SAN FRANCISCO — Every year California utility ratepayers unknowingly pay millions to political advocacy groups through a reimbursement scheme called “intervenor compensation.” This year policymakers should reconsider this process that bilks locals for questionable causes, high-priced attorneys, and special interests.

The purpose of the “intervenor compensation” program is supposedly to encourage utility customers to participate in various legal proceedings concerning energy and telecom regulations. To this end, the California Public Utilities Commission (PUC) offers reimbursement of costs incurred by those who, by submitting useful policy recommendations or factual arguments, give “substantial contributions” and are found to face “significant financial hardship.”

Under state law, utility companies like SBC or Verizon are required to absorb these reimbursements, which prompts them to raise customer rates and create a system where utility ratepayers ultimately pay for compensation awards. With a broad definition of “customer” on the books, almost any organization purporting to represent utility ratepayers can receive compensation. As a result, this naive law has devolved into an entitlement program for a handful of dubious activist groups that have bankrolled off championing the interests of consumers.

The most prominent recipient of compensation, The Utility Reform Network (TURN), is a San Francisco-based non-profit that describes itself as a “consumer organization” working to ensure “fair rates for utility services.” Ironically however, TURN is responsible for the higher utility rates it claims to fight, as it reported more than $1.5 million in government-reimbursed attorneys’ fees in 2003, about half of all compensation dollars dolled out to advocates.

In a recent request for more than $600,000 in repayment, TURN asked reimbursement for, among other things, a $31 fax job, a $1,600 photocopy session, and a conference call that nearly topped $300. It should also be noted that the non-profit regularly requests awards for top-ranking attorneys who command more than $350 an hour for their services. TURN’s ability to recruit and bill for expensive staff, and yet claim to be fiscally insolvent, reveals the inherit flaws of the compensation regime.

A 2004 PUC report revealed that more than 36 high-priced lawyers and a dozen policy experts received the lion’s share of compensation in recent years, hardly facilitating the grassroots customer voice for which the program was intended. A closer look at similar organizations reveals that government handouts aren’t necessary to allow for public input in policy decisions.

Consider that after pop singer Janet Jackson exposed her breast on Super Bowl Sunday, the non-profit Parents Television Council led an FCC campaign to reprimand television networks that aired the incident. Though left-leaning media pundits decried the high-profile effort, it was made possible solely through private donors, not a mandatory legal system of subsidized charges and fees. Other non-profit advocates that retain costly legal staff, such as the Sacramento-based Pacific Legal Foundation, have found ways to raise millions of dollars each year without needing to pass the buck to unaware consumers.

Californians would be wise to take a firm stand against rising utility bills and call for an end to intervenor compensation. Reimbursing groups for political lobbying costs that are not in the interests of consumers shouldn’t be tolerated, especially given the high tax rates and cost of living state residents already face. Utility commissions in other states have rejected schemes that amount to a feeding trough for activists.

Consumers should not be forced to pay higher phone and electric bills so that special interests can wage pet political campaigns. If TURN and other intervenors are truly unable to raise enough donor dollars to stand on their own, perhaps there is no public demand for their efforts.

Vince Vasquez is a policy fellow at the Pacific Research Institute, a free-market think tank based in San Francisco. He can be reached at vvasquez@pacificresearch.org.