JUICE: Commission Eyes Wide Shut

9 Jul 2015

For six months, California Public Utilities Commissioners have promised profusely to make transparency and public accessibility a top priority in the wake of revelations of backroom dealings that both rocked the agency and prompted legal probes and reform bills.

“We have to build a fair, open, accessible, effective, and nimble organization. It has to start at the top,” commission President Michael Picker said shortly after replacing two-term President Mike Peevey at the beginning of this year. Peevey did not seek a third term after a pattern of improper meetings and communications revealed favoritism toward utilities. The other four commissioners heartily concurred with the new agency president on the need to make openness a priority.

However, last week the commissioners effectively broke their promise.

On a national holiday, energy regulators July 3 shamelessly approved a major reform of electricity rates that increases what most Californians pay for power.

On top of that, the commissioners met in a room that lacked the usual video webcast capability, due to construction, Picker said. It made it difficult to identify who was speaking for those tuning in via a sometimes scratchy audio stream.

They voted on a compromise proposal hammered out in closed-door meetings (see story on page 2). The revised deal was released less than two days before last week’s vote—giving public interest advocates and utility competitors virtually no time to weigh in, much less digest the massive decision. The compromise came after two competing rate reform proposals failed to win support at numerous regularly-scheduled biweekly business meetings.

Why the sudden hurry?

No mention was made of the need to decide the matter quickly each time the agenda item was held, though commissioners heard a lot of criticism about the initial rate reform proposal by Picker, a variant of which was approved. Consumer advocates and clean energy supporters objected to its expected rate increase for an estimated 90 percent of households and removal of a pricing incentive to help meet the state’s commitment to cut greenhouse gases through energy efficiency and installing solar rooftops. Those goals have been financed by billions of dollars of ratepayer money.

The compromise approved at the start of the July 4th weekend made a mockery of the commission’s reform pledges, particularly in the areas of transparency and public accessibility.

It’s time to turn the commission around—with a new president in place, new legislation and a surge of technologies enabling customers to better manage their energy use. Yet, we see even more worrisome signs, aside from last week’s vote, that business will continue as usual.

Earlier last week, the three investor-owned utilities filed with the commission their plans to overhaul their business models to help solidify their role in running the distribution system.

Massive so-called “distribution resource plans” filed by Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric aim to enable them to remain in the driver’s seat as the level of distributed solar and other alternative energy resources grows. The plans outline how the utilities plan to tap ratepayers for untold billions of dollars and earn a handy return on investment on use of the money.

Hardly a mention was made of these plans, or others involving billions of dollars of additional costs at ratepayer expense, before, during or after the commissioners approved revising the rate structure—though they noted rates will go up for most under the reform decision alone.

Edison was the only utility to note expected costs of its distribution resource plan—estimated at up to almost $3.2 billion by 2020, with additional spending stretching for another five to 10 years. Expenditures to carry out the distribution resource plans at the other two major electric utilities are likely to be comparable (see related article below).

Without real, immediate and lasting change at the commission, Californians and legislators will be left in the dark as to the plans’ cost, and as importantly, why they are even necessary.

Funding for carrying them out will be handled in numerous dockets, many of which won’t be decided until the plans are approved. These dockets range from general rate cases to rules about the cost and terms of interconnecting distributed resources to the grid and a separate docket expected to change the terms of net metering for rooftop solar systems.

The commission’s continuing myopic view of individual dockets and failure to bring the public in to look at the big picture spells bad news for California businesses and households.

And not surprisingly, both business and residential customers are racing to minimize their relationship with top-heavy utilities propped up by their regulated monopoly status as solar panels, fuel cells, battery storage, and super energy efficiency measures and automated energy usage controls become more affordable and available.

It’s time to tally the customer dollars at stake in ongoing proceedings and open a rigorous and noisy public debate about whether to narrow the role of monopoly utilities in California, rather than continue to have a few unelected officials make all the decisions in arcane and disparate proceedings.

It’s got to start at the top. If not, California’s energy future will continue to be decided in backroom deals that favor utility monopolies at the expense of ratepayers.

—William J. Kelly & Elizabeth McCarthy

 

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