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SMUD Says Prop 16 Would Block New Service

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(Sacramento, CA)
Friday, April 16, 2010
Proposition 16 would change the state constitution to require a two-thirds vote before local governments can use taxpayer funds to create or expand publicly owned utilities.
Arlen Orchard is the Sacramento Municipal Utility District’s general counsel. He told the utility’s Board of Directors Thursday it’s still unclear exactly how Prop 16 would impact SMUD. But it appears offering new service will require voter-approval first.
“So the question is – what about all the new customers and businesses that may be relocating and what about infill projects, things like a new arena? What does that mean for our ability to fulfill our obligation and duty to provide electricity to those customers?”
The main force behind the initiative is Pacific Gas and Electric Company. PG&E officials say taxpayers should have a larger say when local governments enter the power business.

Last month, SMUD and group of other public utilities filed a lawsuit challenging Prop 16 on grounds that the initiative is misleading. A hearing is set for May 5th.
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