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California and the West

Lobbyists for Consumers Are Underdogs in Electricity Battle


SACRAMENTO — Doug Heller is aware of their presence: the lobbyists for Edison, Dynegy, Enron, Pacific Gas & Electric and other big-energy interests. There are dozens of them; he doesn't even know how many. He passes them in hallways, sees them in hearing rooms, broods over their inscrutable faces.

"No matter where you are, what time, there are always six of them huddling," he says with a trace of hyperbole. "I'm always worried, because they're strategizing, and then you see them go off to find legislators."

The lobbyists' success--or lack of it--could have a direct bearing on how much money taxpayers will have to cough up in a restructured electrical power system that will probably replace California's chaotic experiment with deregulation.

Heller, who is only 28 and a newcomer to Capitol politics, lobbies for the other side--for the lowly consumer. He strains to keep up although, in reality, there is no keeping up. In sheer numbers, the lobbyists for the big utilities and energy producers hold an advantage over Heller and the few other consumer advocates by a margin of perhaps 10 to 1.

PG&E alone muscles in with at least nine in-house lobbyists and the services of six outside firms, including legal powerhouse O'Melveny & Myers, according to state filings.

"We've got a peashooter," Heller laments, "and they've got the keys to the armory."

In truth, the peashooter is bigger than it looks, supplemented by massive media coverage that tends to work in the underdog's favor, along with the implicit threat of an anti-utility ballot initiative. One thing's for sure: Never have the stakes--billions of dollars--been higher on a single issue.

Complexity of Crisis Not for the Novice

The fight has intensified for months as critical decisions draw near on a raft of key questions, including the possible state purchase of the utilities' 32,000-mile power grid.

The crisis is stunningly complex, both in terms of market dynamics and abstruse technology, creating the sort of dark circumstance in which lobbyists and hired experts--the line often blurs--play an unusually important role in forming the legislative vision.

"In the 21 years I've been around the Capitol, I've never seen an issue of this magnitude and complexity," said Susan McCabe, a Sacramento-based lobbyist for Reliant Energy of Houston. "If you squeeze the balloon over here, it's going to pop out over there. And a lot of these [legislators] are new. That's kind of scary."

Providing essential information, with the right spin, is an art of the lobbyist accomplished by a variety of means. Lobbyists testify at hearings. They meet privately with lawmakers and staff. They draft legislation and amendments, sometimes competing to provide the key language that may become law.

They scramble to determine which bills have a chance--and look for ways to block them, revise them or jam them through. They identify swing votes and broker deals with other interest groups. They hold impromptu news conferences. They network with their allies to shape strategies on a chessboard that changes every moment.

Under the rules of a special legislative session devoted exclusively to energy issues, normal hearing notices are waived; any day, any moment, a significant new piece of legislation may surface for debate.

No fewer than 97 energy bills were backed up in the Legislature last month--a total that climbed last week to 158. Sixty-two were pending in the Senate, 96 in the Assembly.

The docket involved matters as weighty as building power plants, overhauling energy-efficiency standards for housing, and re-regulating markets that were deregulated five years ago.

"I'm getting stretched really thin, beyond the boundaries of my knowledge and ability," said Lenny Goldberg, one of the handful of consumer lobbyists, who coordinates his defenses with Heller and six or eight other lobbyists, attorneys and nonprofit executives.

Goldberg, 55, a gray-haired, slightly rumpled Sacramento veteran, has worked 10 years for the most prominent of the nonprofit groups, the Utility Reform Network of San Francisco, which receives more than half its $1.9-million budget from a share of utility revenues under a 1984 legislative mandate.

More recently, he also began representing the San Diego-based Utility Consumers' Action Network, which also receives a share of its $700,000 budget from the utilities.

Arriving at work one recent morning in an office building overlooking downtown Sacramento, Goldberg found 87 e-mails related to energy issues. He scanned them between phone calls.

"I'm looking at bunches of e-mails on bilateral contracts, whether the large industrial customers are in or out [of the deregulated markets], and under what terms," he said. "To what extent are their costs being shifted to small consumers, and vice versa?

"There are a bunch of big issues . . . demand-reduction programs . . . transmission . . . a raft of efficiency bills that I haven't even had a chance to look at. It never seems to stop."

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