NARUC/NIGERIA REGULATORY PARTNERSHIP “WHO WILL HERD THE CATS?” A PRESENATION ON BEST PRACTICES FOR INFORMING CONSUMERS ABOUT DEVELOPMENTS AND RATE CHANGES BY NOEL A. OBIORA

DISCLAIMER DISCLAIMER OPINIONS EXPRESSED IN THIS PRESENTATION ARE THOSE OF THE AUTHOR AND ARE NOT INTENDED TO REFLECT THE OPINIONS OF THE CALIFORNIA PUBLIC UTILITIES COMMISSION A NOTE ON THE TITLE The title is intended to reflect the difficulty of consumers recognizing the power in their numbers and organizing themselves into a cohesive unit that fights for their protection and common interests in the regulatory compact -- By the lone nature of their survival instincts, even after they are organized, it is difficult if not impossible to keep them together going forward from issue to issue, thus a continuous effort is needed. – The title was not intended to denigrate ratepayers

KINDS OF ELECTRICITY CONSUMERS RESIDENTIAL RATEPAYERS ◦ LARGE RESIDENTIAL USERS ◦ SMALL RESIDENTIAL USERS ◦ VULNERABLE CLASS OF RESIDENTIAL USERS  MEDICAL BASELINE CUSTOMERS  SENIOR CITIZENS  LOW INCOME SMALL BUSINESSES ◦ DEFINING SMALL BUSINESS IN NIGERIA  USAGE / REVENUE STREAM  ONE OR MORE CLASSES OF SMALL BUSINESSES LARGE ENERGY CONSUMERS ◦ LARGE BUSINESSES ◦ INDUSTRIAL CUSTOMERS ◦ GOVERNMENT  FEDERAL, STATE, LOCAL GOVERNMENT OR CITIES ◦ INSTITUTIONS

THE PROBLEM “We ain’t made to survive, cause it’s a set up and even though you’re fed-up…Keep ya head up” Tupac Shakur (“Keep your head up”) THE REGULATORY COMPACT WAS SET-UP TO CHECK OR REDUCE THE OPPRESSIVE TENDENCIES OF A NATURAL MONOPOLY, NOT TO ELIMINATE IT. NOTHING CAN ELIMINATE IT … YET

THE SET UP: UTILITY vs. RESIDENTIAL RATEPAYER THE UTILITY ◦ LARGE INVESTMENT IN INFRASTRUCTURE ◦ LONG-TERM FINANCIAL INDEBTEDNESS ◦ POLITICAL AND ECONOMIC CLOUT ◦ INSIGNIFICANT COST OF PARTICIPATION ◦ EXPERT IN REGULATORY PRECEPTS THE RESIDENTIAL RATEPAYER ◦ PRIMARY INVESTMENT: HOME ◦ ALONE AGAINST LOBBYISTS AND UTILITY ◦ COST OF LOST LOAD < COST OF INDIVIDUAL PARTICIPATION ◦ FINDS REGULATORY PRECEPTS COMPLEX

TWO KINDS OF INFORMATION HOW TO PARTICIPATE ◦ KNOW YOUR RIGHTS ◦ KNOW THE ROLE OF THE COMMISSION ◦ KNOW COMMISSION PROCESSES ◦ KNOW THE PROGRAMS THAT BENEFIT YOU INITATION TO PARTICIPATE ◦ EXERCISE YOUR RIGHT ◦ LET THE COMMISSION LEARN FROM YOU ◦ LET THE COMMISSION HEAR FROM YOU ◦ COST OF PARTICIPATION ◦ TIME ◦ DON’T BE FED UP

COMMISSION’S ROLE PROTECT CONSUMERS MAINTAIN RELIABILITY MAINTAIN SAFETY KEEP RATES REASONABLE ATTRACT INVESTMENT ◦ INSTILL CONFIDENCE IN STAKEHOLDERS PLANNING ENSURE CONTINUITY OF ITS POLICIES

KINDS OF INFORMATION TO BE COMMUNICATED STATUTORY REQUIREMENT ◦ SOMETIMES SUBTLE OR AMBIGUOUS RATEMAKING ◦ POWER PROCUREMENT ◦ NEW INFRASTRUCTURE DEVELOPMENT ◦ ENVIRONMENTAL QUALITY IMPACT ◦ TARIFF SETTING ADJUDICATORY ◦ PENALTIES ◦ INVESTIGATIONS QUASI-LEGISLATIVE ◦ DEVELOPMENT OF STANDARDS ◦ IMPLEMENTATION OF STATUTES

EFFECTIVENESS OF COMMUNICATION COMMUNICATION IS ONLY EFFECTIVE WHEN IT ALLOWS THE RATEPAYER TO TAKE REASONABLE ACTION TO PROTECT OR FURTHER HIS INTEREST IN THE PROCEEDING AND AFFORDS HIM THE OPPORTUNITY TO DO SO TIMELINESS CLARITY OPPORTUNITY TO BE HEARD COST RECOVERY EQUAL ACCESS TO DECISION MAKERS

THE REALITY IN AFRICA INFRASTRUCTURE OBSTACLES ◦ LACK OF DATA ACCESS BUSY SCHEDULES CUSTOMER SKEPTICISM ENFORCEMENT ◦ A ONE-SIDED ENFORCEMENT ◦ POLITICAL PRESSURES

“WHO WILL HERD THE CATS” IS IT THE ROLE OF THE COMMISSION TO HERD THE CATS? STATUTORY MANDATE California Public Utilities Code § 309(a) and (f) ◦ [a] There is within the Commission a division to represent the interests of public utility customers and subscribers within the jurisdiction of the Commission. The goal of the division shall be to obtain the lowest possible rate for service consistent with reliable and safe service levels. For revenue allocations and rate design matters, the division shall primarily consider the interest of residential and small commercial customers. The amendments made to the section by Chapter 440 of the Statutes of 2001 are not intended to expand the representation and responsibilities of the division. ◦ [f] There is hereby created the Public Utilities Commission Ratepayer rate Account in the General Fund. Moneys from the Public Utilities Commission Utilities Reimbursement Account in the General Fund shall be transferred in the Annual Budget Act to the Public Utilities Commission Ratepayer rate Account. The funds in the Public Utilities Commission Ratepayer rate Account shall be utilized exclusively by the division in the performance of its duties. The Commission shall annually submit a staffing report containing comparisons of the staffing levels for each five-year period. PUBLIC POLICY DEMANDS ◦ OFFICE OF ATTORNEY GENERAL COURT ORDERS NON-GOVERNMENTAL ORGANIZATIONS

LOBBYISTS / POLITICIANS / ORGANIZED CRIME It may not be the role of the Commission to herd the cats, where it is not proscribed by Statute, but it is always the role of the Commission to facilitate the process by which it would be done, where no other agency has undertaken the task, regardless of the statutory proscription. The real fear, however is not that the Commission would fail to heed the call to herd the cats, either by itself or its own facilitation; The real fear is that eventually some unpleasant entity would … when they recognize the power of the consumers in their numbers and purchasing power.