Energy, Utilities and Communications Committee
 

Testimony of Dana Appling, Director
Division of Ratepayer Advocates

February 22, 2006

Good Morning Madame Chair and members of the Committee. My name is Dana Appling and I am the Director of the Division of Ratepayer Advocates (DRA). I would like to begin by thanking you for having me here to testify on the activities of DRA.

DRA is the independent division of the California Public Utilities Commission (CPUC) that advocates solely on behalf of utility ratepayers. Our statutorily designated mission and goal, as set forth in Public Utilities Code section 309.5, is to “represent and advocate on behalf of the interests of public utility customers and subscribers to obtain the lowest possible rate for service consistent with reliable and safe service levels.” At this point, I especially want to thank Madame Chair for authoring SB 608 last year, which was signed by the Governor. SB 608 goes far to strengthen DRA’s independence, and consequently, its ability to effectively advocate on behalf of ratepayers.

DRA advocates for approximately 18 million electric customers, 24 million natural gas customers, 6.8 million water customers, and over 40 million wireless and landline telephone customers.

To effectively represent these ratepayers, DRA maintains a professional staff of up to 122, including engineers, auditors, economists, and financial and policy analysts that are experts in electric, natural gas, telecommunications, and water industry regulation, with a budget allocation of approximately $22 million dollars.

The DRA staff is devoted to ensuring that ratepayers interests are represented at the CPUC and in other significant proceedings, particularly when the outcome of those proceedings determine what consumers pay for utility services and what the quality of those services will be.

On behalf of all of the dedicated people who make up DRA I appreciate this opportunity to update the Committee on DRA’s efforts and progress. I have provided you written responses to questions posed by the committee and won’t go into too much detail here, but will briefly summarize the responses.

To the question concerning DRA’s representation of low income, rural and minority communities: first I will note that anything that DRA is able to accomplish on behalf of ratepayers in general will benefit these particular ratepayer groups. Nevertheless, over the past year we have focused attention on these communities in very specific ways.

ELECTRIC AND GAS

• In the rate design and cost allocation phase of general rate cases, DRA strives to keep the cost allocation to California Alternative Rates for Energy (CARE) ratepayers as low as possible.
• Oppose proposals to change the historic equal-cents-per therm allocation of surcharges placed on gas customers to fund the CARE program for low income ratepayers.
• Participates in the ongoing process to establish the design, plan and budget allocation of the utility Low Income Energy Efficiency programs.
• Attends Low Income Oversight Board meetings and provides valuable feedback and obtains valuable information.
• Investigating the impact of PG&E’s proposed local front office closures on low-income and minority communities.
• Gathering information from the utilities on, and monitoring the status of, new low income program activities in response to winter initiatives aimed at informing and assisting low income customers on mitigating the impacts of high gas costs on total energy utility bills.
• Monitoring the utilities to ensure that they are providing direct assistance weatherization/energy efficiency installations.
• Reviewing the success of alternative payment options intended to prevent or limit the number of shut-offs of utility service, and the shut-off moratorium. 

TELECOMMUNICATIONS 

DRA’s Telecommunications Section advocates for the needs and interests of under-represented groups in a number of different venues, including a number of Public Purpose Programs established by statute to fund and provide discounts, special services or equipment to target groups in California. DRA serves on each of the Advisory Committees of these boards to provide advice and direction so that policy choices and implementation decisions keep pace both with the needs of the recipients and the development of new technologies and so that the underrepresented communities are optimally served:

• The Universal Lifeline Telephone Service (ULTS) fund
• The California High-Cost Funds (CHCF) A and B
• The Telecommunications Assistive Devices for the Deaf and Disabled Advisory Committee (TADDAC)
• The California Teleconnect Fund (CTF)
• The Universal Service Fund

WATER

• Affordability of water utility bills, i.e., water rates for basic human needs should be low enough so that those on low-or fixed-incomes will not need to curtail or eliminate other essential services to pay their water bills.
• Strives to promote relationships with interveners.
• Provides onsite community presence.
• Advocates for the establishment Low Income Rate Assistance Programs.
• Works directly on ways to subsidize disadvantaged water districts
• Investigates how underrepresented communities can benefit from Proposition 50 Grant Funds.

To your next question: Since the enactment of SB 608, does the DRA now have sufficient independence from the CPUC? The answer is unequivocally yes! President Peevey has been supportive and we will continue to work cooperatively to ensure that DRA has the independence and the resources to effectively do its job.

You have asked about the sufficiency of our resources; and the answer is that we are in evaluation mode. With the hiring of two new Deputy Directors and a Lead Attorney authorized by SB 608, DRA will achieve greater efficiencies and productivity from our current resources, and consequently, more effective representation of ratepayers. Once in place, we will be better able to evaluate the true need for resource additions. The one exception to that statement is in the water utility area. DRA has been short for years in this area and I don’t expect that new management alone will get us where we need to be.

Which brings me to a summary of the response to your last question: In what areas does DRA need improvement and what are your plans for improving effectiveness? DRA has made a lot of progress in the past year and one-half, but there is still much work to be done. I am hiring two new Deputy Directors who will be strong managers committed to implementing process improvements throughout DRA. In addition, I look forward to hiring the DRA Lead Attorney, authorized by Madame Chair’s SB 608, which will improve the coordination of our legal teams and positions. Other expected improvements include:

• Consistent and firm positions.
• Quality of work: rational and practical positions and recommendations.
• Work better and faster with team approaches that incorporate processes and systems.
• More engaged with, and aware of, the concerns of government officials for their constituents, collaborate with other consumer advocacy groups and consumer based organizations and talk more with representatives of the regulated industries to better understand their concerns.