Documents Show Political Appointees Interfered With Cal. Energy Commission Study Of Hot Fuel Ripoff To Protect Oil Companies

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Consumer Group Says Government Staff’s Consumer-Oriented Findings Were Altered by Commissioners With Ties to Oil Industry
Santa Monica, CA — Public documents retrieved by Consumer Watchdog reveal that, after private meetings with oil industry representatives, some of the California Energy Commission’s politically appointed Board Members changed staff conclusions in a study of "hot fuel," in a way that protected the interest of oil companies.  In 2007, the California Legislature asked the CEC for a “cost-benefit” report on the issue of hot fuel – in which motorists get less energy per gallon of gas when fuel temperature is above 60 degrees Fahrenheit – and if consumers would benefit from gas pumps or other mechanisms that automatically compensate for the temperature of the gas.  
Newly found e-mails reveal a previously undisclosed private meeting with an oil industry economist and later exchanges with staff ordering changes to the study.  In a November 26, 2008 e-mail, Commissioner James Boyd wrote of the staff’s conclusions that automatic temperature compensation (ATC) was desirable and legal:
"Bad news, the Executive Summary is totally slanted to one conclusion. The last bullet question on Page 3 and the response thereto on Page 4 HAVE GOT TO GO. You cannot speak for the consuming public in a way that leaves no other conclusion than go with ATC….”
In addition to the revelations in the newly released documents, Consumer Watchdog points out that Commissioner James Boyd’s wife is a longtime lobbyist for the oil industry’s chief lobbying group, the Western States Petroleum Association.  Last month, Consumer Watchdog called on Commissioner Boyd to recuse himself from the hot fuel study because of this irresolvable conflict.
Click here to see the letter to Commissioner Boyd.
"Governor Schwarzenegger cannot let political appointees who are married to oil industry executives reverse the findings of government staff with expertise on these issues," said Judy Dugan of Consumer Watchdog.  "The hot fuel ripoff costs California drivers up to several cents a gallon in the heat of the summer. Consumers deserve fairness at the pump."
In a letter sent to the Energy Commission Tuesday evening, the nonprofit, nonpartisan Consumer Watchdog asked the Commission to delay a vote on the compromised study until after the public had an opportunity to review over 350 pages of public records received by Consumer Watchdog on Monday night. The letter also demands more information about the original, uncompromised staff recommendations.
In the letter, Consumer Watchdog wrote:

The newly released documents, obtained under our Public Records Act request, show that changes essentially reversing the conclusions of the CEC professional staff and steeply favoring the oil industry, were requested by Commissioner James Boyd and to a lesser extent by Commissioner Karen Douglas. These changes apparently began even before the first “staff” version was published. In all, several months of revision appear to have shifted the fuel temperature study from modestly embracing consumer benefits, including fairness, to embracing the oil industry’s rejection of any benefit from automatic temperature compensation of fuel sales. In light of Commissioner Boyd’s clear conflicts of interest in this matter, these changes appear skewed and influenced by his ties to the oil industry, including his wife’s employment as an oil lobbyist.
Click here to view a copy of Consumer Watchdog’s letter regarding the public records disclosures.

Consumer Watchdog has been fighting to require gas stations to adopt a mechanism to ensure that motorists get a fair gallon of gas when they fill up at the pump. It is estimated that California motorists lose about $400 million each year to this hot fuel ripoff.  Just as important, drivers cannot determine their best buy at adjacent stations, because the stations’ fuel temperatures vary—sometimes widely. Gas stations in Canada, where colder temperatures would give customers more energy per gallon when they fill up their tank, use temperature adjustment systems to ensure that the oil companies get fully paid for every gallon.
Click here to download key e-mails from the Public Records Act request.

Download the complete set of public records here:
Hot Fuel PRA Part 1
Hot Fuel PRA Part 2
Hot Fuel PRA Part 3

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Consumer Watchdog, formerly The Foundation for Taxpayer and Consumer Rights, is a nonpartisan, nonprofit organization.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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