Two New Commissioners Could Help to Energize California PUC

With the appointment last week of two new members to the California Public Utilities Commission, Gov. Arnold Schwarzenegger can expect solid support from the agency as he attempts to revamp the state’s energy market.

Steve Poizner and Dian Grueneich will join the five-member commission early next month. They will team with three incumbents who have backed key elements of the governor’s still-evolving energy program, which aims to create a stable, business-friendly power market and avoid a repeat of the 2000-01 energy crisis.

Schwarzenegger has frequently sided with corporate interests during his first year in office. Poizner, a former Silicon Valley technology executive, and Grueneich, an environmentalist and regulatory lawyer, are both seen as reliably pro-business.

But the two also share some of the governor’s more liberal interests. Fellow Republican Poizner, for example, touted renewable energy programs during an unsuccessful run for the Assembly this year. And Grueneich, a Democrat, has solid pro-environmental credentials. Consumer advocates said they were counting on her to push for the fair treatment of both business and residential consumers by the PUC, which regulates companies that provide power, telephone and water service to Californians.

Poizner and Grueneich “don’t have ideological baggage or demonstrated bias to one narrow point of view,” said V. John White, director of the Center for Energy Efficiency and Renewable Technology in Sacramento.

PUC watchers said the departure of Commissioners Loretta M. Lynch and Carl Wood, who regularly differed with the majority on important votes, should bring more cohesiveness to the panel. Over the last two years, personal spats between President Michael Peevey and Lynch have marred many PUC meetings.

Lynch regularly denounced Peevey and Commissioner Susan Kennedy for being anti-consumer and overly beholden to business. Peevey in turn accused Lynch of bogging down the commission with carping and disruptive behavior.

With the arrival of Poizner and Grueneich, work at the commission “will move forward more smoothly,” said Severin Borenstein, director of the University of California Energy Institute at Berkeley. He predicted that the PUC would go from having “a really giant difference of opinion” among members to being “a group of pretty centrist commissioners who will agree on many things.”

Even Lynch said her initial reaction to the appointments was one of relief “because some absolute ideologues were on the short list.” Lynch said she was taking “a wait-and-see” approach to the new PUC members.

Poizner said last week in an interview that he had already set up meetings with consumer groups.

“I understand one of the key roles on the commission is looking out for consumers,” he said. “I take that responsibility very seriously.”

Still, losing Lynch will deprive consumer advocates of an important voice. Lynch “fought the good fight” on behalf of consumers grappling with blackouts and soaring utility bills, said Michael Florio, a staff attorney with the Utility Reform Network, a San Francisco ratepayer group.

Schwarzenegger, who last week said voters should trust him to keep the lights on, is counting on the commission to enact his energy program. The alternative is to wait for the Democratic-dominated Legislature to send him its proposals for making sure Californians have a steady supply of economically priced power.

The governor’s predecessor, Gray Davis, was recalled last year in part because of voter unhappiness with how he handled the energy crisis, and Schwarzenegger clearly wants to avoid that trap.

His emerging energy policy appears to be aimed at developing a so-called hybrid market for electricity.

“We’re very interested in enhancing and strengthening the California economy ... but in a very environmentally aware way,” said Peevey, a former utility executive appointed to the PUC by Davis.

During the last year, Peevey has aligned himself closely with Schwarzenegger on initiatives that have gotten an enthusiastic reception from electronics manufacturers, heavy industry and big-box retailers that consume high volumes of megawatts.

Under Schwarzenegger’s and Peevey’s scenarios, generating electricity no longer would be the exclusive province of investor-owned utilities such as Edison International’s Southern California Edison Co., PG&E; Corp.’s Pacific Gas & Electric Co. and Sempra Energy’s San Diego Gas & Electric Co. Neither would the crucial task be handed over completely to private, for-profit “merchant” companies such as San Jose-based Calpine Corp. -- as happened under the disastrous 1996 deregulation law that led to the energy crisis.

Such a middle ground, said Peevey, relies on a three-pronged approach of increasing energy efficiency, developing new sources of nonpolluting renewable electricity and speeding the construction of state-of-the-art, natural-gas-fired generating plants.

Peevey and the governor also have said they would like to create a market mechanism that would give some large energy consumers an opportunity to buy low-cost electricity directly from private generators as long as costs are not shifted to residential and small-business utility customers.

Grueneich couldn’t be reached for comment. Poizner declined to discuss his position on the issues he would be voting on next year. But PUC watchers from industry, academia and consumer groups said the pair’s philosophies seemed in sync with Peevey’s hybrid model.

Florio, who often sided with Lynch in contentious cases, said he was “cautiously optimistic” about both new commissioners.

“I worry about both of them being a little bit too deregulation-friendly,” he said, “but that remains to be seen.”

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(BEGIN TEXT OF INFOBOX)

New PUC appointees

Dian Grueneich

Age: 52

Residence: Berkeley

Education: Bachelor’s degree, Stanford University; law degree, Georgetown University.

Profession: Attorney and principal partner of Grueneich Resource Advocates, an energy and environmental law consulting company.

Employment background: Practiced law with a variety of San Francisco Bay Area law firms and was staff counsel at the California Energy Commission. Served as board president of the California League of Conservation Voters.

Steve Poizner

Age: 47

Residence: Los Gatos

Education: Bachelor’s degree in electrical engineering, University of Texas; master’s degree in business administration, Stanford University.

Profession: Teacher at Mount Pleasant High School in San Jose.

Employment background: Founded SnapTrack Inc., a cellphone technology company. Worked as a White House fellow, concentrating on cyberspace security.

Los Angeles Times