ANNUALRE ALREPORT 2010-20112 TURN Annual Report Fo r t h e y e ar 2 0 1 0 t o 2011 T h e U t lilt y R e f o rm Ne t work
Advocacy
a s s i s tan c e
action
TURN made national headlines with the release of documents revealing that PG&E had deferred crucial pipeline maintenance.
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Customers Should Come First
T
he vital importance of TURN’s mission to protect utility customers was never more apparent than after the fatal explosion of a Pacific Gas & Electric pipeline in San Bruno, California, in September, 2010.
Urgent safety issues quickly moved to the forefront after the explosion, which claimed 8 lives, burnt over 30 homes and devastated an entire neighborhood. The explosion pushed TURN into the national spotlight as PG&E’s pipeline safety pratices, and the California Public Utilities Commission’s (CPUC) oversight, came under question. A series of investigations by state and federal agencies ultimately revealed that PG&E had failed to properly maintain not only the exploded pipes, but also hundreds of others, and that the CPUC had failed to do
anything about it. Responding quickly and forcefully to the explosion, TURN made national healines with the release of documents revealing that PG&E had deferred crucial pipeline maintenance. TURN showed that in 2007 PG&E was authorized to spend $5 million to replace a section pipe only 2.8 miles from the pipe that exploded; the repair was never made, and the following year PG&E coincidentally spent $5 million extra on executive bonuses. TURN’s executive director, Mark Toney, and Senior Attorney Mike Florio, were featured on all major national newscasts, as well as NBC Nightline and CNN’s Anderson
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TURN’s demands for accountability went beyond PG&E to a CPUC that TURN had long criticized for being too cozy with the utility companies.
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Cooper360 Live. TURN was quoted in every major newspaper in California as well as the NY Times, Wall Street Journal and many other national publications, as the entire country was riveted on the explosion and its aftermath. TURN’s demands for accountability went beyond PG&E to a CPUC that TURN had long criticized for being too cozy with the utility companies. As the explosion brought the agency under increasing scrutiny, TURN’s demands for change at the CPUC were echoed in the media and the public. Governor-elect Jerry Brown paid attention. After taking office, Brown appointed TURN senior attorney Mike Florio to the CPUC- 37 years after Sylvia Siegel gave him his first job as a lawyer at TURN! Brown’s other appointments to the CPUC, Catherine Sandoval and Mark Ferron, have joined Commissioner Florio in numerous pro-consumer decisions, showing that our calls for change have been heard! page 4
Consumer Safety and Pro
I
f we’ve learned anything from the horrific events in San Bruno it is that regulators’ job is not to trust utility corporations to do the right thing, but rather to oversee their operations, which have a unique and broad impact on our lives and safety. TURN leads the way with innovative, strong and far-reaching advocacy that in the past year led to major wins including increased utility accountability for safety measures, restrictions on the ability of phone companies to cram unsuspecting customers, and an investigation into the San Bruno explosion. P i pe l i ne Sa f et y
T U R N W i n s N ew
In January of 2011,TURN served a formal demand on the CPUC for an official, public investigation the San Bruno explosion, one that could result in fines or other penalties. State Senator Mark Leno and San Francisco District Attorney Dennis Herrera supported TURN’s demands at a press conference, and hundreds of consumers joined the call through an online petition to the CPUC. A month later, the CPUC opened up two proceedings, one on the San Bruno explosion itself, and the other a review of gas pipeline safety statewide, with former TURN attorney, Commissioner Mike Florio at the helm. PG&E’s own failures to keep records and follow best practices will mean starting from scratch on pipeline safety. Southern California Gas Company and San Diego Gas and Electric have also proposed massive rate hikes to pay for gas pipeline safety. TURN will be vigilant in protecting consumers from the costs of deferred maintenance, inadequate past testing or other safety issues that utilities should bear responsibility for.
G a s Sa f et y A c c o unta b i l i t y
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TURN won new accountability requirements for money collected from customers that PG&E claims is needed for safety. In the past, the CPUC has allowed PG&E to charge ratepayers without requiring that the safety measures claimed as necessary are actually made. TURN’s victory maximizes safety and minimizes misuse of money by preventing PG&E from shifting ratepayer money from safety to profits and perks, as has been done in the past.
T U R N s av e d P G & E c u s to m er s
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it claims it needs for safety and integrity for that purpose, or return it to customers.
some of the from its lucr storage ope with custo
otection TURN will be vigilant in protecting consumers from the costs of deferred maintenance.
M I L L I O N in the case,
te c t i o n s , re q u i r i ng t h e P G & E to :
re
e profits rative erations omers.
Report on how it is spending authorized funds.
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For the first time, phone companies will be re investigate companies that add charges to ph ensure the legitimacy of customer authorizati provide detailed reporting on cramming in
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equired to hone bills, ions, and ncidents.
B i g W i n f o r S m a l l Bu s i ne s s e s
Small businesses were paying hugely unfair bills due to draconian back-billing practices by utility companies, which inexplicably allowed utility companies to hold small businesses responsible for up to 3 years of back charges due to utility billing or meter error. Thanks to TURN, those draconian back-billing rules have been replaced with similar protections to the ones TURN demanded and won for residential customers. Back-billing often occurs due to utility error or meter malfunction, and can result in huge, unexpected utility bills, which utility companies were exacerbating with additional deposit demands.
TURN advocated for the same limits that apply to residential customers; 3 months in cases of utility error, and elimination the
requirement of an additional deposit will be to restore service in back billing cases. TURN won further limits on onerous deposit requirements that will hopefully prevent the bill shock small businesses were suffering during the old rules.
N ew R u l e s W i l l Sto p Cra m m er s an d H o l d t h e m a c c o unta b l e
Phone companies will be held accountable for cramming —the practice of placing of unauthorized charges on customers’ phone bills — under rules proposed by TURN and other consumer groups that were adopted by the CPUC in October, 2010. For the first time, phone companies will be required to investigate companies that add charges
to phone bills, ensure the legitimacy of customer authorizations, and provide detailed reporting on cramming incidents. More importantly, phone companies will ultimately be held responsible for refunding all unauthorized charges, a necessary counterbalance to the revenues the telcos earn from 3rd party billing. ppaage g e 88
Smart Consumers vs. SmartMeter
T
URN opposed smart meters from the very beginning, due to the high costs to customers and dubious benefits. But even TURN did not predict the customer outrage that the meters generated, or the ongoing concern about their accuracy and health effects. TURN urged utilities to offer customer a choice, and our “NO SMART METER” sign was downloaded by hundreds of consumers who demanded the right to refuse the meters. TURN provided customer and education and assistance to hundreds of consumers as well, helping customers to understand how to check their meters’ accuracy, or to object to installation if they wanted to. In addition, TURN successfully advocated for vital privacy protections that will prevent the utility companies for selling or sharing customer data without the customers’ express permission. TURN also won changes to the flawed utility customer education programs, including better, easier-to-understand customer tools that will help consumers avoid high bills, including notifications of rate changes and impacts. Consumers Mobilize Against Safety Threats
Not all customers can afford smart phones, high-speed Internet and expensive bundled services. Hundreds of Californians attended public hearings Redding, Bakersfield, San Diego, San Jose and elsewhere to oppose phone company proposals reduce the quality of basic phone service, including crucial regulation of local 9-1-1 emergency services. page 9
rs
Our “NO SMART METER” sign was downloaded by hundreds of consumers who demanded the right to refuse the meters.
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PG&E agreed to settle with TURN, the CPUC’s Division of Ratepayer Advocates and 14 other parties for almost half of what PG&E had originally hoped for, saving customers over $800 million.
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Lower Rates, Less Waste C o n s u m er s Wo n ’ t Pay f o r G o l d en Para c h ute
In April, 2011,disgraced PG&E CEO Peter Darbee finally announced his retirement. Darbee led the company at the time of the San Bruno explosion, and also spearheaded the failed Prop 16 campaign and disastrous smart meter debacle. No one was sorry to see him go, but the $35 million golden parachute he was awarded was another story; TURN immediately and publicly demanded that PG&E shareholders to pick up the tab for Darbee’s soft landing, rather than customers. TURN’s demands were met when PG&E’s board announced that Darbee’s retirement costs would come out of money earmarked for profits rather than rates. P G & E R ate s : Su b s tant i a l Sav i ng s f o r t h e N e x t 3 Year s
Every three years, PG&E submits its general rate case to the CPUC, a massive effort to justify millions in unnecessary rate hikes for the next three years. The 2011 rate case was no exception. As usual, PG&E’s request to the CPUC was hugely inflated, demanding over $1.5 billion more from customers, despite the litany of recent failures by PG&E- smart meters, Prop 16 and the San Bruno explosion. TURN fought back with skilled, expert legal advocacy, demolishing many of the claims made by PG&E’s scores of lawyers and corporate apologists. PG&E agreed to settle with TURN, the CPUC’s Division of Ratepayer Advocates and 14 other parties for almost half of what PG&E had originally hoped for, saving customers over $800 million. page 12
M o nt h ly Sav i ng s f o r Year s to C o m e
TURN racked up additional savings for every customer, every month, for years to come, with the defeat of PG&E’s proposed customers charges. PG&E wanted every single household in its service territory to pay for the privilege of being a customer every single month, even if they didn’t use any electricity at all! The $3 monthly charges would have flown in the face of our tiered rate system that rewards conservation, and violated statutory protections against rate hikes won by TURN in 2001. CPUC President Peevey was all too willing to let PG&E add the new charges to customers’ bills, but TURN fought back, with staff attorney Matt Freedman leading the charge at the CPUC, which was eventually forced to agree with TURN and a broad coalition of allies that the proposal was unfair and illegal.
en d o f y ear f i nan c i a l tota l s
Property & Equipment $28,675
Deposits $57,979
Accounts Receivable $3,269
Unrestricted $1,408,701
Prepaid Expenses $2,390 Investments $1,099,961
Cash & Cash Equivalents $456,231
Accounts Payable & Accrued Expenses $239,804
Assets page 13
L i a b ili t i e s
TURN’s demands for accountability went beyond PG&E to a CPUC that TURN had long criticized for being too cozy with the utility companies. page 14
TURN is making sure that the new market for green energy isn’t a breeding ground for abuse.
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Livable Planet
T
he real promise of renewable energy is that it can be clean, green and affordable. TURN’s victories in winning affordable renewable energy in California will pay off for customers and the planet for years to come.
During the deregulation disaster, we saw how much damage runaway electric markets can do. With renewable energy, TURN is making sure that the new market for green energy isn’t a breeding ground for abuse. Customer-funded purchases of green energy should promote stable rates, drive technological innovation, and position California as a national leader in sustainable energy policy. Ca l i f o rn i a’ s In c rea s e d C o m m i t m ent to G reen E nergy
TURN successfully advocated for a major increase in the amount of renewable energy California’s utility companies will purchase in the future, extending the former 20 percent renewable energy goal to a 33 percent goal by December 31, 2020.
T h e new l aw c o m e s w i t h s tr o ng c o n s u m er pr ote c t i o n s w o n b y T U R N , t h at w i l l s av e m o ne y, an d t h e p l anet, f o r y ear s to c o m e :
Capping total customer costs for
renewable energy
purchases.
Maximizing benefits by requiring purchases with maximum
environmental and economic value to California.
Limit the use of Tradable Renewable energy Credits, which send the benefits of renewable energy out of California. page 16
Member Support TURN’s effectiveness is largely due to the fact that we are not beholden to any corporate or government funding sources. In fact, thanks to the continued support of members like you, TURN is the only independent statewide utility consumer advocacy organization in California. We appreciate every contribution, and we multiply your donations into millions in savings every single year.