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Sempra spins Sunrise Powerlink in the Union-Tribune

UCAN's Michael Shames responds

The campaign to ballyhoo the proposed Sunrise Powerlink has one beneficial effect: it is shining light on how San Diego’s overlords try to use misinformation to manipulate public opinion.

San Diego Gas & Electric and its parent, Sempra Energy, want to build the 150-mile transmission line to bring, purportedly, solar power from Imperial Valley at a projected cost of $1.5 billion, which is probably grossly understated. Critics point out that the line would slash its way through Anza-Borrego Desert State Park, Grapevine Canyon, Santa Ysabel Canyon, and Rancho Peñasquitos, ending in Torrey Hills.

The state says that by the end of 2010, renewable energy must be 20 percent of major utilities’ deliveries. SDG&E is at a pitiful 6 percent and admits it probably won’t make the deadline. Southern California Edison is already at 16 percent and Pacific Gas & Electric at 12. Governor Arnold Schwarzenegger wants 33 percent renewable by 2020, and former vice president Al Gore wants the nation to hit 100 percent renewable in ten years. In theory, Sunrise Powerlink would help SDG&E meet its 2010 California bogey, although the company admits that there is no guarantee that Sunrise would bring in clean energy.

Sempra’s natural gas operation is the largest in the United States. Some say Sempra has a vested interest in sabotaging renewable energy. In this year’s report to the Securities and Exchange Commission, Sempra admits its business could be hurt by the push for clean, alternative energy. It wants to bring in questionable liquefied natural gas from Indonesia and burn it in its Rosarito plants, moving the power to Los Angeles, its major market. The Rosarito plant evades U.S. pollution requirements. “What they are doing is trying to build dependency on sources of power that they control,” says city attorney Mike Aguirre. “They are holding renewable energy hostage to Powerlink.” Aguirre is pushing for the building of solar and alternative energy facilities within the San Diego metropolitan area.

One of the groups battling Sunrise is Utility Consumers’ Action Network (UCAN), a 30,000-member organization that has fought every SDG&E rate-increase attempt since 1984, with many great successes. On Monday, July 14, the Union-Tribune wrote an editorial titled “Lucrative rip-off: SDG&E bills include interest-group costs.” The editorial was inaccurate and pathetically fatuous. The second sentence read, “But what few San Diego Gas & Electric customers know is that their monthly bills are higher because UCAN’s small staff has collected nearly $2 million from SDG&E ratepayers for intervening before the California Public Utilities Commission in opposition to SDG&E projects from 1989 to 2006.”

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Think about that nonsense. SDG&E has 1.4 million customers, residential and business. The grand sum of $2 million spread over 17 years would make a tiny, tiny dent in bills received by more than a million customers annually. However, that claim of $2 million is inaccurate. The California Public Utilities Commission in 1981 set up a program by which intervenors in rate actions, such as UCAN, can get reimbursed for their work on a rate case. However, the commission’s intervenor compensation guide makes it clear that to be paid, an intervenor must make a “substantial contribution” to the rate-setting proceedings. In requesting compensation, an intervenor should weigh “the actual costs of your participation in the proceeding against the benefits achieved for ratepayers as a result of your participation.” Intervenors must show that their work did not duplicate that of others involved in the process.

Says Michael Shames, founder and head of UCAN, “The law says you can’t have intervenor compensation unless the benefits [to the ratepayer] exceed the cost [the intervenor] is seeking. There is not a scenario in which ratepayer bills could be higher because of what they pay to UCAN.”

The U-T’s editorial did not mention, of course, that on January 26, 2002, another editorial that appeared in the

U-T lauded Shames as a “consumers’ hero.” UCAN had challenged a deal cooked up in a back room by Sempra and former governor Gray Davis. UCAN won and saved the ratepayers $363 million, later reduced to $197 million. Said the editorial about UCAN, “Good work, guys.” If the U-T’s statement that UCAN has cost ratepayers $2 million over 17 years were accurate — and it is not accurate — even the U-T might understand that $197 million is a very good return on a $2 million investment. It’s even better on the actual investment: zero.

The July 14 editorial was written by Bob Kittle, the U-T’s editorial page editor. Kittle got information for his piece from SDG&E, says Shames, quoting a phone conversation he had with Kittle.

In an email, I asked Kittle about that. He shot back, “In fact, I received no information from SDG&E.” He explained that the information provided to him was given by Sempra, SDG&E’s parent. Hmmm. This isn’t even hairsplitting. It’s rank deception.

Then a spokeswoman for SDG&E told me, “We were contacted by the U-T and did provide information about UCAN intervenor fees.” But SDG&E or Sempra did not suggest or plant the editorial, she asserted. Remember, she is a spokeswoman for SDG&E, not Sempra. But I am not going to play that game. If she works for SDG&E, she works for Sempra.

Kittle’s editorial went on to claim that intervenor fees are a “multimillion-dollar rip-off for consumers” because the utilities commission already has a Division of Ratepayer Advocates, which supposedly represents the consumers. But those who follow these utility proceedings say that bureaucratic sclerosis and political pressure often render the ratepayer advocates ineffective and intervenor arguments frequently carry the day.

Getting even sillier, the editorial went on to criticize Shames for making $90,000 a year over a three-year period. This is peanuts. In big firms, first-year attorneys, right out of law school, can make $150,000. Shames has been practicing law for UCAN for 23 years. He says he charges $350 an hour and that this is half of what SDG&E’s outside lawyers charge. SDG&E would not reveal what it pays its outside attorneys. “Shames could make four times the money if he went to work for the industry,” says someone who has studied San Diego utilities for decades, noting that Sempra paid its chairman $9.5 million last year and its president $6.5 million.

Two days after the U-T’s fallacious editorial appeared, a group called Community Alliance for the Sunrise Powerlink, funded by SDG&E/Sempra, held a press conference to denounce project delays. Julie Meier Wright, cochair of the group, and also president of the San Diego Regional Economic Development Corporation, complained that the project won’t be finished until 2011 at the earliest. This is costing ratepayers $350,000 a day, she asserted, and it means the outdated South Bay Power Plant keeps belching pollution into the air. Shames says her statements were hogwash. Sempra’s economic assumptions for Sunrise have already been found unreliable by the utilities commission, he says. The $350,000 “is totally made up,” he says. And “it is a total fallacy that Sunrise is required in order for South Bay to be closed. Even if Sunrise is not operational until 2017, you don’t need South Bay to be operating.”

At the press conference, Wright plugged the U-T editorial. “Ratepayers pay for the intervenors,” she says she told the audience. Since there is already a Division of Ratepayer Advocates, “It’s an inherent conflict of interest. We pay for the delays, and we pay for the intervenors.” She claims she had not talked with Kittle before referring to the editorial. Shames thinks the editorial and press conference were orchestrated. I agree.

Meanwhile, Charles Langley of UCAN says the organization got “a tremendous surge of community support” as a result of the error-filled editorial. It brought in several new members. And some old members dropped their subscriptions to the U-T.

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The campaign to ballyhoo the proposed Sunrise Powerlink has one beneficial effect: it is shining light on how San Diego’s overlords try to use misinformation to manipulate public opinion.

San Diego Gas & Electric and its parent, Sempra Energy, want to build the 150-mile transmission line to bring, purportedly, solar power from Imperial Valley at a projected cost of $1.5 billion, which is probably grossly understated. Critics point out that the line would slash its way through Anza-Borrego Desert State Park, Grapevine Canyon, Santa Ysabel Canyon, and Rancho Peñasquitos, ending in Torrey Hills.

The state says that by the end of 2010, renewable energy must be 20 percent of major utilities’ deliveries. SDG&E is at a pitiful 6 percent and admits it probably won’t make the deadline. Southern California Edison is already at 16 percent and Pacific Gas & Electric at 12. Governor Arnold Schwarzenegger wants 33 percent renewable by 2020, and former vice president Al Gore wants the nation to hit 100 percent renewable in ten years. In theory, Sunrise Powerlink would help SDG&E meet its 2010 California bogey, although the company admits that there is no guarantee that Sunrise would bring in clean energy.

Sempra’s natural gas operation is the largest in the United States. Some say Sempra has a vested interest in sabotaging renewable energy. In this year’s report to the Securities and Exchange Commission, Sempra admits its business could be hurt by the push for clean, alternative energy. It wants to bring in questionable liquefied natural gas from Indonesia and burn it in its Rosarito plants, moving the power to Los Angeles, its major market. The Rosarito plant evades U.S. pollution requirements. “What they are doing is trying to build dependency on sources of power that they control,” says city attorney Mike Aguirre. “They are holding renewable energy hostage to Powerlink.” Aguirre is pushing for the building of solar and alternative energy facilities within the San Diego metropolitan area.

One of the groups battling Sunrise is Utility Consumers’ Action Network (UCAN), a 30,000-member organization that has fought every SDG&E rate-increase attempt since 1984, with many great successes. On Monday, July 14, the Union-Tribune wrote an editorial titled “Lucrative rip-off: SDG&E bills include interest-group costs.” The editorial was inaccurate and pathetically fatuous. The second sentence read, “But what few San Diego Gas & Electric customers know is that their monthly bills are higher because UCAN’s small staff has collected nearly $2 million from SDG&E ratepayers for intervening before the California Public Utilities Commission in opposition to SDG&E projects from 1989 to 2006.”

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Think about that nonsense. SDG&E has 1.4 million customers, residential and business. The grand sum of $2 million spread over 17 years would make a tiny, tiny dent in bills received by more than a million customers annually. However, that claim of $2 million is inaccurate. The California Public Utilities Commission in 1981 set up a program by which intervenors in rate actions, such as UCAN, can get reimbursed for their work on a rate case. However, the commission’s intervenor compensation guide makes it clear that to be paid, an intervenor must make a “substantial contribution” to the rate-setting proceedings. In requesting compensation, an intervenor should weigh “the actual costs of your participation in the proceeding against the benefits achieved for ratepayers as a result of your participation.” Intervenors must show that their work did not duplicate that of others involved in the process.

Says Michael Shames, founder and head of UCAN, “The law says you can’t have intervenor compensation unless the benefits [to the ratepayer] exceed the cost [the intervenor] is seeking. There is not a scenario in which ratepayer bills could be higher because of what they pay to UCAN.”

The U-T’s editorial did not mention, of course, that on January 26, 2002, another editorial that appeared in the

U-T lauded Shames as a “consumers’ hero.” UCAN had challenged a deal cooked up in a back room by Sempra and former governor Gray Davis. UCAN won and saved the ratepayers $363 million, later reduced to $197 million. Said the editorial about UCAN, “Good work, guys.” If the U-T’s statement that UCAN has cost ratepayers $2 million over 17 years were accurate — and it is not accurate — even the U-T might understand that $197 million is a very good return on a $2 million investment. It’s even better on the actual investment: zero.

The July 14 editorial was written by Bob Kittle, the U-T’s editorial page editor. Kittle got information for his piece from SDG&E, says Shames, quoting a phone conversation he had with Kittle.

In an email, I asked Kittle about that. He shot back, “In fact, I received no information from SDG&E.” He explained that the information provided to him was given by Sempra, SDG&E’s parent. Hmmm. This isn’t even hairsplitting. It’s rank deception.

Then a spokeswoman for SDG&E told me, “We were contacted by the U-T and did provide information about UCAN intervenor fees.” But SDG&E or Sempra did not suggest or plant the editorial, she asserted. Remember, she is a spokeswoman for SDG&E, not Sempra. But I am not going to play that game. If she works for SDG&E, she works for Sempra.

Kittle’s editorial went on to claim that intervenor fees are a “multimillion-dollar rip-off for consumers” because the utilities commission already has a Division of Ratepayer Advocates, which supposedly represents the consumers. But those who follow these utility proceedings say that bureaucratic sclerosis and political pressure often render the ratepayer advocates ineffective and intervenor arguments frequently carry the day.

Getting even sillier, the editorial went on to criticize Shames for making $90,000 a year over a three-year period. This is peanuts. In big firms, first-year attorneys, right out of law school, can make $150,000. Shames has been practicing law for UCAN for 23 years. He says he charges $350 an hour and that this is half of what SDG&E’s outside lawyers charge. SDG&E would not reveal what it pays its outside attorneys. “Shames could make four times the money if he went to work for the industry,” says someone who has studied San Diego utilities for decades, noting that Sempra paid its chairman $9.5 million last year and its president $6.5 million.

Two days after the U-T’s fallacious editorial appeared, a group called Community Alliance for the Sunrise Powerlink, funded by SDG&E/Sempra, held a press conference to denounce project delays. Julie Meier Wright, cochair of the group, and also president of the San Diego Regional Economic Development Corporation, complained that the project won’t be finished until 2011 at the earliest. This is costing ratepayers $350,000 a day, she asserted, and it means the outdated South Bay Power Plant keeps belching pollution into the air. Shames says her statements were hogwash. Sempra’s economic assumptions for Sunrise have already been found unreliable by the utilities commission, he says. The $350,000 “is totally made up,” he says. And “it is a total fallacy that Sunrise is required in order for South Bay to be closed. Even if Sunrise is not operational until 2017, you don’t need South Bay to be operating.”

At the press conference, Wright plugged the U-T editorial. “Ratepayers pay for the intervenors,” she says she told the audience. Since there is already a Division of Ratepayer Advocates, “It’s an inherent conflict of interest. We pay for the delays, and we pay for the intervenors.” She claims she had not talked with Kittle before referring to the editorial. Shames thinks the editorial and press conference were orchestrated. I agree.

Meanwhile, Charles Langley of UCAN says the organization got “a tremendous surge of community support” as a result of the error-filled editorial. It brought in several new members. And some old members dropped their subscriptions to the U-T.

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