The utility corporations think that the public won't question the scams, and bend over and take it, if PG&E, or some other scam utility, says "it's green, don't worry, move along, nothing to see here...". All of the utility "green options" are turning out to be lies.
The many abuses of the term "green energy" to trick taxpayers into not looking behind the curtain have become monumental examples of crony corruption, political kick-backs and payola!
The history of MCE is marked by consumer deception and false advertising about the true "cleanliness" of the energy it delivers in the fight against global warming. In 2015, in response to public criticism, MCE claimed it would sever ties with Shell Oil: that by 2017 it would be free of Royal Dutch Shell’s subsidiary Shell Energy North America.
Following mounting public criticism, MCE also promised to cease its use of renewable energy certificates, known as RECs. This latter commitment garnered the support of the Sierra Club, whose attorney’s referred to the use of RECs as "deceptive marketing" when PG&E proposed using these instruments in its now-abandoned “Green Option” that was proposed to compete with MCE.
Out with Shell...
In 2017, without fanfare, MCE’s full services contract with Shell expired. Long-time critics and environmentalists watched in anticipation for this new day to arrive, when the misdeeds and misdirections of MCE and its CEO, Dawn Weisz, might cease along with MCE’s exports of cash to Royal Dutch Shell in the Netherlands -- which, to date, top one-half billion dollars.
However, with MCE there is frequently a caveat. Even though MCE announced it would no longer engage Shell with a “full-services” contract, a pipeline of energy purchases continued to flow to the oil giant. Those contracts ranged from $10,000 to a $27.3 million contract that Dawn Weisz executed last month.
In a curious twist, MCE Chair Kate Sears was embroiled in a conflict of interest charge in late 2017, because she held Royal Dutch Shell stock while voting on MCE contracts with Shell. According to Supervisor Sears’ Form 700 filings with the County of Marin, she also holds stock in Exxon-Mobil, Phillips 66, Occidental Petroleum, BP, Total (French oil company), Conoco Phillips, Chevron, and oilfield services company Schlumberger.
Nevertheless, with Shell’s departure as manager of MCE’s energy portfolio and energy scheduling, MCE was in immediate need of expertise to fill that void.
… in with conflicts of interest and investigations
MCE received six bids from firms that proposed managing MCE’s energy portfolio and scheduling energy deliveries. MCE awarded a contract to ZGlobal by unanimous vote of the board, in June 2016. Part of the justification for selecting ZGlobal was that it offered what’s known as “shadow settlement” services, which is a parallel reconciliation of the myriad of charges accrued during the delivery of electric power.
Ironically, Weisz ducked a public question about shadow settlements in 2009, when she brought her MCE entourage to Novato, seeking support for the pending launch of her fledgling enterprise.
MCE presumably conducted due diligence on ZGlobal, but it failed to identify that the company had caught the eye of investigators who were zeroing in on its conflicts of interest and double-dealing with southern California’s Imperial Irrigation District (IID). The Desert Sun, which was central to exposing financial improprieties, identified nearly $100 million in billings and now-cancelled contracts involving ZGlobal. Those issues remain open.
ZGlobal will have a close relationship with MCE, particularly as pressure mounts for MCE to deliver on California’s growing requirement for increased energy volumes starting in 2021. These needs will include solar development, engineering, and procurement of energy from new renewable resources. Many of these areas are similar to those at IID.
Birds of a feather?
MCE’s selection of ZGlobal is telling of its decision-making and its peculiar attraction to companies embroiled in controversy. Previously, MCE became involved in a 120 acre solar development that failed, due in large part to less than competentmanagement by MCE.
North American Power Group (NAPG) was to construct a 15 megawatt solar farm outside Sacramento, in Rocklin, California. MCE’s technical consultant, Kirby Dusel (Pacific Energy Advisors, located in Folsom, California, where ZGlobal is also located) referred to the contract with NAPG as a “fleeting” opportunity when recommending Rio Solar to MCE’s board.
In reality, Rio Solar existed only as a concept. While MCE’s technical consultants failed to grasp the multi-year time requirement for environmental reviews, MCE’s board believed Rio Solar was just months away from commercial production.
After coming to terms with NAPG’s zero-progress, including sudden plans to relocate the solar farm to Bakersfield, Rio Solar was quietly cancelled by Weisz.
The absence of Rio Solar’s energy was the equivalent of Marin County’s entire residential electric load for three months. Contrary to their prior assurances, MCE covered the clean energy shortfall with RECs.
NAPG itself subsequently came under Department of Justice investigation (eighteen months ago NAPG settled charges involving its carbon sequestration project with the Department of Energy). The DOJ found NAPG’s owner “fraudulentlytransferred millions of dollars of award monies into his personal bank account and used the award monies to fund an extravagant lifestyle.”
However, MCE’s controversy was not limited to NAPG.
MCE entered into a $190 million solar contract with a San Diego company by the name of enXco. MCE selected the firm over California’s SunPower and domestic supplier LSPower. Weisz was careful to refer to “enXco,” ignoring the identity of the company that actually owned enXco, when trumpeting the solar contract to Marin cities, during MCE’s update tour about MCE’s success.
A firestorm ignited when Marin residents discovered that enXco was a subsidiary of Électricité de France, the world’s largest nuclear power company, headquartered in France. The exposure, which should have been an embarrassment for Weisz, who also touted MCE’s rejection of nuclear power and calls for the closure of PG&E’s Diablo Canyon nuclear power plant, only galvanized her resolve about retaining her rightful place as MCE’s leader.
The selection of enXco demonstrated MCE’s decision-making was brazen and arrogant. To most public administrators, it would have been awkward for an agency that claimed transparency and community allegiance as justification for its existence compared to PG&E.
None of it mattered
Under Dawn Weisz, ZGlobal was a footnote to the close of a public relations fiasco. With Shell’s departure, Weisz & company wiped their hands and declared they had delivered on what was promised to the public. Shell was gone. That box was checked… in pencil.
Now it was time for Weisz to get back to work.
There were issues involving MCE’s shifting positions on RECs; and operating costs that MCE and other CCAs had, for the time being, off-loaded onto PG&E. And, most urgent of all a looming threat to CCA independence and its “self-regulated” existence from the utilities commission that was beginning to piece together energy problems in California that were caused by CCAs.
But first things, first. Weisz’s immediate priority was the continued shaping and controlling the public narrative in order to better vanquish MCE’s critics. To achieve that, Weisz invoked a familiar posture that compelled her onlookers to take up a rallying cry, that caused local media to come to MCE’s defense, that compelled MCE’s board to circle the wagons around the MCE enterprise and cede its judgment to her.
The "Victim" -- Take 1:
When MCE launched into business in May 2010, PG&E sent a letter alerting customers to be aware of a coming energy change, that they would be switched into a program known as Community Choice Aggregation. PG&E’s letter was information only -- neutral on the merits of CCA. Compared to MCE’s Opt-Out notice, the primary difference was that PG&E’s font size was large and easier to read, whereas MCE’s notice was small and had the appearance of junk mail.
In response, Weisz acted as if she couldn’t believe PG&E’s egregious behavior. How dare the big utility company engage in these anti-CCA practices by sending such a letter? PG&E was acting contrary to AB 117, the law that created CCAs. Could the California Public Utilities Commission (CPUC) please help her reign in PG&E?
That act prompted the CPUC to shut down PG&E’s conversation about CCA with its customers. If PG&E protested, the Commission was ready to levy heavy fines. And if any customers called PG&E with questions, the utility was to remain neutral while those customers were switched into MCE.
Ironically, at the same time that the CPUC shut down PG&E’s voice, Marin consumers, who lacked an arbitrator, were complaining about MCE’s unfair Opt-Out practices.
Victim of the Unions & Sacramento – Take 2:
California legislators reacted to the shortcomings of CCAs, by introducing AB 2145. The legislation would change the Opt-Out mechanism to Opt-In, meaning consumers would have to take action and elect to sign up for the program, rather than automatically being enrolled, thereby eliminating concerns of gaming and manipulating the Opt-Out enrollment system.
AB 2145 created an instant backlash in the CCA community, who feared that they would not be able to build their businesses without the automatic enrollment feature. MCE claimed that AB 2145 was part of grand scheme that threatened jobs, cost savings, renewable energy, and of course, “choice.”
Of note, with the exception of three solar jobs that MCE claims, MCE has not created any on-going, full-time jobs in Marin, except those of its staff. MCE’s last cost savings compared to PG&E was six-hundreds of 1%, and its contribution to the renewable energy through the solar farms constructed through its "feed-in tariff program" is one-tenth of 1% of its total energy load.
A feed-in tariff is where a developer funds the complete construction of a solar farm and then receives a guaranteed fixed-payment for each megawatt-hour of energy that is delivered to MCE for resale. Except for public relations, MCE’s feed-in tariff program has been a financial loss – MCE pays more than twicecurrent market prices for its feed-in tariff energy.
To combat AB 2145 legislative efforts, Weisz again set up MCE as a victim to the CPUC and with State Senators in the Energy, Utilities, and Communications Committee.
MCE claimed that private parties, including the International Brotherhood of Electrical Workers (IBEW), were distributing “very inaccurate and misleading information” about Shell and AB 2145. MCE also claimed that this writer, critical of MCE since it began green-washing dirty energy with RECs in 2011, was part of a scheme that threatened MCE’s growth.
MCE asked the CPUC to shut down public discourse about MCE – a government agency-- and Shell and, most importantly, AB 2145.
The IBEW’s letter responding to MCE is included here.
Even though the CPUC did not act on MCE’s request, MCE successfully set the foundation for its showdown in Sacramento. CCA proponents packed the legislative chambers for a final vote on AB 2145.
MCE told legislators that the Opt-Out mechanism was its birthright, and that MCE could not survive without it when everyone was spreading rumors and bad news about MCE. Besides, MCE claimed, communities everywhere were benefitting by its significant reductions of greenhouse gas (GHG) emissions compared to PG&E in the fight against global warming.
State Senators took the temperature of the room and determined their re-elections were better assured if they didn’t alienate voters. AB 2145 was defeated, preserving CCA’s Opt-Out / automatic enrollment program.
Shaping the MCE Board’s perception
MCE’s board is comprised of municipal councilmembers from each city or town that MCE serves. None of the members are energy professionals and so they rely on MCE staff for technical guidance. Competent boards require a rudimentary understanding of the business they govern.
According to MCE’s board meeting minutes from June 2014, the board did not understand even the basic component of renewable energy, known as “Bucket 1.” This was after four years of operations.
This meeting occurred after MCE was exposed for doctoring its annual greenhouse gas emission rates after PG&E’s unexpectedly lower number was published. Two years later, MCE was again exposed for importing coal-fired power that it rebranded as “clean” energy.
Click on image to enlarge
In both cases, Weisz authored letters that obfuscated the truth and kept her board of non-energy professionals in the dark. If there was any hope of someone directing MCE to begin operating with integrity, it wasn’t going to come from a board that took its queue from its CEO.
In her first letter, regarding MCE’s altering its annual GHG emission rate numbers, Weisz wrote that “MCE made a commitment to deliver a lower emission factor than PG&E, and that commitment was honored.” MCE’s revision-after-PG&E-announced-its-numbers was merely a “true up.”
MCE board meeting minutes, dated the same day as Weisz’s true up letter, identify that “Ms. Weisz responded to questions from the board specifically related to the correspondence received from Mr. Phelps.”
It is doubtful that Weisz shared thoughts with her board that were similar to those of California Air Resources Board Chair, who, five days later, wondered if MCE was engaged in consumer fraud.
In her second letter, Weisz denied that MCE’s import of “clean” coal-fired power had occurred, then claimed it was all “unexpected and unfortunate” misunderstanding before blaming Shell and the California legislature for her problem.
It remains unclear whether Weisz fully grasps what occurred involving coal imports and associated Bucket 2 e-tagging issues, because even though she signed the September 2015 letter, according to invoice records, it was authored by her consultant at Pacific Energy Advisors.
Ceding its authority
All agenda items and the vision of MCE fall to its CEO, Dawn Weisz. Of the thousands of agenda items that board has considered since MCE’s May 2010 business launch, not a single “no” vote has been cast by any single member on any single item. The odds of this occurring in a company that is fully disclosing all aspects of its operations and decisions is probably zero.
Of note, MCE’s board is now 28 strong, 10 more than the largest corporate board on record – General Electric Company, which recently announced its board is downsizing to 12 members (the most recent enterprise value of GE is $243 billion).
Part 2 of this series will address (1) MCE’s cash horde that is used to pay large staff salaries and fees of the consultants who help operate MCE; (2) MCE’s public rejection of RECs and its concurrent use of a front organization that lobbies for their continued use; and (3) MCE’s quid pro quo outreach where jobs are promised in exchange for favorable public relations in its coming fight with legislators and utility companies.
About the Author:
Jim Phelps is retired after serving the power, petrochemical, and geothermal industries for nearly 35 years as a power contractor and utility rate analyst. He is not now, nor has he ever been, employed by PG&E. He has not received any money from PG&E for his work tracking Community Choice Aggregation and Community Choice Energy activities. He has also completed consulting and thermal performance test work for Shell Oil, one of MCE's energy providers, at one of Shell's Gulf Coast refineries.
Mr. Phelps operates one of Marin's largest residential solar electric systems at his home in Novato. He also operates a solar electric system at another house in Placer County. Several years ago he initiated contact with PG&E about its carbon emission practices and with MCE about its emission practices. He also requested clarification from MCE and other CCAs about several business conduct issues, however, those CCAs declined to provide help. To this time, MCE’s only input about its business is to respond to Public Records Act requests identifying the costs for copies of public documents, or denying the existence of basic information, such as its procured volumes of system power.
By David Brock
PG&E has sent out a series of “buried notices” to consumers over the last number of years. The notices look like boilerplate PG&E bills or marketing forms, which science has proven are not identifiable to consumers.
The scam works like this:
A. - An insider group of politicians and their financiers agree to buy stock in solar panel and other “Clean-yet-corrupt” companies.
B. - PG&E switches consumers to “clean energy electric generation charges” without the consumers actual knowledge.
C. - PG&E then begins charging hundreds of thousands of consumers 30% extra for electricity because PG&E covertly “opted-them” into the clean kickback program.
D. - When caught, PG&E refuses to credit the years of over-billings back to consumers and the insider group of politicians refuse to make laws to help the consumers.
E. ..and the dirtiest part of the “clean energy electric generation charges” scam? The insider group of politicians own the very companies that PG&E is giving the 30% over-charge money to.
F. If consumer’s try to cancel thus scam charge then PG&E bills them extra for canceling the thing that most consumers would never sign up for if they knew the truth about it.
In other words: Your local utility company forces you to pay cash, covertly routed through PG&E, to corrupt politicians and you can never get a refund for the corrupt thing you never knowingly opted into.
The liars at PG&E (The guys who regularly blow up and burn down cities, pay bribes, shoot tons of toxic methane into the air and run scams) say “Oh, we sent everybody a letter telling them we were going to put them on this scam”, but 90% of all consumers say they never saw a letter and that nobody ever asked, offered or indicated that such a program was an “opt-in” option.
In the San Francisco Bay Area a charge has been appearing on PG&E bills as: “PENINSULA CLEAN ENERGY Electric Generation Charges”. This add-on can add 30 to 40% to consumer's bills.
PG&E hopes that the tree-hugging Californians won’t question a mysterious charge that has the facade phrase “CLEAN ENERGY” in it. They believe that nobody would dare question such a benevolent and altruistic sounding thing.
The scam worked for awhile, until it didn’t.
The companies that are providing this so called “Clean Energy” are dirty crony payola kick-back companies owned by PG&E executives, corrupt California Senators and their toxic campaign financiers. Let;s take a look at one of over 30 corrupt companies involved in this scam. These are companies you have heard of like Solar City, First Solar, Solyndra, etc. In one of hundreds of examples, First Solar makes solar panels with a horrific unsuitability for for Hot Climates. After this reply by their PR Director, more heartache was in store for the company.
A class action lawsuit was filed against First Solar by Pomerantz Haudek Grossman & Gross in the US District Court for the District of Arizona. The complaint states that First Solar violated the Securities Exchange Act of 1934 by not disclosing the full extent of certain manufacturing flaws on its earnings, that it improperly recognized revenue for certain products in its systems business, that it lacked sufficient internal and financial controls and, finally, that as a result, First Solar’s statement were materially false and misleading at all relevant times.
The complaint claims that First Solar reported a decrease of US$345 million in net sales for the quarter that ended December 31, 2011, and a US$164 million charge for warranty payments to replace equipment that cause premature power loss in certain panels. The plaintiff is looking to recover damages on behalf of all First Solar shareholders who purchased common stock during the Class Period detailed above.
As is the nature of class action cases other law firms have come forward, citing similar claims, including a national securities law firm, Faruqi & Faruqi, law firm, Howard G. Smith and Rigrodsky & Long, P.A.
First Solar Shareholders are being given the opportunity to seek legal counsel from several firms after a class action lawsuit was filed in the US District Court for the District of Arizona last week. Case No. 12-cv-00555, alleges that between April 30, 2008 and February 28, 2012, potential securities fraud and an over-concentration of shares in First Solar stock led to investment losses.
Securities arbitration law firm, Klayman & Toskes, noted that trading was at over US$300 per share in July 2008 and is now only trading at around US$30 per share, an almost 90% decline. Harwood Feffer, LLP, further pointed out that on February 29, First Solar revealed its financial results for Q4 and the full year 2011, reporting a quarter-over-quarter drop of US$345 million in net sales, “primarily due to the timing of revenue recognition in our systems business and lower for module-only sales.”
First Solar also advised that it had incurred a charge of US$164 million for warranty payments to replace defective equipment, including a reserve of US$37.5 million to cover future claims.
This is the typical kind of scam that PG&E promotes and forces consumers to get caught up in. Every consumer should be speaking to a class-action law firm to sue PG&E for fraud and to demand that the U.S. Government sue PG&E for fraud and for refunds to consumers for these criminal utility bill surcharge scams.
Somewhat unintuitively, American corporations today enjoy many of the same rights as American citizens. Both, for instance, are entitled to the freedom of speech and the freedom of religion. How exactly did corporations come to be understood as “people” bestowed with the most fundamental constitutional rights? The answer can be found in a bizarre—even farcical—series of lawsuits over 130 years ago involving a lawyer who lied to the Supreme Court, an ethically challenged justice, and one of the most powerful corporations of the day.
That corporation was the Southern Pacific Railroad Company, owned by the robber baron Leland Stanford. In 1881, after California lawmakers imposed a special tax on railroad property, Southern Pacific pushed back, making the bold argument that the law was an act of unconstitutional discrimination under the Fourteenth Amendment. Adopted after the Civil War to protect the rights of the freed slaves, that amendment guarantees to every “person” the “equal protection of the laws.” Stanford’s railroad argued that it was a person too, reasoning that just as the Constitution prohibited discrimination on the basis of racial identity, so did it bar discrimination against Southern Pacific on the basis of its corporate identity.
The head lawyer representing Southern Pacific was a man named Roscoe Conkling. A leader of the Republican Party for more than a decade, Conkling had even been nominated to the Supreme Court twice. He begged off both times, the second time after the Senate had confirmed him. (He remains the last person to turn down a Supreme Court seat after winning confirmation). More than most lawyers, Conkling was seen by the justices as a peer.
It was a trust Conkling would betray. As he spoke before the Court on Southern Pacific’s behalf, Conkling recounted an astonishing tale. In the 1860s, when he was a young congressman, Conkling had served on the drafting committee that was responsible for writing the Fourteenth Amendment. Then the last member of the committee still living, Conkling told the justices that the drafters had changed the wording of the amendment, replacing “citizens” with “persons” in order to cover corporations too. Laws referring to “persons,” he said, have “by long and constant acceptance … been held to embrace artificial persons as well as natural persons.” Conkling buttressed his account with a surprising piece of evidence: a musty old journal he claimed was a previously unpublished record of the deliberations of the drafting committee.
Years later, historians would discover that Conkling’s journal was real but his story was a fraud. The journal was in fact a record of the congressional committee’s deliberations but, upon close examination, it offered no evidence that the drafters intended to protect corporations. It showed, in fact, that the language of the equal-protection clause was never changed from “citizen” to “person.” So far as anyone can tell, the rights of corporations were not raised in the public debates over the ratification of the Fourteenth Amendment or in any of the states’ ratifying conventions. And, prior to Conkling’s appearance on behalf of Southern Pacific, no member of the drafting committee had ever suggested that corporations were covered.
There’s reason to suspect Conkling’s deception was uncovered back in his time too. The justices held onto the case for three years without ever issuing a decision, until Southern Pacific unexpectedly settled the case. Then, shortly after, another case from Southern Pacific reached the Supreme Court, raising the exact same legal question. The company had the same team of lawyers, with the exception of Conkling. Tellingly, Southern Pacific’s lawyers omitted any mention of Conkling’s drafting history or his journal. Had those lawyers believed Conkling, it would have been malpractice to leave out his story.
When the Court issued its decision on this second case, the justices expressly declined to decide if corporations were people. The dispute could be, and was, resolved on other grounds, prompting an angry rebuke from one justice, Stephen J. Field, who castigated his colleagues for failing to address “the important constitutional questions involved.” “At the present day, nearly all great enterprises are conducted by corporations,” he wrote, and they deserved to know if they had equal rights too.
Rumored to carry a gun with him at all times, the colorful Field was the only sitting justice ever arrested—and the charge was murder. He was innocent, but nonetheless guilty of serious ethical violations in the Southern Pacific cases, at least by modern standards: A confidant of Leland Stanford, Field had advised the company on which lawyers to hire for this very series of cases and thus should have recused himself from them. He refused to—and, even worse, while the first case was pending, covertly shared internal memoranda of the justices with Southern Pacific’s legal team.
The rules of judicial ethics were not well developed in the Gilded Age, however, and the self-assured Field, who feared the forces of socialism, did not hesitate to weigh in. Taxing the property of railroads differently, he said, was like allowing deductions for property “owned by white men or by old men, and not deducted if owned by black men or young men.”
So, with Field on the Court, still more twists were yet to come. The Supreme Court’s opinions are officially published in volumes edited by an administrator called the reporter of decisions. By tradition, the reporter writes up a summary of the Court’s opinion and includes it at the beginning of the opinion. The reporter in the 1880s was J.C. Bancroft Davis, whose wildly inaccurate summary of the Southern Pacific case said that the Court had ruled that “corporations are persons within … the Fourteenth Amendment.” Whether his summary was an error or something more nefarious—Davis had once been the president of the Newburgh and New York Railway Company—will likely never be known.
Field nonetheless saw Davis’s erroneous summary as an opportunity. A few years later, in an opinion in an unrelated case, Field wrote that “corporations are persons within the meaning” of the Fourteenth Amendment. “It was so held in Santa Clara County v. Southern Pacific Railroad,” explained Field, who knew very well that the Court had done no such thing.
His gambit worked. In the following years, the case would be cited over and over by courts across the nation, including the Supreme Court, for deciding that corporations had rights under the Fourteenth Amendment.
Indeed, the faux precedent in the Southern Pacific case would go on to be used by a Supreme Court that in the early 20th century became famous for striking down numerous economic regulations, including federal child-labor laws, zoning laws, and wage-and-hour laws. Meanwhile, in cases like the notorious Plessy v. Ferguson (1896), those same justices refused to read the Constitution as protecting the rights of African Americans, the real intended beneficiaries of the Fourteenth Amendment. Between 1868, when the amendment was ratified, and 1912, the Supreme Court would rule on 28 cases involving the rights of African Americans and an astonishing 312 cases on the rights of corporations.
The day back in 1882 when the Supreme Court first heard Roscoe Conkling’s argument, the New-York Daily Tribune featured a story on the case with a headline that would turn out to be prophetic: “Civil Rights of Corporations.” Indeed, in a feat of deceitful legal alchemy, Southern Pacific and its wily legal team had, with the help of an audacious Supreme Court justice, set up the Fourteenth Amendment to be more of a bulwark for the rights of businesses than the rights of minorities.