State will spend $51 million for energy consultants and ad campaign

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The Associated Press

Gov. Gray Davis will spend more than $51 million over two years on consultants to help negotiate power contracts and on an advertising campaign to educate the public about energy conservation.

The governor’s office released copies of the contracts Friday afternoon. They range from $25,000 to $40 million in cost and include contracts for legal and financial assistance.

Among those the administration has recruited are Larry Hamlin, an Edison vice president who is on a two-month leave from the utility, former Edison president Michael R. Peevey and former Edison vice president Vikram S. Budhraja.

Hamlin will be paid $165 per hour and Budhraja will earn $275 an hour through a $6.2 million contract awarded to Electric Power Group, LLC. They are involved in setting up Davis’ many energy programs, such as his recent energy conservation plan.

Electric Power Group’s contract says the company will also assist in negotiating power buys and assisting grid managers unclog the state’s transmission system.

Peevey worked for free, as did David Freeman, general manager of Los Angeles Department of Water and Power, said Steve Maviglio, Davis’ spokesman. They helped the state Department of Water Resources negotiate long-term power contracts.

“They were interested in serving the citizens of the state, and we gladly took advantage of their expertise,” Maviglio said.

The largest contract unveiled by the governor’s office was for a two-year, $40 million contract with Grey Worldwide, an advertising agency.

Consumer advocate Medea Benjamin said the consultants had too many ties to the energy industry to be objective and that there should be a “firewall between people who are advising the governor and people who are connected to the industry.”

She said the $40 million would be better spent on a grass-roots campaign through community groups who could give specific advice to people on energy conservation.

“Gov. Davis hasn’t brought anybody on board that has any sort of consumer credentials, and that certainly concerns us,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights.

Some of the other contracts include:

– $2 million to Hawkins, Delafield & Wood, a bond counsel firm with experience in utility financing and negotiating power contracts.

– $1.4 million to Deloitte & Touche Consulting Group to set up DWR as the state’s primary power buyer.

– $800,000 to Navigant Consulting for assisting the Department of Water Resources in negotiations for power buys.

– $500,000 to Richard Ferriera, the former assistant general manager at Sacramento Municipal Utility District, for helping DWR negotiate long-term contracts for power.

– $25,000 to Edward Panelli for legal advice on the lawsuit filed by the utilities against the Public Utility Commission, including his recommendations regarding possible settlements.

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