires an agency like Marin Clean Energy to garner a two-thirds vote in a proposed new expansion area, as well as hold a separate election in the existing service area. In other words, before expanding, a public power agency would need a two-thirds vote from its entire customer base. The measure, say proponents of community choice power agencies, is a bold attempt to use the almost insurmountable two-thirds rule to effectively block local power.

After the second round of consideration among the county's city councils, only Ross reversed course and dropped out of Marin Clean Energy. Novato, Corte Madera and Larkspur already had decided to refrain from joining. In explaining his vote, Ross Councilman Scot Hunter said that in the long run Ross always could opt into Marin Clean Energy if it succeeds. That's exactly the opportunity that the PG&E ballot measure, cynically first called "The Taxpayers Right to Vote Act," is designed to prevent. Ross and the other cities not in Marin Clean Energy would need that super-majority vote to join—and voters in the rest of the Marin Clean Energy jurisdiction also would need to cast a super-majority vote.

San Francisco's PUC is working on its own community choice power plan. Along with Marin Clean Energy, San Francisco has registered complaints with the state PUC about PG&E tactics. On June 11, San Francisco city attorney Dennis Herrera filed a petition asking the PUC to put a lid on the utility's attack on community choice. The petition echoes the Marin Clean Energy warning about sending out misleading marketing mailers.

In December, state Senate President pro Tem Darrell Steinberg and seven other senators, including Mark Leno, sent a letter to PG&E CEO Peter Darbee. It blasts the initiative, now called the "New Two-Thirds Vote Requirement for Local Electricity Providers," and the utility for trying to circumvent the Legislature. It charges the company with using "the initiative process to pursue PG&E's self interests..." It also says the effort "calls into question" the company's integrity.

The senators are not alone in their condemnation. The Los Angeles Times, Sacramento Bee and New York Times are just some of the news outlets that have had stories and editorials criticizing the PG&E ballot measure.

Because of the measure, it's now advantageous for Marin Clean Energy (and any other community choice program) "to launch in time to beat that June ballot," says Marin Supervisor Charles McGlashan, chairman of the Marin Energy Authority, the joint powers agency that administers Marin Clean Energy.

The energy initiative needs a $1.7 million loan to cover expenses until ratepayer money starts flowing. River City Bank, a community bank based in the Sacramento area, will lend the money if Marin Clean Energy can get the loan cosigned. The energy agency has made proposals to the county and the Marin Municipal Water District. Contrary to some reports, the agency has not asked the county or the water district for direct loans. It has asked the county and the water district to secure a loan by cosigning for it.

Some community choice plan critics say it's unwise to risk public money by cosigning the loan. But, says McGlashan, it's really a low-risk venture that could yield a handsome return for the county and the water district. In a best-case scenario the county and the water district would split the risk and each cosign for $850,000. In exchange, Marin Clean Energy would give the two bodies a break on electricity rates in the neighborhood of $70,000 a year. That amounts to a return of about 8 percent a year in exchange for assuming the risk.

The benefits to Marin cities--and especially to the county and the water district--multiply when the requirements of complying with AB 32 get thrown into the mix. The Global Warming Solutions Act, enacted by the state in 2006, requires reducing greenhouse gases to 1990 levels by 2020. Marin Clean Energy proponents say it can take Marin a long way toward that goal.

Marin Clean Energy will go to the board of supervisors Feb. 2 to see whether the county will cosign for all or part of the loan. If the vote goes against Marin Clean Energy, "the board is guaranteeing that it will face a general fund liability to comply with AB 32," says McGlashan.

"The air resources board has calculated that compliance with AB 32 in the next 10 years in unincorporated Marin, including all societal costs, is about $108 million. If you assume that half of that amount will be borne by the economy, half will be government liability. The tragic reality is that by voting no on cosigning a loan, the board would guarantee that we will have to step up and find the money for climate change. And I can't tell you how on Earth we would find that money."

If the county declines to cosign for the full amount or agrees to secure part of the loan, Marin Clean Energy will then approach the water district on Feb. 3. The next day, if the loan is secured, the Marin Clean Energy board could vote on a contract with Shell Energy North America. That timeline could alter, but Marin Clean Energy knows it's a race to June and the PG&E ballot measure. If the county and the water district decline, McGlashan says, there's a possibility that private citizens could step up to secure the loan in a joint effort. During the first year, the energy plan will need about $6.4 million in operating funds. Marin Clean Energy envisions getting another loan using ratepayer funds as security.

A core idea of community choice programs, which many people have a difficult time grasping, is that community choice creates a revenue stream with which a community can fund local power programs and climate-change initiatives, which in turn, can stimulate local economies. In addition, community choice ensures local control over power decisions.

In an often-repeated argument, community choice opponents say they favor sticking with PG&E because it can deliver while Marin Clean Energy is an unknown quantity. But they rarely cite the utility's monopoly hold on ratepayers. And critics rarely mention successful community choice programs in Massachusetts and Ohio. They also rarely mention the fact that one-quarter of all residents in California receive competitive electricity from municipal utilities.

Paul Fenn, founder of Local Power, a San Francisco-based company that provides consulting services for governments looking to start community choice programs, played a significant role in starting community choice in Massachusetts, where he was a staffer for the state Senate Energy Committee. Local Power worked with San Francisco to develop a community choice program, which now is considering bids from clean-energy providers.

"PG&E has said publicly that it will spend at least $30 million" to pass the ballot measure, says Fenn. "We have the big challenge on our side of raising at least a few million dollars." Local Power is working with other groups on ballot statements against the measure, which voters will see as Proposition 16, says Fenn, who adds that he expects PG&E to engage "in a huge media buy and cluster-bomb voters' mailboxes" using that $30 million.

As far as sticking with PG&E for security when it comes to rates, Fenn points out that this is the same utility that ratepayers have bailed out of financial trouble to the tune of billions of dollars, and the utility that now is asking for $4 billion in rate increases.

"Marin Clean Energy provides the basis to develop renewable sources and local power projects," he says. Investing in local power in what amounts to "a climate protection agency that's attempting to do something in the middle of a rapidly accelerating climate crisis" is a good investment.

"There's a kind of wake-up factor here," he adds. "It would be tragic if fiscal conservatism would blind us to the gun pointed at our head, if we would rather pick up the penny on the sidewalk and then get shot. Better to focus on the well-being of your grandchildren."

Fenn has a question: "Why would PG&E spend $30 million on a ballot measure? Both Marin and San Francisco through community choice have found that right out of the gate they can double the amount of green power delivered at the same price [as PG&E." That's a major threat to a company that has held customers in a monopoly grip, "a company that is essentially a [natural gas company."

Contact the writer at peter@pseidman.com.

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