Energy companies and utilities spend millions to try to sway views

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The Orange County Register

SACRAMENTO, Calif. _ Energy companies, utilities, even the state itself have put blue-chip lobbyists on the payroll at an unprecedented rate in a struggle to wield behind-the-scenes influence during California’s energy crisis.

Documents outlining the record spending _ approaching $2 million a month _ show that some of the same companies that have faced the wrath of state officials for taking large profits at the expense of Californians have invested those earnings into trying to influence those same officials.

The $11.5 million spent on lobbying by utilities and energy companies between January and July was nearly four times the amount spent during the first six months of last year and is more than utilities have ever spent on lobbying in California during any 12-month period.

Moreover, Capitol veterans say this year’s level exceeds any previous lobbyist spending on a single issue.

Southern California Edison‘s lobbying expenditures this year already are far higher than any of the perennial heavy hitters _ such as the California Teachers Association, the Association of California Insurance Companies and the Western States Petroleum Association _ for any year during the past decade.

“They (Edison executives) are fighting for the life of their company,” said lobbyist and former legislative aide Kevin Sloat, whose company’s clients include Pacific Gas & Electric Co.

But it’s not just Edison. The other major investor-owned utilities, PG&E and San Diego Gas & Electric, and power companies also have retained banks of lobbyists that include former lawmakers, top officials in state government and people with close ties to Gov. Gray Davis.

“When you deregulate energy, you just bring in a lot more players, a lot more interests,” Sloat said. “In an uncertain, deregulated world, these companies naturally need eyes and ears here.”

The lobbyists testify at legislative hearings, attend fund-raisers, wine and dine lawmakers, cultivate the governor and his administration’s top officials, analyze legislation and generally protect their clients’ interests.

“This level of spending is unprecedented, and it is indicative of the stakes that are involved here,” said James Knox, director of California Common Cause, which tracks political spending.

In at least one case, two adversaries _ the state of California and Texas-based Enron Corp. _ hired the same lobbyist, the powerful Washington, D.C., firm of Johnston and Associates, headed by former U.S. Sen. Bennett Johnston of Louisiana. Other Johnston clients include private power generator AES and the state of Oregon.

In Sacramento, Edison has spent roughly $6 million to influence lawmakers and regulators since January, double the amount it spent during the previous two years. The lion’s share of the money went for a television ad campaign to alert the public about the pitfalls of bankruptcy, and on a telephone appeal directly to Edison stockholders asking them to back a rescue plan before the Legislature. During the first six months of last year, Edison spent less than $800,000.

There are about 950 lobbyists registered now in Sacramento. Typically, lobbyists _ unlike lawyers, consultants and communications experts _ are not paid by the hour but are retained under contract at fixed rates. Average monthly contracts may run from $3,000 to $10,000 per client.

Some lobbyists are based outside California, but the most powerful are located within blocks of the Capitol and are home-grown, with strong connections to the Legislature or the administration.

The traditional Sacramento arrangement is one lobbyist, one client. But as the energy crisis has unfolded, energy companies, which already have their own in-house lobbyists, have hired multiple lobbying firms.

PG&E, with nine in-house lobbyists, has hired seven lobbying companies. Edison, with three in-house lobbyists, has hired six lobbying companies. Sempra Energy, parent of SDG&E, has eight in-house lobbyists and has retained a separate lobbying firm across the street from the Capitol. Calpine Corp., which has some $13 billion in long-term state energy contracts, has hired five lobbying firms.

“As the issues become more complex, you need more people who are skilled in certain specialties,” said Bill Highlander of Calpine, a private energy company based in San Jose. “It’s important that we have representation in Sacramento to explain our side of the issue.”

For example, one of Edison‘s lobbying firms is Robinson and Associates, headed by former Orange County Assemblyman Richard Robinson. The firm, which has billed more than $1.2 million this year, includes: Craig Brown, the former head of the Department of Finance, who specializes on finance and the bureaucracy; Rick Lehman, a former state legislator who is versed on Central Valley water and agriculture issues; and Robinson, who retains his links to Orange County.

Ideology means little in lobbying, and the top firms have a political mix. Both Robinson and Lehman were Democratic lawmakers; Brown was a top Republican bureaucrat.

Two key issues are driving the lobbying frenzy.

The first is Edison‘s proposed rescue plan _ What form will it take and how much of its debt will be covered by customers? The issue is now before the Legislature.

The second is a $12.5 billion municipal bond issue _ the largest in U.S. history _ tentatively planned for October. How will it be structured? How much bonding will actually be sold and when?

“The stakes are $50 billion worth of long-term energy contracts and the future of one of the state’s largest corporations,” said Knox of Common Cause.

To get the best access to decision-makers, lobbying firms employ political insiders.

Another of Edison‘s lobbying firms employs former state Sen. Dennis Carpenter and Kathleen Snodgrass, once an adviser to former Assembly Speaker Willie Brown. PG&E‘s hired guns include a firm headed by the chief of staff to former Gov. George Deukmejian.

These people are familiar to legislators. They have been through the political wars together, the budget fights, the election campaigns.

For consumer advocate Doug Heller, this insider game merely shuts out the public.

“Lawmakers rely on these people to inform them, and whoever has the most lobbyists has the most success,” said Heller of the Foundation for Taxpayer and Consumer Rights. “But it turns the stomach of the average citizen. On one side you have Edison saying it needs more money, and on the side they are spending millions on lobbyists.”

Robert Stern of the Center for Governmental Studies, a nonprofit research group, agreed, to a point.

“This spending is unprecedented, but there’s nothing wrong with lobbying, as long as it’s disclosed. It’s an important part of government,” Stern said. “But there’s always the problem of consumers being represented. Is anybody lobbying for them? The answer is yes, but not to the extent the big companies have.”

Consumer Watchdog
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