WEBVTT - S6, Part2 | Ep3: Anatomy of a Front Group

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<v Speaker 1>At the end of twenty twenty, residents in the coastal

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<v Speaker 1>California town of Santa Barbara were getting a bunch of

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<v Speaker 1>weird notifications on their phones.

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<v Speaker 2>These just spam texts out of nowhere that say, you know,

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<v Speaker 2>urgent alert, Santa Barbara City is going to ban gas

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<v Speaker 2>and destroy the grid and drive up energy prices. Contact

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<v Speaker 2>them immediately.

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<v Speaker 1>That's Katie Davis, who runs the local chapter of the

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<v Speaker 1>Sierra Club, talking to the podcast A Matter of Degrees

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<v Speaker 1>last year. The show is co hosted by Leah Stokes,

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<v Speaker 1>an energy policy expert and author of a book about

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<v Speaker 1>corrupt utilities called short Circuiting Policy, who we heard from

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<v Speaker 1>last episode. Stokes also happens to be a p professor

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<v Speaker 1>at University of California, Santa Barbara and lives in town.

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<v Speaker 1>When these robocalls and texts about a proposed gas band

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<v Speaker 1>for new buildings in Santa Barbara started to make the rounds,

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<v Speaker 1>Stokes and Davis got in touch. Here they are talking

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<v Speaker 1>about it on a Matter of Degrees.

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<v Speaker 3>One thing Katie and I both noticed is that the

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<v Speaker 3>first round of text messages were totally anonymous.

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<v Speaker 1>There was nothing saying this is from such and such group.

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<v Speaker 1>It was really sketchy.

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<v Speaker 2>They seemed to have hit everyone in Santa Barbara because

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<v Speaker 2>a lot of people we know got them, even the

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<v Speaker 2>city council members got them. A lot of people were

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<v Speaker 2>misinformed by it.

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<v Speaker 4>It was really misleading.

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<v Speaker 1>The text messages directed recipients to go to the website

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<v Speaker 1>of something called Californians for Balanced Energy Solutions or C

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<v Speaker 1>four bees, where they could write to the Santa Barbara

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<v Speaker 1>City Council to oppose the measure. Mike Campbell wanted to

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<v Speaker 1>know exactly who was behind this effort.

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<v Speaker 5>I'm a program manager at the Public of the KITS Office.

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<v Speaker 1>That's an office inside the California Public Utilities Commission, which

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<v Speaker 1>is the state agency that regulates privately owned public utilities.

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

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<v Speaker 1>Campbell's office keeps an eye out for predatory behavior and

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<v Speaker 1>makes sure that utilities are treating their customers fairly. At

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<v Speaker 1>the time, Campbell was already investigating the gas utility in

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<v Speaker 1>Santa Barbara, so cal Gas.

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<v Speaker 5>We have been looking at so Cal Gas's activities as

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<v Speaker 5>it relates to their efforts to undermine impede thwart. Choose

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<v Speaker 5>your synonym California's GHG goals, that's the state's greenhouse gas

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<v Speaker 5>reduction goals, particularly as it relates to their interest in

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<v Speaker 5>maintaining a high level of gas usage and making sure

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<v Speaker 5>that the number of gas customers continues to grow.

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<v Speaker 1>Campbell discovered how so Cal Gas was going about trying

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<v Speaker 1>to undermine new policy efforts that would reduce reliance on gas,

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<v Speaker 1>and he realized that not only had the utility been

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<v Speaker 1>marketing and lobbying against measures that would reduce the amount

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<v Speaker 1>of gas they could sell.

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<v Speaker 4>They have been trying to have their customers pay for it.

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<v Speaker 1>By it there, he means the lobbying and marketing so

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<v Speaker 1>Cal Gas's customers were footing at least part of the

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<v Speaker 1>bill for these efforts.

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<v Speaker 5>And they have also worked to try to obscure some

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<v Speaker 5>of the lobbying efforts they have had by creating front

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<v Speaker 5>groups and not being transparent about entities that they hire

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<v Speaker 5>to speak on their behalf.

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<v Speaker 1>Californians for Balanced Energy Solutions the group that was texting

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<v Speaker 1>Santa Barbara residents about a proposed gas found there was

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<v Speaker 1>just such a group, and the chair of the group

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<v Speaker 1>at the time was a guy you might remember from

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<v Speaker 1>episode one, Eric Hoffman. He was the one who sent

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<v Speaker 1>San Luis Obispo Mayor Heidi Harmon that email threatening a

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<v Speaker 1>COVID super spreader event if the city council went forward

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<v Speaker 1>with its vote on a gas band.

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<v Speaker 6>So as we started to get momentum in building electrification,

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<v Speaker 6>this group emerged. It was probably early twenty nineteen, called

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<v Speaker 6>Californias for Balanced Energy Solutions.

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<v Speaker 1>Matt Vespa is an attorney with Earth Justice. This is

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<v Speaker 1>him talking on the podcast A Matter of Degrees.

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<v Speaker 6>It had a glossy website. It was just very professional.

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<v Speaker 6>It had a number of members, you know, sort of

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<v Speaker 6>coalition partners. It wasn't really clear who was really behind this.

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<v Speaker 6>From the website, it was clearly of some kind of

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<v Speaker 6>front group. It was just like so high budget and

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<v Speaker 6>so polished. It was just not something that was remote

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<v Speaker 6>aggress roots obviously, and I think it just kind of

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<v Speaker 6>came out of nowhere. And also like what does a

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<v Speaker 6>Californian for Balanced Energy what does that even mean? You know,

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<v Speaker 6>it's just such a clearly front group.

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<v Speaker 1>Name, and it's illegal activity included way more than just

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<v Speaker 1>those unwanted text messages in Santa Barbara. That's the story

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<v Speaker 1>we're going to get into In today episode Welcome Back

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<v Speaker 1>to Drill, Season six, Part two, The New Climate Villains.

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<v Speaker 1>I'm Amy Westervelt Today anatomy of a front group that

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<v Speaker 1>story coming up after this quick break.

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<v Speaker 4>There's two time periods.

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

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<v Speaker 5>and standards.

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<v Speaker 1>This is Mike Campbell again with the California Public Utilities

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<v Speaker 1>Commission's Public Advocates Office. He says to understand the full

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<v Speaker 1>context around Californians for balanced energy solutions C four bees,

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<v Speaker 1>you have to see it as part of a pattern

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<v Speaker 1>of SOCAW gas breaking rules, which according to King, goes

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<v Speaker 1>back a few years back before the Electrify Everything movement

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<v Speaker 1>really took hold and gas bands started to sweep the state.

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<v Speaker 1>That history starts with so called gases participation in a

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<v Speaker 1>state and federal energy efficiency program. The program allows utilities

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<v Speaker 1>to use money from their customers to help promote stricter

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<v Speaker 1>energy efficiency codes and standards for buildings and appliances.

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<v Speaker 5>So you know, to make your hot water heater use

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<v Speaker 5>less gas, to make your furnace use less gas, and

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<v Speaker 5>your dishwasher what have you? And we in looking at

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<v Speaker 5>socol gases and other utility applications where they were seeking

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<v Speaker 5>the commissions approval for their various energy efficiency activities.

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<v Speaker 4>We uncovered evidence that socol.

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<v Speaker 5>Gas was taking the customer's money, but then they were

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<v Speaker 5>spending it to actually not promote stronger cosy standards.

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<v Speaker 4>They were doing the opposite.

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<v Speaker 1>In other words, so cal Gas was using a program

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<v Speaker 1>that was supposed to allow utilities to basically charge their

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<v Speaker 1>customers for various efforts that would improve energy efficiency, and

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<v Speaker 1>instead used it to fund efforts working against energy efficiency.

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<v Speaker 1>Campbell's office compiled evidence of this and presented it to

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<v Speaker 1>the California Public Utilities Commission in a hearing in twenty eighteen.

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<v Speaker 1>The commission found the evidence compelling and barred SoCal Gas

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<v Speaker 1>from participating in the energy efficiency program. This was a

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<v Speaker 1>year before the first gas band in the country was

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<v Speaker 1>passed in Berkeley, and almost two years before the first

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<v Speaker 1>gas band was proposed in so cal Gas's territory. That

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<v Speaker 1>measure in San Luis Obispo that we talked about in

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<v Speaker 1>episode one. Campbell says that even though they got this

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<v Speaker 1>official sanction, so cal Gas kept misleading customers and the

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<v Speaker 1>Public Utilities Commission on Energy efficiency. According to him, not

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<v Speaker 1>only was SOCl Gas ignoring the Commission's rules. The utility

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

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<v Speaker 5>The utility trying to mislead or fly or hide data

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<v Speaker 5>or information from the regulator is a violation of the

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<v Speaker 5>Commission's Rule one point one.

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<v Speaker 4>It's rule one for a reason.

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<v Speaker 5>It's pretty important and pretty basic for being a regulated utility.

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<v Speaker 1>And that behavior rolled right on into the utility's fight

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<v Speaker 1>against electrification. So Cal Gas was threatened by a wave

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<v Speaker 1>of gas bands proposed in its territory, and let's be

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<v Speaker 1>real here, these bands are a threat. While some territories

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<v Speaker 1>have utilities that combine electricity and gas, making them less

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

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<v Speaker 1>So Cal Gas, as its name suggests, only deals in gas.

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<v Speaker 1>It's actually the country's largest gas utility with more than

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<v Speaker 1>twenty million customers, and residential gas use is where most

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<v Speaker 1>gas utilities make money. It represents about eighty five percent

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<v Speaker 1>of revenue for the average gas utility. Gas Bands only

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<v Speaker 1>cover new buildings, so it's not a significant part of

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<v Speaker 1>a utilities business, but they do represent a turn away

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<v Speaker 1>from residential gas use that equates to a major reduction

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<v Speaker 1>in eventual revenue for utilities like SoCal Gas. Lea Stokes

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<v Speaker 1>has spent her career tracking the role of utilities in

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<v Speaker 1>shaping policy and particularly blocking climate policy, but it was

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<v Speaker 1>a new experience to see it right up close in

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<v Speaker 1>her own town. Here she is describing it on her

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<v Speaker 1>podcast A matter of degrees. They've shared the audio from

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<v Speaker 1>their utility episode with us, and we'll be dropping that

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<v Speaker 1>whole episode into our feed for you to listen to

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<v Speaker 1>as well, because it's really great and it goes in

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<v Speaker 1>directions that we will ne If you live in.

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<v Speaker 3>Southern California like I do, and you have gas in

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<v Speaker 3>your home, which I currently do until I get my

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<v Speaker 3>permits to remove the gas from my home, you are

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<v Speaker 3>a captured customer of so Cow Gas. You have to

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<v Speaker 3>pay them money.

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

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<v Speaker 1>the Santa Barbara City Council was ready to vote on

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<v Speaker 1>a policy that would shake that monopoly stronghold. The measure

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<v Speaker 1>we discussed at the beginning of this episode, which would

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<v Speaker 1>mandate that new buildings had to be connected to electricity,

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<v Speaker 1>not gas.

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<v Speaker 4>MSS Clerk, if you would read into the record.

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<v Speaker 1>S Madam Mayor, already there we go, Item eight Energy

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<v Speaker 1>Code amendments for new buildings. After the presentation of the policy,

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<v Speaker 1>the City Council opened up the meeting for public comment.

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<v Speaker 1>And you probably won't be surprised at who spoke up

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<v Speaker 1>in opposition.

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<v Speaker 6>Can you hear me?

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<v Speaker 1>Yes?

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<v Speaker 7>Thank you, Tim Mahoney. Socow Gas and we are a

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<v Speaker 7>long term energy provider in Santa Barbara, committed to working

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<v Speaker 7>with the city and other groups to achieve the goals

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<v Speaker 7>of reduced emissions and create a more sustainable city.

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<v Speaker 1>Yep, so cow Gas with a seemingly green argument.

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<v Speaker 7>Let me highlight just a few important points. To successfully

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<v Speaker 7>achieve carbon neutrality, we need carbon neutral fuels and gas

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<v Speaker 7>infrastructure to deliver those fuels. So so col Gas is

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<v Speaker 7>an industry leader in increasing the flow of renewable gases

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<v Speaker 7>that can be delivered via the existing gas infrastructure.

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

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<v Speaker 1>in previous episodes, but here's Charlie Spats from the Energy

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<v Speaker 1>Policy Institute with a quick refresher.

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<v Speaker 8>Renewable natural gas. It's a brilliant marketing term that the

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

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<v Speaker 1>The capture of methane from landfills, sewage plants, or agricultural

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<v Speaker 1>feed lots. Renewable natural gas is not really a viable

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<v Speaker 1>way to achieve decarbonization because it could only ever supply

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<v Speaker 1>at most about sixteen percent of the current demand for gas,

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<v Speaker 1>but Spat says the gas industry is using the idea

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<v Speaker 1>to try to lock in gas infrastructure.

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<v Speaker 8>They are looking to provide their own solutions, which essentially

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<v Speaker 8>mean continuing to use natural gas indefinitely. That's where we

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<v Speaker 8>hear the term renewable natural gas come up.

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<v Speaker 1>Now back to Santa Barbara City Council, where sokel Gas is.

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<v Speaker 1>Local pr guide Tim Mahoney was selling renewable gas in

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<v Speaker 1>an effort to tank the city's proposed gas band.

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<v Speaker 7>Now, renewable natural gas is currently the only negative carbon fuel,

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<v Speaker 7>and experts agree it is needed to decarbonizized buildings.

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<v Speaker 1>The council was not swayed by the renewable natural gas

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<v Speaker 1>pitch and voted unanimously in favor of the gas band

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<v Speaker 1>that night, but they'd have to vote again in July

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<v Speaker 1>to make it stick, which was plenty of time for

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<v Speaker 1>that scrappy fake citizens group Californians for Balanced Energy Solutions,

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<v Speaker 1>or C four BES to do its thing. Despite the

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<v Speaker 1>group's efforts, though, on July twenty seventh, twenty twenty one,

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<v Speaker 1>Santa Barbara officially passed the ban on gas in new buildings.

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<v Speaker 1>But the California Public Utilities Commission was just starting to

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<v Speaker 1>look into what had happened in Santa Barbara and what

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<v Speaker 1>so called gas was doing to oppose gas bands in general,

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<v Speaker 1>beyond just text messages and hokey ads. The Commission held

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<v Speaker 1>another hearing, this one about building decarbonization and how utilities

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<v Speaker 1>were handling it. Here's Mike Campbell again.

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<v Speaker 5>In the building decarbonization proceeding. There are various parties in

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<v Speaker 5>the preceding We were a party, so cal Gas was

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<v Speaker 5>a part, Utilities were party, and then this new organization

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<v Speaker 5>out of nowhere, the C four BS asked the Commission

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<v Speaker 5>for the right to become a party, and so Sierra

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<v Speaker 5>Club alleged that C four BS was not an independent party,

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<v Speaker 5>they were a front group for so cal Gas.

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<v Speaker 4>We thought that was a pretty serious allegation.

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<v Speaker 1>According to Campbell. So cal Gas, however, was not forthcoming

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<v Speaker 1>with data and information, at least initially.

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<v Speaker 4>Well, we kept digging and low and bullhold.

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<v Speaker 5>Not only was so cal Gas paying for the creation

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<v Speaker 5>of C four bes and was instrumental in pretty much

0:14:42.880 --> 0:14:44.720
<v Speaker 5>every aspect of its operation.

0:14:45.200 --> 0:14:48.360
<v Speaker 1>Campbell's team also figured out who was really footing the

0:14:48.400 --> 0:14:52.800
<v Speaker 1>bill for C four bees. It turns out so cal

0:14:52.880 --> 0:14:56.080
<v Speaker 1>Gas had taken some pretty unusual steps.

0:14:56.560 --> 0:15:00.320
<v Speaker 5>They had charged the costs for that to customer funded accoun.

0:15:00.600 --> 0:15:04.680
<v Speaker 1>It was so called Gas's customers unwittingly funding a.

0:15:04.680 --> 0:15:07.240
<v Speaker 4>Front group, and that is not a small thing.

0:15:08.000 --> 0:15:12.200
<v Speaker 5>It's very clear in Commission rules that utilities may not

0:15:12.800 --> 0:15:18.240
<v Speaker 5>charge their customers for lobbying, and lobbying.

0:15:18.120 --> 0:15:20.240
<v Speaker 4>Is different than educating.

0:15:20.680 --> 0:15:23.520
<v Speaker 5>SoCal Gas has tried to pretend that this was a

0:15:23.520 --> 0:15:25.560
<v Speaker 5>gray area and they were just engaged in education.

0:15:27.400 --> 0:15:31.080
<v Speaker 1>Campbell's office investigated further to try to figure out exactly

0:15:31.120 --> 0:15:34.680
<v Speaker 1>what sokel Gas was charging customers for. When I spoke

0:15:34.680 --> 0:15:37.240
<v Speaker 1>with him back in twenty twenty one, the Commission had

0:15:37.320 --> 0:15:41.520
<v Speaker 1>just affirmed his office's broad discovery rights, meaning they could

0:15:41.560 --> 0:15:45.400
<v Speaker 1>request all sorts of documentation from so cal Gas. Though

0:15:45.440 --> 0:15:48.200
<v Speaker 1>SoCal Gas had tried to argue it didn't have to

0:15:48.280 --> 0:15:52.160
<v Speaker 1>cooperate with the investigation because of First Amendment rights and

0:15:52.280 --> 0:15:56.600
<v Speaker 1>attorney client privilege. The Commission struck that argument down. Then,

0:15:56.640 --> 0:15:59.920
<v Speaker 1>in March twenty twenty two, the California Public Utilities Can

0:16:00.520 --> 0:16:04.400
<v Speaker 1>ruled in the first complaint against socaugas the one where

0:16:04.400 --> 0:16:07.680
<v Speaker 1>they were cheating on the energy efficiency program. The judge

0:16:07.720 --> 0:16:10.840
<v Speaker 1>slapped them with a fine of almost ten million dollars

0:16:10.840 --> 0:16:14.960
<v Speaker 1>for that, which seems like a lot, but Campbell's office

0:16:15.040 --> 0:16:18.880
<v Speaker 1>initially recommended a fine of two hundred and fifty five million.

0:16:19.240 --> 0:16:22.360
<v Speaker 1>SOCU Gas did not respond to requests to speak with

0:16:22.480 --> 0:16:24.920
<v Speaker 1>us for this podcast, but in the wake of this

0:16:25.040 --> 0:16:30.120
<v Speaker 1>initial CPUC ruling, it did release a public statement saying, quote,

0:16:30.160 --> 0:16:34.040
<v Speaker 1>we hear and respect the Administrative Law judges decision on

0:16:34.120 --> 0:16:37.520
<v Speaker 1>this issue. Over the last two years, and in response

0:16:37.600 --> 0:16:41.120
<v Speaker 1>to this proceeding, we have enhanced our companies accounting and

0:16:41.240 --> 0:16:44.880
<v Speaker 1>oversight practices. We look forward to working with the CPUC

0:16:45.040 --> 0:16:49.280
<v Speaker 1>and staff on how to strengthen these efforts. Under new leadership,

0:16:49.400 --> 0:16:53.480
<v Speaker 1>Socalgas is focused on a business strategy that is sustainable

0:16:53.600 --> 0:16:57.160
<v Speaker 1>and aligned with California reaching its climate and clean air

0:16:57.200 --> 0:17:01.400
<v Speaker 1>goals more quickly and more equitably. The fact that it's

0:17:01.480 --> 0:17:05.879
<v Speaker 1>undernew leadership is interesting, especially as the utility waits for

0:17:05.920 --> 0:17:09.600
<v Speaker 1>a CPUC decision about its use of customer money to

0:17:09.760 --> 0:17:12.840
<v Speaker 1>fund a front group. That's it for this time. We'll

0:17:12.880 --> 0:17:15.840
<v Speaker 1>keep you posted on any decisions in that So Cal

0:17:15.960 --> 0:17:20.520
<v Speaker 1>Gas case next time. Another story of the gas industry

0:17:20.680 --> 0:17:24.320
<v Speaker 1>invading local politics in Southern California.

0:17:25.960 --> 0:17:28.639
<v Speaker 8>There was you know, a variety of front group activity,

0:17:29.160 --> 0:17:33.040
<v Speaker 8>likely associated with the Southern California Gas Company, to bring

0:17:33.119 --> 0:17:39.520
<v Speaker 8>a variety of different spokespeople, paid spokespeople, or essentially people

0:17:39.560 --> 0:17:43.280
<v Speaker 8>off the street to you know, Parie a message that

0:17:43.520 --> 0:17:46.000
<v Speaker 8>was oppositional to electrification.

0:17:46.800 --> 0:17:49.920
<v Speaker 2>They found the jobs through indeed dot com and they

0:17:49.920 --> 0:17:53.159
<v Speaker 2>were actually advertised as environmental fellowships.

0:17:58.440 --> 0:18:02.320
<v Speaker 1>Drilled is an original Critical Frequency production. Our producer is

0:18:02.400 --> 0:18:05.399
<v Speaker 1>Jules Bradley. Our editor of this season is Jude Joffy

0:18:05.440 --> 0:18:11.520
<v Speaker 1>Block sound design, mixing, mastering and original music throughout this episode,

0:18:11.560 --> 0:18:15.480
<v Speaker 1>including our new theme song by Peter Duff, fact checking

0:18:15.600 --> 0:18:18.800
<v Speaker 1>by weed an Yan. Our First Amendment attorney is James

0:18:18.840 --> 0:18:22.480
<v Speaker 1>Wheaton of the First Amendment Project. Our artwork is by

0:18:22.520 --> 0:18:24.840
<v Speaker 1>Matt Fleming, and of course the show is reported and

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<v Speaker 1>written by me Amy Westervelt. If you'd like to support

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<v Speaker 1>reading or review wherever you're listening. It really helps us

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<v Speaker 1>next time. Contended for fatted fl