Editor’s Note: This is Part 2 of two. Part 1 is here. 

Nov. 27, 2012

By Katy Grimes

PG&E has openly misled about rate increases. In February 2011, PG&E announced the utility expected its electric rate to remain steady into 2011. Then it was revealed that PG&E’s 2011-2013 General Rate Case would bring more rate increases.

As I wrote in February, “The game was clever: While decreasing the rates by 0.8 percent on January 1, 2011, and increasing rates again by 1.5 percent on March 1, the net result was an increase of 0.7 percent. PG&E got its rate increase.”

Every three years, General Rate Cases provide the California Public Utilities Commission a chance to perform an exhaustive review of utility company revenues, expenses, and investments into utility infrastructure.

And every three years, PG&E requests rate increases, and the CPUC approves them.

Remember that PG&E charged its customers $5 million to fix a gas pipeline under San Bruno, Calif. in 2009, but delayed the work, citing other priorities. The company then spent $5 million on executive bonuses. The subsequent 2010 San Bruno gas pipeline explosion killed eight, injured more than 100 and destroyed 38 homes.

High rates

PG&E’s rates are already among the highest in the United States and are higher than almost all municipal providers. In General Rate Cases, PG&E has repeatedly double-dipped, and tried to charge customers millions in deferred maintenance, on which repairs may or may not be done.

The CPUC has failed miserably at any oversight of the utility giant, as well as at the enforcement of necessary maintenance to gas lines.

According to the Independent Review Panel report following the deadly San Bruno gas pipeline explosion, PG&E management had focused primarily on compensation and investments, instead of leading pipeline safety and integrity in the industry, despite warnings.

The damning report also identified several factors contributing to a dysfunctional culture at PG&E: excessive levels of management, lack of expertise within management, appearance-led strategy setting, insularity and overemphasis on financial performance.

It would appear to anyone that the CPUC has allowed PG&E to operate with little accountability, and perhaps only cursory oversight. State government has not applied its own laws, rules and regulations evenly, and appears to have allowed the largest utilities to get away with gross negligence.

Whose charity?

PG&E not only pays counties hefty property taxes. The utility also makes charitable contributions to local food banks, chambers of commerce, health programs, and “underserved communities.”

In 2011, PG&E made more than $23 million in charitable contributions. According to PG&E, “More than 75 percent of PG&E’s community investments provided assistance to underserved communities in 2010. This funding supported projects and organizations assisting people with low incomes, communities of color, women, veterans, senior citizens, people with disabilities, and members of the lesbian, gay, bisexual and transgender community.”

“[PG&E] officers sit on the boards of a diverse group of nonprofits, such as California State Parks Foundation, United Negro College Fund and Leadership California.”

Also, “We worked with the Association of Bay Area Governments, Association of Monterey Bay Area Governments, Great Valley Center and Sierra Business Council to help compile greenhouse gas inventories for more than 60 local governments. These are expected to be completed in 2011 and we plan to get started on roughly 60 more.”

The counties become news when agencies spoke out in favor of PG&E’s corporate interests. But ratepayers shouldn’t have to fund any of PG&E’s charitable or political spending. Ratepayers can choose to make such contributions on their own.

Ratepayers pay

PG&E has argued that the shareholders pay for these expenditures. But all of PG&E’s revenues first come from ratepayers. Shareholders make their money off of the ratepayers.

The CPUC looked at PG&E’s last rate hike request and apparently had a difficult time with the justification, according to one utility expert who asked to remain anonymous. He said the dividends paid to shareholders should be closer to 5 to 7 percent, as for most utilities, not more than 11 percent.

“Going back five years, PG&E never reduced the dividends, even as rates were increased,” said the utility expert.

The CPUC has historically allowed utility companies continually to increase rates, resulting in California becoming the most expensive state in the entire country for utility rates.

By Dave Roberts

“The Mouse that Roared,” a 1950s satirical novel and movie about a tiny European country that declares war on the United States, has come to life in the Bay Area. Corte Madera, a town of 9,200 people tucked away in the Marin countryside, has rebelled against the Association of Bay Area Governments over California’s housing mandates.

Corte Madera’s three square miles of land is pretty much built out with nearly 3,800 households, two schools (with a third on the way), two shopping malls and a town park that hosts the annual Fourth of July festivities. The small town is known as “the hidden jewel of Marin” — and that’s the way the residents want to keep it.

They feel like they’ve done their part to meet the state’s affordable housing mandates. They won national awards for a 79-unit affordable development built in 2008. And they recently rezoned an industrial site, in the process losing jobs and tax revenue, to accommodate a 180-unit development. The projects allowed the community to meet its state-mandated Regional Housing Needs Allocation requirement of 244 additional units.

But residents weren’t happy about it.

“It’s a lot of [new] housing in a community of 9,200 people,” said Mayor Bob Ravasio in a recent KSFO radio interview. “As we were going through the final process on this, a lot of people in town made it very, very clear that they were extremely upset. Rightfully so. We are 9,200 people; we are three square miles; we are built out. And we are rezoning an industrial site in order to get the housing built.”

But while there was a lot of anger and grumbling, it’s what happened next that led to rebellion.

“We got information … that they wanted us to add another 700 units and 49 percent more jobs by 2040,” said Ravasio. “And we all hit the roof.”

The Corte Madera Town Council studied the consequences of withdrawing in protest from ABAG, which oversees the housing mandate for nine counties and 101 towns and cities. They learned that it would prevent them from applying for government grants administered through ABAG. But that would not be a big loss.

“We went back the last 10 years and saw one government grant we received for about $60,000 for a bicycle path improvement,” said Ravasio.

“We had to spend a fortune on consultants to comply with the conditions of the grant.”

Downside

The other downside to withdrawing from ABAG, he said, “is you lose a seat at the table when you’re discussing things like the Regional Housing Needs Allocation. We went back through history, and we found that we really hadn’t been listened to in the past and didn’t have a seat at the table anyway.”

So, with little to lose, on March 6 the town council voted 4-1 to pull out of ABAG. The town will save $2,350 in annual dues, but it will still be required to abide by state housing mandates controlled by ABAG. As a result, their action may prove to be little more than sticking their heads out the window and shouting, “I’m as mad as hell, and I’m not going to take this anymore!”

Those who spoke at the council meeting strongly backed that message, with many chanting the mantra of “local control.” One man expressed disdain over what he viewed as capitalism and socialism descending into fascism by ABAG. A woman referred to attendees as “fellow abolitionists.” Many were from surrounding communities who said they hope their towns join Corte Madera’s rebellion.

Other mayors have asked Ravasio to speak to their councils. He intends to do so after his council prepares a report next month on the logistics of forming an ABAG-type organization for Marin communities, similar to the Mendocino Council of Governments.

“You need to have something like this in order to be able to deal with the state and get control of your own Regional Housing Needs Allocation requirements,” he said.

In what may be a case of the squeaky wheel getting the grease, Corte Madera’s housing requirement was recently reduced to 270 additional units by 2040 — the largest decrease among Marin towns. Two others, Novato and Larkspur, also had their requirements significantly reduced, while most other towns saw big increases — some like Sausalito and Ross more than doubled.

This resulted in grumbling from those who got stuck with the increased housing in the latest growth plan.

“What apparently happened was radical shifting of the housing and jobs from those that complained to those that didn’t (some of whom as a result are now ready to complain), regardless of the sophisticated modeling methodologies employed,” observed the Marin County Council of Mayors and Council Members. “Is this plan really a genuine effort to recommend the most rational plan, or just an effort to disperse the discontent as evenly as possible?”

New numbers

ABAG responded that the earlier numbers were based on unrealistic estimates, and the revised numbers are based upon “comprehensive forecasting methodology.” It takes into account such factors as the town’s proximity to employment corridors and transit, real estate market conditions and development potential. “Political considerations regarding ‘discontent’ were not used as a long term factor” ABAG’s response states.

ABAG Senior Communications Officer Kathleen Cha acknowledged in an interview that “there definitely are those frustrations relating to the housing numbers, and we understand that. In the end, all of this is a plan and it’s a vision for what can happen. In the end it has to come back to the local government. How that zoning changes or how they come up with it rests back on them. It’s not like everybody has to have this kind of density. It’s ‘look, these are what the needs are — how can you meet them in your community and where could it be?’ That will have to be determined by the local jurisdiction. It’s not dictated by ABAG.”

But a lot of cities are feeling like they’re being dictated to. Last month, Palo Alto sent a 20-page complaint letter to ABAG, arguing that the jobs and housing requirements are unrealistic, not accounting for market constraints, high costs and the impacts of intensive development. City officials also believe that the plan will have a negligible impact on greenhouse gas emissions in any case.

It’s those emissions that are the driving force behind the discontent. ABAG and the Metropolitan Transportation Commission are implementing the One Bay Area Plan, which is designed to reduce carbon dioxide emissions by 7 percent by 2020 and by 15 percent by 2035. It’s authorized by SB 375, the Sustainable Communities and Climate Protection Act of 2008, and AB 32, the Global Warming Solutions Act of 2006.

The goal is to supposedly save the planet. But many local officials and residents fear it’s actually a case of politicians and bureaucrats destroying their villages in order to save them.

“For us this is about local control,” said Ravasio. “We are a small town. We want to remain a small town, which is why people moved here in the first place. We should be allowed to do that and control growth and grow in a way that makes sense for us. And not have it mandated to us by the state or a regional authority like ABAG. Which is what’s been happening, Which is why we took this step.”

It remains to be seen whether the roar from this mouse echoes throughout the Bay Area and eventually the rest of the state. If it does, it could be the first rebel yell in a new Civil War. Or perhaps it should be called the War of Sacramento Aggression.

By DAVE ROBERTS

Like a giant octopus grabbing helpless humans in a horror movie, a new bureaucracy is squeezing the Bay Area.

One Bay Area is a plan to push Bay Area residents out of their cars and jam them into pack-and-stack high rises in the coming decades. The goal: cut greenhouse gas emissions and supposedly help save the planet from global warming.

One Bay Area is mandated by SB 375, the Sustainable Communities and Climate Protection Act of 2008. It was passed by the Democratic-controlled Legislature and signed into law by then-Gov. Arnold Schwarzenegger, a Republican. SB 375 is not as well known as AB 32, the Global Warming Solutions Act of 2006. But SB 375 well could affect Californians’ lives more directly.

One Bay Area is supported by the Bay Area’s liberal politicians, planning bureaucrats, environmentalists, social justice advocates and other elites. The plan is scheduled to be approved by the Association of Bay Area Governments and the Metropolitan Transportation Commission in spring 2013.

Fighting Back

In the meantime, a few folks, many affiliated with the Tea Party, are putting up a fight, despite the long odds. A number of them raised objections last year at the first round of public input meetings in the nine Bay Area counties. And they did so again this month in the second round’s first meeting in San Francisco.

An additional 2 million people are expected to live in the Bay Area by 2040, bringing the current population of 7.1 million to more than 9 million. This will result in a need for an additional 770,000 to 1 million apartments, condos and houses. That’s a jump from the current 2.6 million units. And, theoretically, an additional 1 million-1.4 million jobs will be created to provide employment for them. That’s up from the current 3.2 million jobs.

One Bay Area is designed to accommodate that growth while meeting the SB 375 goal of reducing carbon dioxide, particularly from cars and light trucks, by 7 percent by 2020 and 15 percent by 2035. The five planning scenarios actually fall short of that goal. So more social engineering will be coming, in addition to One Bay Area’s realignment of land use policies.

The plan attempts to thwart individualistic human nature in the name of communitarian progress. Basically, people who live in the suburbs and drive to work are bad. Those who live in apartment/condo buildings above shops in mass transit-oriented villages where everyone walks, bikes and rides buses and BART are good.

Blowback

Sensitive to the blowback from suburbanites who cling to their McMansions and SUVs, Lou Hexter, the moderator at the San Francisco meeting, was careful to emphasize that the plan “will not prescribe what a property owner must do and will not change the authority of local jurisdictions to make decisions.”

But money is power. The Metropolitan Transportation Commission has the ability to determine where to spend the $256 billion that is slated for transportation improvements in the Bay Area in the next 25 years. If the Bay Area’s nine counties and 101 cities toe the transit-oriented infill development line, they are more likely to get a piece of that funding. If they allow more suburban growth, particularly into farms, orchards and open space, they could lose out.

In any case, those who prefer to drive where they want to go, rather than taking a bus to BART and then another bus to their destination, are likely to suffer in the coming decades. Despite an approximate 30 percent increase in population, under current plans roadway capacity is planned to increase by only about 7 percent between 2005 and 2035. The One Bay Area plan likely will not affect that much.

Double-Nickle Speed Limit

On the other hand, mass transit capacity is currently planned to increase by about 22 percent from 2005 to 2035. One Bay Area’s initial vision scenario would increase that to 55 percent.

The idea seems to be to make traffic congestion in the Bay Area, which is already among the worst in the nation, so horrible that tens of thousands of people, perhaps hundreds of thousands, will voluntarily leave their cars at home and instead crowd onto buses, trains and ferries. And if they don’t get sufficiently discouraged from the daily freeway bump-and-grind, the One Bay Area options include increasing parking fees and setting the freeway speed limit at 55 mph (on the rare occasions that such speeds would be possible).

In essence, One Bay Area is the San Franciscation of the Bay Area. So it was appropriate that two San Francisco supervisors who also sit on the Metropolitian Transportation Commission provided the opening remarks. They were David Campos (a leader on the board in sponsoring anti-business legislation) and Scott Wiener (who elicited national snickers by requiring nude San Franciscans to place a cloth underneath them before they sit down in public)

“We have to identify what our priorities are to make sure we have effective use of the limited resources, and equitable outcomes so we have a Bay Area that works for everyone,” said Campos.

“We can’t just bury our heads in the sand and pretend we won’t have more people here and don’t need more housing and transit infrastructure,” said Wiener, who touted San Francisco as leading the way in transit-friendly housing. He also put in a plug for High-Speed Rail, “despite the Republican and media feeding frenzy against it.”

Limited Info

The intent of the meeting was to inform the public — or at least the 100 or so people allowed in to each of the nine meetings — about the plan and gain their feedback. But the information provided was limited, general and vague. And public input was mostly circumscribed to fit the pro-urban bias of the plan. Participants were broken into three groups, who then rotated among three rooms that focused on either transportation trade-offs, quality of complete communities or the Bay Area in 2040.

Any doubt on whether the fix was in to turn motorists into an endangered species was dispelled in the transportation room. Participants were asked to select their five most important transportation investments out of nine options — none of which included building more roads. Most of the options focused on mass transit and pedestrian and bicycle paths. Participants were also asked to select “the five most appropriate policies to reduce auto emissions.” The final question asked whether they supported finding ways to improve public transit.

Blood, Sweat and Tears

The presentation on the quality of complete communities was, naturally, skewed in favor of transit-oriented villages on infill land. San Francisco was touted as a model of urban planning by Ken Kirkey, director of planning for the Association of Bay Area Governments. He said, “No place in the region has done more than San Francisco. There’s been a lot of hard work and pain and blood, sweat and tears in the city.”

Not everyone at the meeting welcomed the prospect of sharing or spreading San Francisco’s pain, blood, sweat and tears.

“There are lots of assumptions about complete communities,” said one man. “I hear they will work because we get neighborhood services so people can walk and won’t have to have a car. In my time in San Francisco, the local supermarkets have shut down, corner stores have gone away. People have to drive for services. Nowhere have I seen how those factors are addressed.”

Another man said, “This is one of the most superficial meetings I’ve been to in a long time. Things were skimmed over, videos were at a middle-school level. I’m shocked at the low level of discourse and ideas presented today. We were shortchanged by MTC and ABAG. Let people speak and listen to them.”

Criticism also came from a man who said, “I have a very hard time with this process. This notion of trying to urbanize and turn the Bay Area into Brooklyn seems like madness to me. Forcing people into four-story walk ups. Those are the places people fled from. These are not homes, folks.”

Frankenstein

One woman warned that One Bay Area could be a Frankenstein’s monster or Pandora’s box. “Whenever you plan and build for two million people, four million people will come,” she said. “Growth has some of its own natural limitations. What you’re doing removes those natural limitations. You are altering things, and there will be many unintended consequences. The densification theories you apply, apply to Europe. They do not apply to the West Coast.”

Despite the fact that nearly three-fourths of the participants live in San Francisco, they were split evenly on whether they support the One Bay Area plan. The tally was 43 percent in favor and 43 percent opposed, according to the electronic polling at the end of the meeting.

They also were asked whether they agreed or disagreed with the statement, “Changes will be needed in my community and lifestyle to improve the quality of life in the future.” On that question, 47 percent strongly disagreed, which was the top choice. Asked whether the meeting presented the right level of detail on the One Bay Area plan, 62 percent strongly disagreed.

Ironically, for a process touting the virtues of mass transit, at the beginning of the meeting the moderator announced that the shuttle to the BART station would stop running in 20 minutes. “If you need a ride, see us,” said Hexter. “We want to make sure you don’t have to sleep in the auditorium.”

Similar meetings have been scheduled in the coming weeks in the other Bay Area counties:

Regional Advisory Working Group
Tuesday, February 7, 2012
9:30 a.m.

Housing Methodology Committee
Thursday, February 23, 2012
10:00 a.m.
The Housing Methodology Committee meets on the fourth Thursdays of the month at 10:00 a.m.