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Speaker 1: At the end of twenty twenty, residents in the coastal

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Speaker 1: California town of Santa Barbara were getting a bunch of

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Speaker 1: weird notifications on their phones.

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Speaker 2: These just spam texts out of nowhere that say, you know,

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Speaker 2: urgent alert, Santa Barbara City is going to ban gas

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Speaker 2: and destroy the grid and drive up energy prices. Contact

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Speaker 2: them immediately.

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Speaker 1: That's Katie Davis, who runs the local chapter of the

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Speaker 1: Sierra Club, talking to the podcast A Matter of Degrees

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Speaker 1: last year. The show is co hosted by Leah Stokes,

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Speaker 1: an energy policy expert and author of a book about

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Speaker 1: corrupt utilities called short Circuiting Policy, who we heard from

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Speaker 1: last episode. Stokes also happens to be a p professor

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Speaker 1: at University of California, Santa Barbara and lives in town.

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Speaker 1: When these robocalls and texts about a proposed gas band

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Speaker 1: for new buildings in Santa Barbara started to make the rounds,

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Speaker 1: Stokes and Davis got in touch. Here they are talking

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Speaker 1: about it on a Matter of Degrees.

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Speaker 3: One thing Katie and I both noticed is that the

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Speaker 3: first round of text messages were totally anonymous.

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Speaker 1: There was nothing saying this is from such and such group.

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Speaker 1: It was really sketchy.

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Speaker 2: They seemed to have hit everyone in Santa Barbara because

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Speaker 2: a lot of people we know got them, even the

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Speaker 2: city council members got them. A lot of people were

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Speaker 2: misinformed by it.

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Speaker 4: It was really misleading.

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Speaker 1: The text messages directed recipients to go to the website

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Speaker 1: of something called Californians for Balanced Energy Solutions or C

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Speaker 1: four bees, where they could write to the Santa Barbara

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Speaker 1: City Council to oppose the measure. Mike Campbell wanted to

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Speaker 1: know exactly who was behind this effort.

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Speaker 5: I'm a program manager at the Public of the KITS Office.

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Speaker 1: That's an office inside the California Public Utilities Commission, which

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Speaker 1: is the state agency that regulates privately owned public utilities.

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Speaker 1: I know that sounds weird, but yes, it's a thing.

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Speaker 1: Campbell's office keeps an eye out for predatory behavior and

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Speaker 1: makes sure that utilities are treating their customers fairly. At

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Speaker 1: the time, Campbell was already investigating the gas utility in

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Speaker 1: Santa Barbara, so cal Gas.

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Speaker 5: We have been looking at so Cal Gas's activities as

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Speaker 5: it relates to their efforts to undermine impede thwart. Choose

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Speaker 5: your synonym California's GHG goals, that's the state's greenhouse gas

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Speaker 5: reduction goals, particularly as it relates to their interest in

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Speaker 5: maintaining a high level of gas usage and making sure

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Speaker 5: that the number of gas customers continues to grow.

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Speaker 1: Campbell discovered how so Cal Gas was going about trying

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Speaker 1: to undermine new policy efforts that would reduce reliance on gas,

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Speaker 1: and he realized that not only had the utility been

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Speaker 1: marketing and lobbying against measures that would reduce the amount

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Speaker 1: of gas they could sell.

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Speaker 4: They have been trying to have their customers pay for it.

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Speaker 1: By it there, he means the lobbying and marketing so

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Speaker 1: Cal Gas's customers were footing at least part of the

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Speaker 1: bill for these efforts.

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Speaker 5: And they have also worked to try to obscure some

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Speaker 5: of the lobbying efforts they have had by creating front

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Speaker 5: groups and not being transparent about entities that they hire

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Speaker 5: to speak on their behalf.

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Speaker 1: Californians for Balanced Energy Solutions the group that was texting

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Speaker 1: Santa Barbara residents about a proposed gas found there was

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Speaker 1: just such a group, and the chair of the group

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Speaker 1: at the time was a guy you might remember from

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Speaker 1: episode one, Eric Hoffman. He was the one who sent

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Speaker 1: San Luis Obispo Mayor Heidi Harmon that email threatening a

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Speaker 1: COVID super spreader event if the city council went forward

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Speaker 1: with its vote on a gas band.

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Speaker 6: So as we started to get momentum in building electrification,

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Speaker 6: this group emerged. It was probably early twenty nineteen, called

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Speaker 6: Californias for Balanced Energy Solutions.

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Speaker 1: Matt Vespa is an attorney with Earth Justice. This is

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Speaker 1: him talking on the podcast A Matter of Degrees.

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Speaker 6: It had a glossy website. It was just very professional.

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Speaker 6: It had a number of members, you know, sort of

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Speaker 6: coalition partners. It wasn't really clear who was really behind this.

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Speaker 6: From the website, it was clearly of some kind of

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Speaker 6: front group. It was just like so high budget and

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Speaker 6: so polished. It was just not something that was remote

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Speaker 6: aggress roots obviously, and I think it just kind of

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Speaker 6: came out of nowhere. And also like what does a

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Speaker 6: Californian for Balanced Energy what does that even mean? You know,

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Speaker 6: it's just such a clearly front group.

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Speaker 1: Name, and it's illegal activity included way more than just

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Speaker 1: those unwanted text messages in Santa Barbara. That's the story

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Speaker 1: we're going to get into In today episode Welcome Back

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Speaker 1: to Drill, Season six, Part two, The New Climate Villains.

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Speaker 1: I'm Amy Westervelt Today anatomy of a front group that

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Speaker 1: story coming up after this quick break.

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Speaker 4: There's two time periods.

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Speaker 5: One is where they're violating the Commission's policies, undermining codes

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Speaker 5: and standards.

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Speaker 1: This is Mike Campbell again with the California Public Utilities

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Speaker 1: Commission's Public Advocates Office. He says to understand the full

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Speaker 1: context around Californians for balanced energy solutions C four bees,

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Speaker 1: you have to see it as part of a pattern

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Speaker 1: of SOCAW gas breaking rules, which according to King, goes

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Speaker 1: back a few years back before the Electrify Everything movement

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Speaker 1: really took hold and gas bands started to sweep the state.

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Speaker 1: That history starts with so called gases participation in a

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Speaker 1: state and federal energy efficiency program. The program allows utilities

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Speaker 1: to use money from their customers to help promote stricter

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Speaker 1: energy efficiency codes and standards for buildings and appliances.

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Speaker 5: So you know, to make your hot water heater use

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Speaker 5: less gas, to make your furnace use less gas, and

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Speaker 5: your dishwasher what have you? And we in looking at

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Speaker 5: socol gases and other utility applications where they were seeking

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Speaker 5: the commissions approval for their various energy efficiency activities.

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Speaker 4: We uncovered evidence that socol.

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Speaker 5: Gas was taking the customer's money, but then they were

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Speaker 5: spending it to actually not promote stronger cosy standards.

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Speaker 4: They were doing the opposite.

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Speaker 1: In other words, so cal Gas was using a program

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Speaker 1: that was supposed to allow utilities to basically charge their

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Speaker 1: customers for various efforts that would improve energy efficiency, and

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Speaker 1: instead used it to fund efforts working against energy efficiency.

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Speaker 1: Campbell's office compiled evidence of this and presented it to

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Speaker 1: the California Public Utilities Commission in a hearing in twenty eighteen.

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Speaker 1: The commission found the evidence compelling and barred SoCal Gas

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Speaker 1: from participating in the energy efficiency program. This was a

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Speaker 1: year before the first gas band in the country was

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Speaker 1: passed in Berkeley, and almost two years before the first

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Speaker 1: gas band was proposed in so cal Gas's territory. That

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Speaker 1: measure in San Luis Obispo that we talked about in

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Speaker 1: episode one. Campbell says that even though they got this

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Speaker 1: official sanction, so cal Gas kept misleading customers and the

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Speaker 1: Public Utilities Commission on Energy efficiency. According to him, not

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Speaker 1: only was SOCl Gas ignoring the Commission's rules. The utility

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Speaker 1: was also lying to the Public Advocate's office and hiding data.

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Speaker 5: The utility trying to mislead or fly or hide data

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Speaker 5: or information from the regulator is a violation of the

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Speaker 5: Commission's Rule one point one.

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Speaker 4: It's rule one for a reason.

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Speaker 5: It's pretty important and pretty basic for being a regulated utility.

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Speaker 1: And that behavior rolled right on into the utility's fight

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Speaker 1: against electrification. So Cal Gas was threatened by a wave

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Speaker 1: of gas bands proposed in its territory, and let's be

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Speaker 1: real here, these bands are a threat. While some territories

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Speaker 1: have utilities that combine electricity and gas, making them less

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Speaker 1: likely to protest electrification, that's not the case in southern California.

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Speaker 1: So Cal Gas, as its name suggests, only deals in gas.

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Speaker 1: It's actually the country's largest gas utility with more than

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Speaker 1: twenty million customers, and residential gas use is where most

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Speaker 1: gas utilities make money. It represents about eighty five percent

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Speaker 1: of revenue for the average gas utility. Gas Bands only

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Speaker 1: cover new buildings, so it's not a significant part of

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Speaker 1: a utilities business, but they do represent a turn away

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Speaker 1: from residential gas use that equates to a major reduction

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Speaker 1: in eventual revenue for utilities like SoCal Gas. Lea Stokes

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Speaker 1: has spent her career tracking the role of utilities in

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Speaker 1: shaping policy and particularly blocking climate policy, but it was

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Speaker 1: a new experience to see it right up close in

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Speaker 1: her own town. Here she is describing it on her

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Speaker 1: podcast A matter of degrees. They've shared the audio from

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Speaker 1: their utility episode with us, and we'll be dropping that

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Speaker 1: whole episode into our feed for you to listen to

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Speaker 1: as well, because it's really great and it goes in

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Speaker 1: directions that we will ne If you live in.

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Speaker 3: Southern California like I do, and you have gas in

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Speaker 3: your home, which I currently do until I get my

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Speaker 3: permits to remove the gas from my home, you are

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Speaker 3: a captured customer of so Cow Gas. You have to

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Speaker 3: pay them money.

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Speaker 1: They're a monopoly utility. And then in January twenty twenty one,

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Speaker 1: the Santa Barbara City Council was ready to vote on

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Speaker 1: a policy that would shake that monopoly stronghold. The measure

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Speaker 1: we discussed at the beginning of this episode, which would

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Speaker 1: mandate that new buildings had to be connected to electricity,

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Speaker 1: not gas.

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Speaker 4: MSS Clerk, if you would read into the record.

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Speaker 1: S Madam Mayor, already there we go, Item eight Energy

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Speaker 1: Code amendments for new buildings. After the presentation of the policy,

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Speaker 1: the City Council opened up the meeting for public comment.

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Speaker 1: And you probably won't be surprised at who spoke up

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Speaker 1: in opposition.

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Speaker 6: Can you hear me?

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Speaker 1: Yes?

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Speaker 7: Thank you, Tim Mahoney. Socow Gas and we are a

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Speaker 7: long term energy provider in Santa Barbara, committed to working

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Speaker 7: with the city and other groups to achieve the goals

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Speaker 7: of reduced emissions and create a more sustainable city.

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Speaker 1: Yep, so cow Gas with a seemingly green argument.

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Speaker 7: Let me highlight just a few important points. To successfully

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Speaker 7: achieve carbon neutrality, we need carbon neutral fuels and gas

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Speaker 7: infrastructure to deliver those fuels. So so col Gas is

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Speaker 7: an industry leader in increasing the flow of renewable gases

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Speaker 7: that can be delivered via the existing gas infrastructure.

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Speaker 1: There's that renewable natural gas plan. Again, we've discussed this

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Speaker 1: in previous episodes, but here's Charlie Spats from the Energy

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Speaker 1: Policy Institute with a quick refresher.

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Speaker 8: Renewable natural gas. It's a brilliant marketing term that the

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Speaker 8: gas industry has created, and essentially they're referring to biomethane.

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Speaker 1: The capture of methane from landfills, sewage plants, or agricultural

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Speaker 1: feed lots. Renewable natural gas is not really a viable

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Speaker 1: way to achieve decarbonization because it could only ever supply

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Speaker 1: at most about sixteen percent of the current demand for gas,

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Speaker 1: but Spat says the gas industry is using the idea

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Speaker 1: to try to lock in gas infrastructure.

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Speaker 8: They are looking to provide their own solutions, which essentially

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Speaker 8: mean continuing to use natural gas indefinitely. That's where we

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Speaker 8: hear the term renewable natural gas come up.

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Speaker 1: Now back to Santa Barbara City Council, where sokel Gas is.

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Speaker 1: Local pr guide Tim Mahoney was selling renewable gas in

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Speaker 1: an effort to tank the city's proposed gas band.

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Speaker 7: Now, renewable natural gas is currently the only negative carbon fuel,

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Speaker 7: and experts agree it is needed to decarbonizized buildings.

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Speaker 1: The council was not swayed by the renewable natural gas

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Speaker 1: pitch and voted unanimously in favor of the gas band

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Speaker 1: that night, but they'd have to vote again in July

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Speaker 1: to make it stick, which was plenty of time for

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Speaker 1: that scrappy fake citizens group Californians for Balanced Energy Solutions,

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Speaker 1: or C four BES to do its thing. Despite the

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Speaker 1: group's efforts, though, on July twenty seventh, twenty twenty one,

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Speaker 1: Santa Barbara officially passed the ban on gas in new buildings.

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Speaker 1: But the California Public Utilities Commission was just starting to

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Speaker 1: look into what had happened in Santa Barbara and what

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Speaker 1: so called gas was doing to oppose gas bands in general,

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Speaker 1: beyond just text messages and hokey ads. The Commission held

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Speaker 1: another hearing, this one about building decarbonization and how utilities

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Speaker 1: were handling it. Here's Mike Campbell again.

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Speaker 5: In the building decarbonization proceeding. There are various parties in

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Speaker 5: the preceding We were a party, so cal Gas was

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Speaker 5: a part, Utilities were party, and then this new organization

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Speaker 5: out of nowhere, the C four BS asked the Commission

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Speaker 5: for the right to become a party, and so Sierra

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Speaker 5: Club alleged that C four BS was not an independent party,

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Speaker 5: they were a front group for so cal Gas.

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Speaker 4: We thought that was a pretty serious allegation.

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Speaker 1: According to Campbell. So cal Gas, however, was not forthcoming

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Speaker 1: with data and information, at least initially.

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Speaker 4: Well, we kept digging and low and bullhold.

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Speaker 5: Not only was so cal Gas paying for the creation

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Speaker 5: of C four bes and was instrumental in pretty much

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Speaker 5: every aspect of its operation.

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Speaker 1: Campbell's team also figured out who was really footing the

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Speaker 1: bill for C four bees. It turns out so cal

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Speaker 1: Gas had taken some pretty unusual steps.

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Speaker 5: They had charged the costs for that to customer funded accoun.

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Speaker 1: It was so called Gas's customers unwittingly funding a.

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Speaker 4: Front group, and that is not a small thing.

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Speaker 5: It's very clear in Commission rules that utilities may not

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Speaker 5: charge their customers for lobbying, and lobbying.

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Speaker 4: Is different than educating.

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Speaker 5: SoCal Gas has tried to pretend that this was a

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Speaker 5: gray area and they were just engaged in education.

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Speaker 1: Campbell's office investigated further to try to figure out exactly

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Speaker 1: what sokel Gas was charging customers for. When I spoke

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Speaker 1: with him back in twenty twenty one, the Commission had

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Speaker 1: just affirmed his office's broad discovery rights, meaning they could

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Speaker 1: request all sorts of documentation from so cal Gas. Though

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Speaker 1: SoCal Gas had tried to argue it didn't have to

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Speaker 1: cooperate with the investigation because of First Amendment rights and

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Speaker 1: attorney client privilege. The Commission struck that argument down. Then,

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Speaker 1: in March twenty twenty two, the California Public Utilities Can

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Speaker 1: ruled in the first complaint against socaugas the one where

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Speaker 1: they were cheating on the energy efficiency program. The judge

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Speaker 1: slapped them with a fine of almost ten million dollars

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Speaker 1: for that, which seems like a lot, but Campbell's office

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Speaker 1: initially recommended a fine of two hundred and fifty five million.

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Speaker 1: SOCU Gas did not respond to requests to speak with

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Speaker 1: us for this podcast, but in the wake of this

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Speaker 1: initial CPUC ruling, it did release a public statement saying, quote,

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Speaker 1: we hear and respect the Administrative Law judges decision on

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Speaker 1: this issue. Over the last two years, and in response

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Speaker 1: to this proceeding, we have enhanced our companies accounting and

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Speaker 1: oversight practices. We look forward to working with the CPUC

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Speaker 1: and staff on how to strengthen these efforts. Under new leadership,

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Speaker 1: Socalgas is focused on a business strategy that is sustainable

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Speaker 1: and aligned with California reaching its climate and clean air

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Speaker 1: goals more quickly and more equitably. The fact that it's

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Speaker 1: undernew leadership is interesting, especially as the utility waits for

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Speaker 1: a CPUC decision about its use of customer money to

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Speaker 1: fund a front group. That's it for this time. We'll

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Speaker 1: keep you posted on any decisions in that So Cal

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Speaker 1: Gas case next time. Another story of the gas industry

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Speaker 1: invading local politics in Southern California.

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Speaker 8: There was you know, a variety of front group activity,

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Speaker 8: likely associated with the Southern California Gas Company, to bring

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Speaker 8: a variety of different spokespeople, paid spokespeople, or essentially people

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Speaker 8: off the street to you know, Parie a message that

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Speaker 8: was oppositional to electrification.

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Speaker 2: They found the jobs through indeed dot com and they

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Speaker 2: were actually advertised as environmental fellowships.

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Speaker 1: Drilled is an original Critical Frequency production. Our producer is

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Speaker 1: Jules Bradley. Our editor of this season is Jude Joffy

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00:18:05,440 --> 00:18:11,520
Speaker 1: Block sound design, mixing, mastering and original music throughout this episode,

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Speaker 1: including our new theme song by Peter Duff, fact checking

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Speaker 1: by weed an Yan. Our First Amendment attorney is James

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Speaker 1: Wheaton of the First Amendment Project. Our artwork is by

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Speaker 1: Matt Fleming, and of course the show is reported and

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00:18:24,880 --> 00:18:28,160
Speaker 1: written by me Amy Westervelt. If you'd like to support

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Speaker 1: next time. Contended for fatted fl