CEC Contracting Scrutinized

The California Energy Commission’s extensive use of contractors over the years, and the associated overhead and uncertainty over controls on outside workers, were the subject of a February 19 Assembly Utilities and Commerce Committee hearing. “I want assurances that the energy commission is using its own staff and outside contractors to achieve the most bang for the taxpayer and ratepayer buck,” said committee chair Assemblymember Lloyd Levine (D-Van Nuys). He and other committee members are concerned about the number of contractors the Energy Commission uses and possible conflicts of interest with private workers that produce reports and analyses from which they and/or their firm could financially benefit. According to the committee chair, overhead on some contracts with the University of California runs as high as 50 percent of projects costs. Levine also complained about the use of millions of dollars to produce unread reports and ones of “questionable value.” “I know there are things we can work on with the Legislature to improve our process and output of processes,” said Energy Commission chair Jackie Pfannenstiel. The commission is said to produce 340 reports a year, including 18 major documents mandated by legislation. According to the commission executive director Melissa Jones, many of the reports document data, methodology, and results of renewable and other public interest research and development projects. “The reports are the only way to make the information transparent and publicly available,” she said. Pfannenstiel said that her staff alone could not meet the demands associated with mandated reports and public interest research. Consequently, she said, outside help is often sought for intermittent projects. In addition, the commission lacks some needed expertise within its own ranks, though she noted that it is trying “to beef up the staff.” Jones added that because of the aging workforce there is lots of turnover. “It is getting more difficult to recruit and retain high quality employees” because private firms offer better salaries. According to the committee, the commission spent a total of $104 million on contractors the last two fiscal years. “If there were more senior members on the state side of the table that would be much cheaper for us,” noted Assemblymember Mike Davis (D-Los Angeles). Davis and Levine urged the CEC to ask for more staff if needed to meet commission responsibilities. However, the same day, the governor announced a state hiring freeze. The commission practice of applying CEC e-mail addresses and phone numbers to outside contractors also raised the eyebrows of committee members. The commission is planning to discontinue that practice because many people presume those workers are CEC staff. “There is a way a bureaucratic agency evolves over time but at a certain time you need to see if there’s a better way to do things,” Levine said. He did not promote the committee staff’s recommendation that the commission contracting process and staffing resources be audited. However, Pfannenstiel informed him that an audit by the Department of Finance has been launched.

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CEC Contracting Scrutinized

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