California Consumer Groups Dispute ‘Hot Fuel’ Report

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Two consumer rights groups in California are claiming that the lead energy commissioner involved in a gasoline "hot fuel" study has a conflict of interest because his wife serves in an executive position with the Western States Petroleum Association (WSPA).

As a result, the two groups contend that the findings of the California Energy Commission report, on whether to mandate standards for automatic temperature compensation (ATC) for California’s retail gasoline stations, were made to support the viewpoints of the oil industry (see OW 12/15/2008).

One of the groups, Consumer Watchdog, sent a letter to Commissioner James Boyd on Feb. 9 about his potential conflict of interest, and on Feb. 24, Consumer Watchdog and Public Citizen filed a request for public records of the California Energy Commission, seeking correspondence between energy commission staff and Commissioner Boyd.

Commissioner Boyd is vice chair of the transportation committee for the California Energy Commission. His committee was charged to prepare the report.

His wife, Catherine Reheis-Boyd, is WSPA’s chief operating officer.

"The public should know what communications Commissioner Boyd has had with the Energy Commission’s professional staff on the fuel temperature report since he became involved in mid-2008," said Consumer Watchdog’s research director Judy Dugan.

"The report has substantially skewed toward the view of the oil industry lobbyists who have been working the issue for months. Many of the companies pushing hardest to stop reform are members of the Western States Petroleum Association, the employer of Commissioner Boyd’s spouse. Her sudden resignation of her formal lobbying role [on Feb. 9, according to Dugan] is just evidence of the inherent legal conflict in her job."

Consumer Watchdog disagreed with the report’s conclusion, which was that mandating that California retail gasoline stations be retrofitted with ATC dispensers to compensate for "hot fuel" resulted in negative or a net cost to society under all the options examined.

According to the California Energy Commission report’s executive summary: "If the only criterion for assessing the merit of mandatory ATC installation for use at California retail stations is a net benefit to customers, the Transportation Committee (Committee) of the California Energy Commission concludes ATCs should not be required since the results of the cost-benefit analysis show a net cost for consumers."

But Dugan objected to the report’s final recommendations: "Without temperature compensating pumps, drivers have no way to know the temperature of the fuel they are buying. They have no way to determine whether one gas station’s posted price is actually better than another station’s posted price, [because] fuel temperature can vary widely between nearby stations."

She later continued, "The report must be reconsidered before submission to the legislature. Any input on its content by Commissioner Boyd should be disregarded. At the very least, the report must reflect variances of even economists’ opinion on whether and how much consumers would save from temperature compensation of fuel. And it must regard transparency and fairness in economic transactions as a fundamental consumer protection, not a mere ‘public perception.’"

The California Energy Commission, which was set to vote on the final report of the fuel delivery temperature study, rescheduled the vote to Mar. 11, after already rescheduling the original Feb. 11 vote to Feb. 25.

Consumer Watchdog
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