Personalities Plugged In: Unfazed

By Published On: January 9, 2009

Dana Appling made no New Year’s resolutions. The Division of Ratepayer Advocates director renewed her previous commitments to continue to bolster the agency’s visibility and clout to better protect ratepayers in California. “We give voice to the utility customers,” she says. “Our mission is to make sure ratepayer money is not spent inefficiently, or used to just line shareholder pockets.” Although DRA’s protests have become more forceful during Appling’s tenure, the agency does not hold much sway over the commission. Appling is unfazed by the agency’s score. “We keep getting up,” she said. “It would be worse without us.” Part of what keeps her and her staff going is remembering to take pride in small victories. That includes the results from efforts begun shortly after her appointment to increase staff morale and strengthen its voice. When she arrived at the agency in mid-2004, the employees suffered serious morale problems. The department’s voice was muted by diminished resources and lack of independence. “We were called TURN II,” Appling said, noting how the agency played second fiddle to the independent consumer advocate The Utility Reform Network. The state ratepayer advocate director prior to Appling’s appointment was seldom seen, the number of staff plummeted, and the agency had no budgetary independence. Appling successfully pushed legislation to prohibit regulators from raiding DRA staff. During her first year on the job in 2004, she also successfully got legislation passed that gave the division a budget that was separate from the California Public Utilities Commission’s. In addition, she was able to get legislative approval to have her own chief counsel, and not one that had to serve two masters. Previously, the division’s top lawyer also reported to the more powerful CPUC president. The commission decides the parameters of the utilities’ world when it casts votes, and its president sets the CPUC agenda. The DRA, in contrast, strives to influence policy but has no voting power. Although unfazed, the state consumer advocate is still the underdog. “They have got to hear us,” Appling maintained. Recently, DRA vigorously objected to the CPUC’s lowering the bar on investor-owed utilities’ energy efficiency incentive awards. Regulators’ 4-1 vote approved a non-refundable payment of $82 million for unverified energy savings. The agency also unsuccessfully opposed the decision approving San Diego Gas & Electric’s $2 billion Sunrise Powerlink transmission project. The votes, with commissioner Dian Grueneich the sole dissenter, were cast at the CPUC’s last 2008 meeting (Circuit, Dec. 19, 2008). Regulators speak at times with forked tongues, according to Appling. While professing support for ratepayer protections, they turn around and vote against their ratepayers interests. “I am not interested in the speeches. I am interested in the vote,” she stated. Another key concern for Appling is the lack of transparency in energy deals approved by the commission--an interest shared by both independent generators and the media. Transparency is the soul of a true competitive market, she says. Competition in her book involves “everyone being informed of everything.” She also worries about a lack of checks and balances on costly infrastructure projects and the push to create a carbon cap-and-trade market. Regulators support for tens of billions of dollars in utility capital expenditures for smart meters, new transmission, renewable projects, efficiency measures, and other infrastructure improvements, is taking a toll on ratepayers, Appling maintains. The investments increase utilities’ rate base and provide double-digit rates of returns to shareholders. Ratepayers foot the bill and questions linger over how the costs stack up against ratepayer benefits. For example, gas and water utilities are pursuing cost recovery for installations of advanced meters for gas and water supplies and services. Appling said that much of any savings attributed to gas and water meters largely will be limited to utility operational savings by eliminating gas and water meter readers. The DRA head is not against developing a carbon trading scheme, but she takes issue with the lack of a comparative analysis by the commission and Air Resources Board. The CPUC recommended that the Air Board develop a carbon market to help reach the state’s emissions reduction mandate under AB 32, California’s climate protection law. That law requires emissions be cut 30 percent by 2020. Much of the cuts--40 percent or more--are expected to come from the electricity sector. Appling said there must be an objective verification of the “need for a market and justification of its cost”--particularly given the national and global failure of the so called “free market.” If a market scheme is launched, she urges regulators to keep their hands in it to keep gaming at bay and thwart market failures. California is developing a region-wide carbon market with seven western states and four Canadian provinces under the auspices of the Western Climate Initiative Appling’s strategic plan also involved improving the work product of her agency to replace conclusory pleadings with higher quality and more in depth arguments. DRA staff also began showing up on the commissioners’ fifth floor offices to advocate for consumer protections. They were seldom seen in the commission offices earlier. Appling has been at the helm of DRA for four-and-a-half years. She was appointed to the post by Governor Arnold Schwarzenegger and does not have a set term. If her advocacy displeases the governor, he can fire her at will. However, she said the governor’s office “pretty much leaves me alone.” She wants to see more conservation and demand response to help stem the tide of climate change and increased energy use. However, she is not a fan of mandatory rules that would charge people more for energy used during times of high use. The key, she said, is massive consumer education to help ensure that everyone is informed.

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