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PG&E asks "Half a Billion?"

R.W. Beck found that PG&E's poles and wires are worth from $65 million to $108 million (under $1,500 per customer) rather than the ridiculous PG&E figure of $500 million, which PG&E reps were unable to support under cross-examination by our City Council.

Here's the Ad, below are the answers.     This Full Page Ad ran in The Davis Enterprise  on March 31, 2005, P. A-3.      The cost of printing a full-page political ads in the Enterprise is just over $2600. The text of the Ad is as follows: Half a Billion? Go ahead, ask them. for that much money you deserve a great answer. Electricity Consumers of Davis: The next time you see Ruth Asmundson or any of your City Councilmembers, ask them a few questions about their plans for spending your share of over $500,000,000* to switch electricity service.    Question #1. Why did the City Council vote to switch your electricity service from PG&E to SMUD - without first asking if you wanted to switch?    Question #2. How will Davis electricity consumers help pay for half a billion dollars in anticipated SMUD annexation costs?    In tiny letters at the bottom it states that the $500,000,000.00 figure is:   "* Economic analysis performed to determine the cost of the complete takeover of the PG&E electric system in Yolo County area being annexed."    In even smaller letters at the very bottom of the page:  "Paid for by Pacific Gas and Electric Company"

Responses:

Pete McGowan said:

"This PG&E political attack ad is bullshit"

Ted Puntillo wrote:

The City Council voted to give our citizens the option of making their
own decision on whether they want to switch to SMUD. It would be
negligent of us to not give our citizens that choice. 

I am skeptical of the price PG&E puts on their equipment and assets. 
SMUD would not enter into such an agreement if they thought PG&E was
correct in their estimate of their own worth. We still have several
more analysis to go through, including SMUD, LAFCO and finally the vote
of our community.

Dan Berman wrote:

March 31, 2005

TO: Letters, Davis Enterprise

SMUD: WHAT'S NOT TO LIKE? Response to PG&E full-page ad, March 31 2005

PG&E's full-page ad in the Enterprise on March 31 should have been printed on April Fool's Day. PG&E is fully aware that the residents of Davis, Woodland, and West Sacramento will get to vote on annexation before it happens. Our City Council members know that PG&E has refused---despite its pious promises--to cooperate with R.W. Beck's SMUD Annexation Study. They know that R.W. Beck found that PG&E's poles and wires are worth from $65 million to $108 million (under $1,500 per customer) rather than the ridiculous PG&E figure of $500 million, which PG&E reps were unable to support under cross-examination by our City Council. 

We should thank the Davis Enterprise and particularly Beth Curda for her thoughtful coverage of the annexation issue. We should praise Mayor Ruth Admundson and Councilmembers Sue Greenwald, Ted Puntillo, Don Saylor and Stephen Souza for their 5-0 votes to move the annexation process forward. Their questions at city council meetings have been thoughtful and courageous. Ted Puntillo asked a PG&E rep point-blank how much profit it made in Yolo County. The PG&E rep said he didn't know, but that PG&E Co. was guaranteed an 11% annual profit by the California Public Utilities Commission. "So that's where the money we save will come from, right?" asked Ted. 

The Davis City Council, like the City Councils of Woodland and West Sacramento, voted unanimously to request that SMUD move forward because they want lower rates, reliable service, green electricity, and democratic governance. The Annexation study predicts that electric rates in Yolo County will fall to 8% LESS than PG&E rates even as we pay for PG&E's poles and wires. We know that a residential customer who used 500 kilowatt-hours this January paid $63 in Yolo County; the same amount of electricity in SMUD territory cost only $42. 

PG&E has become an engine to generate outrageous pay for its top execs. From 1998 to 2003 the total pay of Mr. Robert D. Glynn, Jr., the President and CEO of PG&E Corporation, skyrocketed from $2.1 million to $34.0 million; over the same period the total pay of Mr. Gordon R. Smith, VP of PG&E Corp. and CEO and President of PG&E Co. (a wholly-owned subsidiary of PG&E Corp) jumped from $1.0 million to $20.3 million. These are the men who led PG&E into energy restructuring and then into bankruptcy in 2001. Mr. Glynn's compensation that year included $17.0 million in "phantom stock units" and Mr. Smith's included $9.9 million in "phantom stock units." Don't take my word for it: check it out yourself at http://www.pgecorp.com/investors/pdfs/2004ProxyStatement.pdf...(pp. 39-41)!! Somehow PG&E forgets to mention these facts in their full-age ads and countless TV spots. 

That same year Ms. Jan Schori, General Manager of SMUD, earned a grand total of $283,327. I imagine her elected Board would have fired her if she had led SMUD into bankruptcy.