June 09, 2010


Since Hawai'i has no election until September, I'll gratuitously comment on two Propositions that narrowly failed in California, my home state.

The first, Proposition 16, was written by and for Pacific Gas & Electric, the natural gas and electric utility which serves 2/3 of the state, from Bakersfield north to near the Oregon border. It essentially said that no local government could start up a utility to compete with PG & E without a 2/3 majority vote by its constituents approving that startup. Huh. Seems harmless enough, right?

Have you seen how hard it is to get a budget bill through the California legislature, which has a 2/3 majority requirement? Or how hard it is to get a bill through the US Senate, which, because of the filibuster, needs a 60% majority?

PG & E, had it won (and it spent $46M on ads trying to influence the vote), would have had a virtual lock on the entire market for 2/3 of the state. Fortunately for ratepayers, it lost by 156,000 votes, 52.3% - 47.7%.

Proposition 17 wasn't quite as egregious, but still very friendly to auto insurance companies. It was sponsored by one, Mercury Insurance. It said that insurers could offer discounts to drivers who maintained continuous liability coverage. That too, sounds harmless.

Ah, but who would make up the companies' losses from those discounts? Why, drivers who let their insurance lapse for one reason or another within the previous five years.

Didn't own a car for a while and had no need of insurance? Congratulations, you'll get higher rates when you do buy that new Mini. Got deployed to Iraq or Afghanistan and left the car on blocks in your yard or your brother's garage? Higher rates for you too.

Despite Mercury Insurance's $16M lobbying campaign, Proposition 17 failed to pass by 120,000 votes, 51.7% - 48.3%.

Posted by Linkmeister at June 9, 2010 02:13 PM | TrackBack