Ratepayer Advocate Wants Say over Its Budget

By Published On: March 4, 2005

New life may be pumped into the long-neglected and demoralized Office of Ratepayer Advocates at the California Public Utilities Commission. Members from both sides of the aisle on the Senate Energy, Utilities and Communications Committee support the new ORA director’s push to give the office more independence and resources. Legislation also has been introduced that would help restore ORA’s former stature as an effective defender of ratepayers’ wallets. ORA is “a very enhanced version of an ombudsman,” and central to that role is independence, said committee chair Senator Martha Escutia (D-Whittier) during a March 1 hearing. She introduced a bill, SB 951, that would boost ORA’s clout. Dana Appling, ORA director, told the energy committee that the CPUC’s control over her office’s purse strings jeopardizes her ability to protect ratepayers. Being tied to a budget “you have nothing to say about” creates “a very difficult situation,” Appling said. Lack of spending authority over the ORA budget keeps her from being able to allocate resources for training, as well as hire consultants. Steve Larson, CPUC executive director, countered Appling’s appeal. He said that having ORA’s annual funding within his agency’s budget kept it from being eliminated by the Legislature. “We need a single budget process,” Larson asserted. He added that it allows for an easy flow of staff between the two entities, while noting that ORA has policy independence. “We have only been disadvantaged by that flexibility,” maintained Appling. ORA was created to counter utilities’ sway in regulatory politics. Utilities generally have had a steady source of ratepayer money to fund lobbyists and legal counsel that often take positions contrary to ratepayers’ interests. Funded by the state, with investor-owned utility ratepayer money, ORA is supposed to provide an independent voice that ensures utility customers are not outgunned by utility forces. ORA shares office space and data with the CPUC, but it is considered a separate entity. A few years ago, ORA started crumbling. Its former director, Regina Birdsell, was often unavailable, and morale plummeted (<i>Circuit</i>, July 9, 2004). Administrative law judges admitted privately that they wished they could make more pro-ratepayer decisions, but that ORA has been largely absent in developing records during legal hearings. Bob Kinosian, ORA policy analyst, explained that part of the reason for this has been a shortage of personnel. The flow of staff between the sister organizations was unidirectional-only toward the CPUC. That, combined with a loss of 113 positions, has seriously undermined the office, he said. The number of ORA employees dropped from 223 in 1994 to 120 today. Policy independence, according to Kinosian, means little without the necessary financial backing. There is insufficient staff to litigate and offer expert testimony to protect investor-owned utilities’ customers in a range of CPUC proceedings, he added. For example, the shortage of staff keeps ORA from participating in the interagency planning process for the Energy Action Plan and Integrated Energy Policy Report. Not only does the CPUC borrow ORA staff, but the office no longer has its own legal staff. “As a result, attorney time and availability is divided and the potential for conflicts of interest has increased,” Appling noted in a written response to the energy committee’s questions about ORA activities. Senator Dave Cox (R-Fair Oaks) pointed out that ORA was intended to be separate from the CPUC. Its director is appointed by the governor, confirmed by the Senate, and not subject to removal by the commission, he noted. Escutia’s SB 951, introduced at the end of last month, would loosen the CPUC’s grip on ORA’s budget. It would require the commission to cover ORA’s costs when it participates in commission proceedings and hearings. The measure, expected to be amended, will also likely address the matter of sharing legal staff and potential conflicts of interest arising from dual representation, which is a more complicated issue. Before language is inserted in the bill, the matter must be sorted out by the Legislature and the professional ethics committee.

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