SSJID’s General Manager Jeff Shields, has advised the SSJID Board of
Directors that a lawsuit filed by a coalition of local publicly-owned
utilities from throughout California may help to clarify the potential
impact of Proposition 16 on SSJID’s plan to provide electric service.

The lawsuit was filed in Sacramento County Superior Court on March 18,
2010 by the Sacramento Municipal Utility District, San Francisco Local
Agency Formation Commission, City and County of San Francisco, City of
Moreno Valley, City of Redding, California Municipal Utilities
Associations, San Joaquin Valley Power Authority, Modesto Irrigation
District and Merced Irrigation District and seeks to disqualify
Proposition 16 from the June ballot on the alleged grounds that it is
false and misleading and fails to accurately state its true nature and
purpose.

Proposition 16 is a Pacific Gas & Electric (PG&E) funded initiative on
the June ballot which would amend the state constitution to require
publicly-owned electric utilities and community choice aggregators to
hold an election and obtain approval by a two-thirds vote prior to
providing electric service in competition with PG&E.

The lawsuit states that, “The title of the initiative – “The Taxpayers
Right to Vote Act” – is false and misleading in that it misrepresents
that Proposition 16 is a measure to control taxes, borrowing, and public
spending, but the creation or expansion of Public Owned Utility’s and
Community Choice Aggregation’s do not constitute special taxes, nor do
they have anything to do with taxes, borrowing, or government spending,
and the petition concerns only a proposal to impose a two-thirds
majority vote requirement for the creation or expansion of Public Owned
Utility’s and Community Choice Aggregation.” The public agencies that
filed the action have asked the court to order Proposition 16 removed
from the ballot.

SSJID, while not a participant in the litigation, believes that the
complaint contains information that may help clarify the potential
impact of Proposition 16 on SSJID’s plan to provide electric service.

In late 2009, SSJID submitted an application to the San Joaquin Local
Agency Formation Commission (LAFCo) for authority to provide electric
service to the residents of Manteca, Ripon and Escalon. If SSJID’s
application is approved, it will cut retail electricity rates in its
service territory by 15 percent across the board.

The Board of Directors of SSJID has considered the impact of Proposition
16 on District operations and concluded that its passage would adversely
impact proposed District efforts to provide retail electric service.

Under current law, SSJID’s plan to provide electric service requires
approval by vote of its Board of Directors, which is comprised of
elected public officials, and must also be approved by vote of the San
Joaquin LAFCo, which is also comprised of elected public officials,
following receipt of a report from the California Public Utilities
Commission. In addition, should the District seek to annex additional
territory to serve any new customer outside SSJID’s existing service
territory, who prefers service from SSJID rather than PG&E, SSJID would
have to obtain the prior approval of voters before it could provide such
service.

Proposition 16 would impose an additional new requirement and prohibit
publicly owned utilities, including SSJID, from offering electric
service in competition with PG&E unless, in addition to all of the
approvals required under existing law, SSJID also obtains prior approval
from voters by two-thirds super-majority vote.

PG&E in contrast, is not required to obtain any comparable approvals
from elected public officials or voters prior to providing electric
service in a new territory or expanding its system to serve additional
new customers. And the requirements of Proposition 16 would not apply to
PG&E.

A copy of the complaint can be found at http://www.sfcityattorney.org/.

For more information go to www.ssjid.com
and www.savewithssjid.com.