NARUC/NIGERIA REGULATORY PARTNERSHIP

“WHO WILL HERD THE CATS?”A PRESENATION ON BEST PRACTICES FOR INFORMING

CONSUMERS ABOUT DEVELOPMENTS AND RATE CHANGES

BY

NOEL A. OBIORA

DISCLAIMEROPINIONS EXPRESSED IN THIS PRESENTATION ARE

THOSE OF THE AUTHOR AND ARE NOT INTENDED TO REFLECT THE OPINIONS OF THE CALIFORNIA PUBLIC

UTILITIES COMMISSION

A NOTE ON THE TITLEThe title is intended to reflect the difficulty of consumers recognizing the power in their numbers and organizing themselves into a cohesive unit that fights for their protection and common interests in the regulatory compact -- By the lone nature of their survival instincts, even after they are organized, it is difficult if not impossible to keep them together going forward from issue to issue, thus a continuous effort is needed. – The title was not intended to denigrate ratepayers

KINDS OF ELECTRICITY CONSUMERS

RESIDENTIAL RATEPAYERS◦ LARGE RESIDENTIAL USERS◦ SMALL RESIDENTIAL USERS◦ VULNERABLE CLASS OF RESIDENTIAL USERS

MEDICAL BASELINE CUSTOMERS SENIOR CITIZENS LOW INCOME

SMALL BUSINESSES◦ DEFINING SMALL BUSINESS IN NIGERIA

USAGE / REVENUE STREAM ONE OR MORE CLASSES OF SMALL BUSINESSES

LARGE ENERGY CONSUMERS◦ LARGE BUSINESSES ◦ INDUSTRIAL CUSTOMERS ◦ GOVERNMENT

FEDERAL, STATE, LOCAL GOVERNMENT OR CITIES

◦ INSTITUTIONS

THE PROBLEM“We ain’t made to survive, cause it’s a set up

and even though you’re fed-up…Keep ya head up”Tupac Shakur (“Keep your head up”)

THE REGULATORY COMPACT WAS SET-UP TO CHECK OR REDUCE THE

OPPRESSIVE TENDENCIES OF A NATURAL MONOPOLY, NOT TO ELIMINATE IT. NOTHING CAN

ELIMINATE IT … YET

THE SET UP: UTILITY vs. RESIDENTIAL

RATEPAYERTHE UTILITY

◦ LARGE INVESTMENT IN INFRASTRUCTURE◦ LONG-TERM FINANCIAL INDEBTEDNESS◦ POLITICAL AND ECONOMIC CLOUT◦ INSIGNIFICANT COST OF PARTICIPATION ◦ EXPERT IN REGULATORY PRECEPTS

THE RESIDENTIAL RATEPAYER◦ PRIMARY INVESTMENT: HOME◦ ALONE AGAINST LOBBYISTS AND UTILITY◦ COST OF LOST LOAD < COST OF INDIVIDUAL

PARTICIPATION◦ FINDS REGULATORY PRECEPTS COMPLEX

TWO KINDS OF INFORMATIONHOW TO PARTICIPATE

◦ KNOW YOUR RIGHTS◦ KNOW THE ROLE OF THE COMMISSION◦ KNOW COMMISSION PROCESSES◦ KNOW THE PROGRAMS THAT BENEFIT YOU

INITATION TO PARTICIPATE◦ EXERCISE YOUR RIGHT◦ LET THE COMMISSION LEARN FROM YOU◦ LET THE COMMISSION HEAR FROM YOU◦ COST OF PARTICIPATION◦ TIME

◦ DON’T BE FED UP

COMMISSION’S ROLEPROTECT CONSUMERSMAINTAIN RELIABILITYMAINTAIN SAFETYKEEP RATES REASONABLEATTRACT INVESTMENT

◦INSTILL CONFIDENCE IN STAKEHOLDERSPLANNING ENSURE CONTINUITY OF ITS

POLICIES

KINDS OF INFORMATION TO BE COMMUNICATED

STATUTORY REQUIREMENT ◦ SOMETIMES SUBTLE OR AMBIGUOUS

RATEMAKING◦ POWER PROCUREMENT ◦ NEW INFRASTRUCTURE DEVELOPMENT◦ ENVIRONMENTAL QUALITY IMPACT◦ TARIFF SETTING

ADJUDICATORY ◦ PENALTIES◦ INVESTIGATIONS

QUASI-LEGISLATIVE◦ DEVELOPMENT OF STANDARDS◦ IMPLEMENTATION OF STATUTES

EFFECTIVENESS OF COMMUNICATION

COMMUNICATION IS ONLY EFFECTIVE WHEN IT ALLOWS THE RATEPAYER TO TAKE REASONABLE ACTION TO PROTECT OR FURTHER HIS INTEREST IN THE PROCEEDING AND AFFORDS HIM THE OPPORTUNITY TO DO SO

TIMELINESS CLARITY

OPPORTUNITY TO BE HEARD COST RECOVERY

EQUAL ACCESS TO DECISION MAKERS

THE REALITY IN AFRICAINFRASTRUCTURE OBSTACLES

◦LACK OF DATAACCESS BUSY SCHEDULESCUSTOMER SKEPTICISMENFORCEMENT

◦A ONE-SIDED ENFORCEMENT◦POLITICAL PRESSURES

“WHO WILL HERD THE CATS”

IS IT THE ROLE OF THE COMMISSION TO HERD THE CATS? STATUTORY MANDATE

California Public Utilities Code § 309(a) and (f)◦ [a] There is within the Commission a division to represent the interests of public

utility customers and subscribers within the jurisdiction of the Commission. The goal of the division shall be to obtain the lowest possible rate for service consistent with reliable and safe service levels. For revenue allocations and rate design matters, the division shall primarily consider the interest of residential and small commercial customers. The amendments made to the section by Chapter 440 of the Statutes of 2001 are not intended to expand the representation and responsibilities of the division.

◦ [f] There is hereby created the Public Utilities Commission Ratepayer rate Account in the General Fund. Moneys from the Public Utilities Commission Utilities Reimbursement Account in the General Fund shall be transferred in the Annual Budget Act to the Public Utilities Commission Ratepayer rate Account. The funds in the Public Utilities Commission Ratepayer rate Account shall be utilized exclusively by the division in the performance of its duties. The Commission shall annually submit a staffing report containing comparisons of the staffing levels for each five-year period.

PUBLIC POLICY DEMANDS◦ OFFICE OF ATTORNEY GENERAL

COURT ORDERS NON-GOVERNMENTAL ORGANIZATIONS

LOBBYISTS / POLITICIANS / ORGANIZED CRIME

It may not be the role of the Commission to herd the cats, where it is not proscribed by Statute, but it is always the role of the Commission to facilitate the process by which it would be done, where no other agency has undertaken the task, regardless of the

statutory proscription.

The real fear, however is not that the Commission would fail to heed the call to herd the cats, either by itself or

its own facilitation; The real fear is that eventually some unpleasant entity would … when they recognize

the power of the consumers in their numbers and purchasing power.