March 9, 2009

Groups seek $2.7 million for fighting power line

Critic calls intervenor claims 'great way to make a living'

North County Times

Opponents of San Diego Gas & Electric Co.'s power line have petitioned the state to compensate them for $2.7 million in costs they say they incurred over three years battling the Sunrise Powerlink ---- costs that would be passed on to utility ratepayers.

The groups were "intervenors" in the Sunrise case under a program that allows opponents to take on a formal role in arguing merits of utility projects before the California Public Utilities Commission, the regulatory body that licenses electric, gas and telephone projects.

The state lets intervenors recoup their costs.

But critics say the reimbursement requests are excessive. And because of the prospect of making big money, they suggest the program encourages groups to routinely oppose utility projects, whether ill-conceived or not.

The intervenors counter that their bills are reasonable. They say their involvement helped hold down costs of the $2 billion transmission line, and prevented it from being built in Anza-Borrego Desert State Park and North County.

See highlights of the Sunrise Powerlink intervenor compensation requests

The most prominent intervenor, the San Diego consumer group Utility Consumers' Action Network (UCAN), asked for $1.2 million to cover fees for attorneys, experts, document preparation and travel from late 2005 through early 2009.

The commission also received requests for:

-- $797,673 from the environmental group Center for Biological Diversity.

-- $473,379 from the community group Rancho Penasquitos Concerned Citizens.

-- $257,617 from the Mussey Grade Road Alliance, represented by the husband and wife team of Joseph Mitchell and Diane Conklin of Ramona.

If granted, the consumer group's award would be the largest compensation given to an intervenor since at least 1996, according to commission records. And the environmental groups' compensation would be third-highest since then.

The current record of $866,884 was awarded to The Utility Reform Network, a San Francisco consumer group.

At the same time, the San Diego-based utility spent more than $125 million to promote its power line, and those costs will be passed on to ratepayers, said Jennifer Briscoe, a company spokeswoman.

The total includes costs associated with the 11,000-page environmental impact report prepared for the project, the company's legal bills, applications for various permits, and hosting dozens of public meetings and open houses around the region. Briscoe said the company hasn't finished tallying those expenses.

Good intentions

The intervenors billed ratepayers $300 to $480 per hour for attorneys and $75 to $270 an hour for "expert" witnesses.

And they are seeking more than $16,000 to cover the time they spent preparing their compensation claims.

The deadline for submitting claims was last week. SDG&E and the commission staff have until March 25 to file responses to the claims, and commissioners are expected to decide how much the groups will get sometime after that.

The Sunrise Powerlink is a 120-mile, high-voltage line that was given the green light by the state commission in December.

Construction is scheduled to start in 2010. The wires are to be strung from metallic towers up to 150 feet tall through southern San Diego County and southwestern Imperial County. The project was one of the most contentious and heavily studied in California history.

Designed for these types of projects, the state's intervenor program sought to empower small, poorly funded grass-roots organizations to credibly challenge corporate giants in the commission's complicated courtlike proceedings, said Susan Carothers, a commission spokeswoman.

"By hearing from different perspectives, the California PUC is better able to make informed decisions," Carothers said.

But critics say intervenors often take advantage of the program ---- and clearly did so in the Sunrise case.

"I can see how the original intent might have been a positive one," said Lani Lutar, president and chief executive officer of the San Diego County Taxpayers Association, in a telephone interview Wednesday. "But it seems to have gone out of control with unintended side effects. It has become an incentive to have these just-say-no nonprofit groups. Groups like UCAN now make it their mission to oppose every utility project that comes forward."

Scott Barnett, a San Diego-area tax watchdog who operates, said the Sunrise reimbursement requests are unreasonably high.

"It seems like quite a racket to me," he said. "I need to get into the intervenor business, I think. It's a great way to make a living."

Both taxpayer groups favored the line.

Michael Shames, executive director for the Utility Consumers' Action Network, insisted his group does not routinely oppose projects for the sake of boosting coffers with intervenor-compensation dollars.

And he disagreed the program gives the wrong incentive.

"Intervenors don't earn even one dollar unless our opposition is sound, credible and effective," Shames said by e-mail. "The economic incentive is for us to be effective, not for us to just oppose."

The commission's Web site tells intervenors this: "You may request compensation for the time and expenses you incurred to participate in the proceeding as long as your participation made a 'substantial contribution' to the outcome of the proceeding."

Shames said his personal hourly rate of $330 and his group's $1.2 million claim is justified.

"Why is that appropriate? Because SDG&E made us do a tremendous amount of work ---- they filed the equivalent of three different applications with continuous modifications throughout," he said. "We spent the better part of three years in extensive litigation and totally disproved and discredited SDG&E's representations about the economic benefits of the line and the need to route it through Anza-Borrego."

Years of fighting

The battle aside, Barnett and Lutar, the taxpayer advocates, charged the four intervenors duplicated much of the work of the Division of Ratepayer Advocates, the arm of the commission responsible for representing ratepayer interests.

"It seems like we're paying twice for the, quote, independent perspective," said Andrew Poat, vice president of public policy for the San Diego Regional Economic Development Corp. and a backer of Sunrise Powerlink.

Scott Logan, a regulatory analyst for the division who handled the Sunrise case, said there was little duplication.

"We look at it as both a complement and supplement to DRA's work," Logan said.

Because the commission frowns on repetition, the intervenors ---- in their claims ---- stressed the unique accomplishments they say they made.

The consumer group said it held down project costs, the Sierra Club and Center for Biological Diversity said they shaped the environmental report and kept the line out of Anza-Borrego, and the Ramona group said it secured extra measures to prevent wires from starting wildfires.

Harvey Payne, an attorney for Rancho Penasquitos Concerned Citizens, said his group persuaded SDG&E to scrap the last 15 miles of the power line, sparing neighborhoods in Rancho Penasquitos and Carmel Valley.

And Payne maintains his group's request for almost a half-million dollars is justified.

"This was three years of constantly fighting SDG&E," he said. "This was approximately 1,000 hours of time over three years for me. This was my expert's time over three years. But, most importantly, we are saving the ratepayers at least $72 million."

Payne hired a retired transmission engineer for Pacific Gas & Electric Co., William Stephenson, to provide expertise.

When it came to intervenor costs, the environmental groups submitted the highest hourly rate: $480. That was to cover work by San Diego attorney Steven Siegel, whom they hired for their Sunrise opposition campaign.

Kieran Suckling, executive director for the Center for Biological Diversity in Tucson, said the $480-per-hour rate is "perfectly reasonable."

The commission's allowable range for attorney compensation is $150 to $535 per hour.

"He is a very experienced senior attorney, so we billed him out at a higher rate," Suckling said. "We feel like our success in the case came from having a senior attorney. Steve did a great job for us."

The environmental groups also are seeking $70 to $150 an hour for experts who provided information about endangered animals, such as the desert bighorn sheep that roams Anza-Borrego, and native plants.

Likewise, Conklin, of the Ramona group, defended her group's $257,617 bill.

"We were totally consumed by this," Conklin said. "We worked incredible hours. We didn't bill for all those hours. It sounds like a lot ---- a quarter of a million dollars ---- but we tried to be as reasonable as possible."