PG's propaganda war, part III

PG&E's propaganda war, part III | October 17, 2001 | SFBG News
 		 		 		 		
A $3 billion bill? Don't believe the hype                                               

By Rachel Brahinsky
 						
San Francisco mailboxes were flooded this week with campaign mail 
promising that Measure I, the municipal utility district ballot 
initiative, will "stick" San Franciscans with a "$3 billion 
bill."
 						
Funded by SBC Pacific Bell and AT, the mailer is the latest in a 
growing onslaught of corporate propaganda against the MUD and its 
companion public power measure, Proposition F. The forces against 
public power, led by Pacific Gas and Electric Co., are cranking 
up their campaign – and cranking out the lies.
 						
Lie no. 1: A MUD would impose a $3 billion bill on taxpayers.
 						
The television ads, flyers, and well-designed mailers clearly aim 
to confuse voters about the initiatives. The mailer cultivates 
fear, implying that a vote for the MUD is a vote in favor of a $3 
billion tax. On an opposition Web site (www.no3billionbill.com 
[http://www.no3billionbill.com] ), MUD opponents explain that $3 
billion is the total that it might cost for a MUD to take over 
every possible utility, from cable to garbage to telephone 
service, along with the electricity system.
 						
But MUD supporters say they have no plans to municipalize those 
other services. They're focusing on energy.
 						
"The consultants hired by PG realize there's money to be made by 
cultivating new clients such as AT, Pac Bell, and Norcal [Waste 
systems] into believing their assets are being threatened," Ross 
Mirkarimi, director for the solar and public power campaigns, 
told the Bay Guardian. "Those corporations have been hoodwinked."
 						
Aside from ignoring the real goals of MUD proponents, the $3 
billion argument has several problems. Let's assume the MUD is 
formed and the five elected directors decide to take over all 
four businesses. And let's assume that the $3 billion price tag 
is accurate. The MUD needs to raise the money, which it would 
typically do by selling bonds.
 						
Jerry Jordan, director of the California Municipal Utilities 
Association, told us San Francisco's new utility would almost 
certainly go with revenue bonds, which are paid off by the 
revenues generated from selling power and other services. "Nobody 
would even think about financing utility activities with anything 
other than revenue bonds and probably wouldn't get anybody to 
underwrite it [any other way]," he told us.
 						
To sell those bonds, the MUD would need support from Wall Street. 
That would take a sound study showing how the utility can make 
enough money to pay off its debt, Peter Camejo, chair of 
Progressive Assets Management, told us.
 						
Jordan agreed: "The underwriters are not about to sell bonds, and 
the bond council is not about to give an opinion if they don't 
have a firm financial plan for how they will make money."
 						
"There has to be a certain viability," city treasurer Susan Leal 
said. "To have revenue bonds, you've got to have revenue."
 						
If the MUD were authorized to sell $3 billion worth of bonds, 
taxpayers wouldn't pay a dime. The money would probably be repaid 
by the MUD over 30 years at low interest rates. The cost would be 
far lower than the revenue (see "Mud Money," 10/10/01).
 						
While there's no official study proving that a takeover of PG or 
any other utility would stock the city coffers, Camejo told us 
that the frenzied opposition of the local utilities is a big 
clue: "The people who you would be buying it from oppose [the 
MUD]. That's a hint that these things are worth a lot of money."
 						
Lie no 2: The Sept. 11 terrorist attacks compel voters to oppose 
the MUD
 						
PG and its allies began rolling out television ads in the past 
few weeks. All are full of lies and misleading statements. One of 
the most egregious evokes the World Trade Center collapse – and 
uses that context to tell voters that the firefighters union in 
San Francisco opposes the MUD.
 						
"To prey on people's fears like that is fucking despicable," 
state senator John Burton said of the ads.
 						
It gets worse: Sup. Tom Ammiano reports that a member of the 
Police Officers Association told him the POA was under heavy 
pressure to oppose the MUD. Ammiano said a representative of 
political consulting firm Solem and Associates, which has long 
represented PG, threatened to actively fight any Police 
Department initiatives – such as raises for officers – in the 
future. The anti-MUD campaign is "in a cesspool," Ammiano said. 
"I guess it says that they think it might win."
 						
Calls to Don Solem and to the POA were not returned by press 
time.
 						
P.S. A source who attended a breakfast with Mayor Willie Brown 
Tuesday tells us that – in front of an estimated 1,000 attendees 
– the mayor announced that he's opposing nearly every proposition 
on the ballot: from Proposition B, all the way down to Measure I. 
The source told us that Brown cited the utilities propaganda 
against the public power measures, claiming that public power 
would cost, yes, $3 billion. Mayoral press secretary P.J. 
Johnston would not confirm that the mayor has taken an official 
position on any measure. For more of PG's lies, see "PG&E's 
Propaganda War, Part II 
[http://www.sfbg.com/News/35/32/32oglabo.html] ," 5/9/01. 
						
E-mail Rachel Brahinsky at rachel@sfbg.com [rachel@sfbg.com] .
 						
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