CAVALA: P.G.& E. Rate Increase Flim-Flam

Posted on 26 October 2009

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towashington 089.gifBy Bill Cavala
A veteran of over 30 years in Sacramento

Pacific Gas and Electric is installing new “smart meters” in the homes of ratepayers, beginning in the Central Valley. They have created a whirlwind of protests because of dramatically higher bills. Anecdotal evidence collected by the Fresno BEE showed one ratepayer moving from $27 to $104 without a corresponding increase in power use.

Ratepayers have concluded the “smart meters” are faulty, objecting to their installation. But tests indicate that isn’t the case.

P.G.&E. argues that the increases in some bills is due to a 23% rate increase approved by the PUC.

But a spokesman for Texas Meter and Device, a company that has been testing meters for 70 years, attributed the dramatic increases in bills to the fact that the “old” meters were inaccurate – understating real use. (In some cases, old mechanical meters can run slower than they should, resulting in inaccurately low power readings). “When the new, more accurate meters were installed, customers were seeing what their bills should have been”.

Maybe. But the rate increases asked for by P.G.& E were based on use figures from the “old” meters.

If this is true, then the “smart meters” produce an additional net increase in rates for any user with an older home in the Valley without the need of additional PUC approval.

Back in the ‘60’s, even the hint of such a scandal would have awakened the acid, anti-utility tongue of the then President of the Public Utilities Commission, Bill Bennett was a rogue, a long wolf, a dissenter. An attorney in the populist tradition of being ever suspicious of ‘public’ utilities. Over the years his incessant criticisms (especially of PG and E) marginalized him and, as I recall, some personal indiscretions left him with a marred reputation.

But Bennett was tireless in his efforts to protect rate paying consumers.

Compare that with the background of today’s PUC. A bankrupt attorney who solicited utility funds for a crony, then voted them “energy efficiency program awards” potentially worth millions. An attorney who was a partner in a law firm that represented almost all of the US coal industry. A former managing director of a PR firm that led attacks on the Clinton Administration’s effort to tax fossil fuels to fund global warning efforts. A board member of a non profit organization that received funds from, inter alia, PG and E., So. Cal. Edison and SMUD. And, finally, a Chair who was the Chief Operating Officer of Southern Cal. Edison and who remains an outspoken champion of the discredited “deregulation” policy.

The sad history of independent regulatory commissions is that slowly, out of the glare of publicity, the regulated institutions come to dominate them through friendly appointments.

One of the primary differences between electing a Democrat and a Republican Governor of California should be in the quality of appointments like those to the PUC.

Such appointments do not involve commitments to spend general fund money that isn’t available. The combination of contribution limits and the small number of contributing utilities means that the loss of campaign money is a small sacrifice compared to the benefit of being clean on the issue of protecting consumers.

Progressives would do well to pay attention to such issues as they choose up sides in the argument for the Democratic nomination. And as a Party we should use our advantageous position with consumers in contrast to the Republican Party’s willingness to pander to the utilities push for profit at public expense.

Bill Cavala was Deputy Director of the Assembly Speaker’s Office of Member Services where he worked for over 30 years. He attended undergraduate and graduate school in the 1960’s and received a doctorate in political science at UC Berkeley. He taught political science at UC Berkeley during the 1970's while he worked part-time for the State Assembly.

Cavala left teaching at UC Berkeley for Assembly Speaker Willie Brown in 1981 until his tenure as Speaker ended in 1995, and he has worked for his five successors as Speaker. He now manages election campaigns for Democratic candidates.