Letter From Our ED—June 2007

With millions of utility consumers and perhaps a dozen major investor-owned utilities in California, it should not be difficult to find CPUC Commissioners with expertise in consumer issues who do not have ties to the utilities.

Yet California’s five-member Commission is dominated by Schwarzenegger picks with little or no experience in protecting consumer interests, but a great deal of experience in banking and finance.

California has millions of residents who are consumers of utility services. There are perhaps a dozen major investor-owned utilities regulated by the California Public Utilities Commission (CPUC). So it should not be difficult to find Commissioners with expertise in consumer issues who do not have ties to the utilities.

Yet California’s five-member Commission is dominated by Schwarzenegger picks with little or no experience in protecting consumer interests, but a great deal of experience in banking and finance. The cellular industry has a seat at the table in the form of one of its former attorneys. And the energy industry has a former utility and energy service provider executive rolled into one. The line-up might be impressive were this a lobbying firm representing a stable of utility and other industry clients. But the CPUC is the agency charged under California’s constitution with protecting and promoting the interests of the state’s residents in keeping essential services reliable and affordable. You’d think the Governor would respect this charge and appoint commissioners who truly represent the public. You’d be wrong.

Not only has the Governor failed to guarantee the independence of the CPUC, the Legislature has failed as well. The state Senate plays what should be a critical role in the process,unless it confirms an appointee within a year, the appointment expires and the commissioner must leave his or her post. But the Senate has not rejected a candidate for the CPUC in TURN’s collective memory. Even candidates whose ties to the industry should have raised red flags have been confirmed, some unanimously. And as a result, the “check” that is such an important element of our system of checks and balances has been neutered.

In the past few months we’ve seen, not once but twice, what happens when there are no checks. The Senate Rules committee opened 2007 with hearings on the confirmation of Rachelle Chong, a former attorney for cellular companies. Ms. Chong had spent her first year on the CPUC dismantling every consumer protection she could get her hands on, an agenda that left cellular customers especially vulnerable to abusive practices. Despite her record and the objections of TURN and other consumer advocates, the Rules committee confirmed her appointment, although Senator Perata (D-Oakland) did say the committee would look for stronger consumer credentials in the next appointee.

Within a few weeks we learned that either the Governor has a very skewed view of “consumer credentials” or he does not think very highly of Senator Perata. His next appointee was Timothy Simon, whose background is in banking and investments, and whose most recent job was as the Governor’s appointments secretary. When asked about his credentials as a voice for consumers, he described himself as a “working stiff” raising kids with only a Commissioner’s salary,a mere $124,000 per year. It would be laughable were the stakes not so high.

Whatever one thought of the recall election that begat Governor Schwarzenegger, his promises of doing things differently in Sacramento and ending “politics as usual” sounded refreshing. But from TURN’s perspective just the opposite has happened. So the next time you hear someone complain about high utility rates, be sure and explain to them that the Governor and the state Senate have a great deal of responsibility in these matters. And support TURN in our efforts to demand that the Legislature provide some “balance” in the form of consumer protection legislation and limits on the CPUC’s authority to do more harm. You can find more information and sample letters on our website.

Sincerely,

Executive Director
Bob Finkelstein