‘Environmental Group’ Supports Utility Companies’ Bailout of Nuclear Power; Gets $70,000 from Utilities

When FTCR and other consumer organizations placed Proposition 9 on the November, 1998, ballot in California, the state’s three private utility companies — Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric — panicked.

Proposition 9‘s target was a bill, passed by the California Legislature in 1996, which forced residential and small business to pay a $28 billion tax to bail out the three utilities’ mistaken investments in nuclear and other environmentally destructive power plants. By rewriting the bail-out, Prop.9 would have lowered electricity rates by up to 37%. (Click here for more info on Prop.9 and utility rates.).

The utility companies, desperate to defeat Prop.9, knew they couldn’t argue their own case before the voters. So they paid a variety of organizations to front for them and called in favors from other groups they had supported lavishly (with ratepayer dollars) in the past.

A key focus of the utilities was the environmental movement, now composed of a vast spectrum of non-profit organizations. In addition to recognized and highly respected groups like the Sierra Club, which supported Prop. 9, other organizations formed in recent years are far more amenable to compromise and even collaboration with industrial polluters, among them the Natural Resources Defense Council (NRDC) and the Environmental Defense Fund (EDF). The latter two groups joined with utility executives to urge voters to defeat Prop.9.

But the dirtiest work of all was undertaken by a relatively unknown California environmental group known as the “Planning and Conservation League” (PCL) based in Sacramento, California.

PCL’s Board of Directors held a meeting in June, 1998, purporting to decide whether to support or oppose Prop. 9. But, apparently unbeknownst to its own board members, the organization’s director, Gerald Meral, had already made a deal with the utility companies.

The group received $30,000 from Edison, $30,000 from Pacific Gas & Electric, $10,000 from San Diego Gas & Electric, as well as $265,000 from Thermo Ecotek Corporation, a power company, according to state campaign reports.

The money was given between April 8 and April 27 to a campaign committee controlled by the Planning and Conservation League, called “Californians for Clean Air,” a political committee created and controlled by Meral’s group to promote a ballot initiative (Prop. 7) which would extend tax breaks to corporations which pollute the environment.

Thus, when its Board met with supporters and opponents of Prop.9 on June 28, at which proponents and opponents of Prop. 9 were asked to make a presentation for the nominal purpose of enabling the organization to determine its position on Prop. 9, the utility and power companies had already donated $335,000. That fact was not disclosed to the Prop. 9 proponents speaking at the meeting.

Several days after the board meeting, Meral signed the utilities’ official argument against Prop. 9, which appeared in the ballot materials sent to all California voters.

Later in the campaign, the “Planning and Conservation League,” sent a two page letter to hundreds of thousands of homes, urging people to vote against Prop. 9 and support Prop. 7.

This was not the first such treachery by the self-described “environmental group.” Consumer advocates noted that Meral and his organization had previously been scrutinized for practices such as including provisions in initiative measures on behalf of railroads and other corporate interest groups that make financial contributions to the group.

But this was the most egregious example of the organization working against the interests of the environment.

Investigation by state consumer organizations determined that utilities had given hundreds of millions of dollars to non-profit organizations in California between 1996 and 1998. Sadly, most of the recipients joined the utilities in opposing Prop. 9, even though the ballot measure would have protected the constituencies they purported to represent.