Ralph Cavanagh (pictured), a senior lawyer from the Natural Resources Defense Council (NRDC), set up the “California Collaborative Process” in 1989 which enabled key environmentalists, according to the San Francisco Bay Guardian, to "meet behind closed doors with top executives from private utilities to smooth over their differences and hammer out energy-efficiency programs.”
One of the founders of the NRDC was John Bryson, who later became head of the California Public Utilities Commission (CPUC) and then CEO of Edison International. He was also "founder and cochair of the Pacific Council on International Policy, founded in 1995 in partnership with the Council on Foreign Relations, the promotional arm of the ruling elite in the U.S" and most recently US Secretary of Commerce 2011-12, a nomination endorsed by the Chamber of Commerce. According to author Harvey Wasserman, Cavanagh was a “disciple of Bryson”, who is now considered a prominent opponent of renewable energy in California.
The California Collaborative promoted the unlikely idea that energy efficiency could be achieved voluntarily through financial incentives to the utilities. They persuaded the CPUC to allow the utilities to earn a profit on energy claimed to be saved through conservation as well as energy capacity added (see Demand-Side Management (DSM)).
PG&E’s ‘commitment’ to Demand-Side Management (DSM) didn’t stop it cutting industrial electricity rates and seeking to increase its share of that market by effectively subsidising wasteful industrial energy usage. However the ‘commitment’ certainly earned them good PR, with the help of NRDC: “Suddenly, NRDC became an ardent public defender of PG&E, whether the issue was high electric rates or PG&E’s environmental credentials.” As a result of the Collaborative Process, PG&E was able to run television advertisements with titles such as “Conversations with the Earth” and “Smarter Energy for a Better World”, paid for by ratepayers of course, that further greenwashed its image.
In 1991 President Bush awarded PG&E the Environmental and Conservation Challenge Award which was promptly advertised in a full-page newspaper advertisement in which Cavanagh praised PG&E for its conservation efforts.
Cavanagh also produced videos on behalf of PG&E, describing their conservation efforts, and coauthored an article on the same topic with PG&E personnel. He was appointed to a steering committee with Amery Lovins and others for a PG&E research project and he generally received favourable media coverage for his ‘positive’ and collaborative stance.
Between 1994 and 1998, Californian private utilities cut their budgets for achieving energy efficiency: PG&E by 38 percent, San Diego Gas & Electric by 58 percent and SoCalEd by 23 percent. PG&E used the money it received for stranded assets (see below) "to purchase two of the dirtiest fossil-fuel power plants in Massachusetts".
The NRDC was also enrolled in the battle for electricity deregulation in California. They were persuaded that deregulation would remove incentives from the regulated monopolies to increase electricity sales, build large new power plants – particularly nuclear power plants, ignore environmental costs, and undermine alternative generation from renewable sources. This was despite the fact that California Public Utilities Commission (CPUC) energy efficiency programs were discontinued in the 1990s as market ideology demanded that energy efficiency should result from competition. Environmental support was also bought with a small budget in the deregulation legislation for energy efficiency and the development of electricity generation from renewable resources.
Wasserman claims that the pro-environmental measures in the bill were a “few eco-scraps” that enabled Cavanagh to sell the deregulation bill behind the scenes to the media and in the mainstream environmental community. Cavanagh was utilised by the media as the voice of environmentalists on this issue, preventing those with more critical stances from being heard.
According to the American Prospect, John Bryson, former NRDC co-founder and Southern California Edison (SoCalEd) CEO, got NRDC support for deregulation by promising a commitment to various conservation programs but he later “persuaded FERC to overturn the conservation mandate”. Edison's stock rose by 25% in the few months after the deregulation bill, AB1890, was passed.
Wasserman explains that the deregulation bill was drafted by SoCalEd lawyers in SoCalEd offices. Far from being of benefit to the environment, it crippled the nascent solar and energy efficiency industries, because of the uncertain investment environment created and the surcharges necessary to bailout the utilities. It also preempted the adoption of wide-scale industrial natural gas co-generation by enabling the utilities to offer large industrial consumers cheap, subsidised electricity.
The NRDC proposed that stranded assets—that is, generation or transmission systems that would be uneconomical in a competitive market—be amortized, either directly by ratepayers or indirectly through a bond issued by a state trust...either way, the ratepayer was saddled with the stranded costs... which nationwide are estimated at between $200 and $300 billion.
When environmental and consumer groups attempted, in a 1998 ballot, to repeal parts of the deregulation bill, including the ratepayer payout for stranded assets associated with nuclear power plants, the NRDC actively opposed them.
In 2002, Senate Majority Leader Tom Daschle and Senator Bingaman used environmental measures as a ruse to get an Energy Policy Act adopted which would repeal the 1935 Public Utilities Holding Company Act (PUHCA). They had the support of the NRDC because of the environmental provisions, which included a “grab bag of favor-currying, but unrelated provisions concerning automobile fuel efficiency, energy policy on Native American lands, renewable energy sources” etc.
NRDC was a strong supporter of Enron. Enron used donations and its good relationship with the NRDC to ensure approval for Enron’s purchase of the largest electric utility in Oregon, Portland General Electric (PGE). There was much opposition to the purchase in Oregon. Even the state’s PUC was opposed to the takeover, warning that prices would rise, workers would lose their jobs, and the environment would not be protected. Others went further, arguing that Enron planned to sell off PGE’s assets and to sell its cheap hydropower to California for large profits.
NRDC’s Cavanagh played a key role in pacifying some of this opposition. He negotiated a memo of understanding between Enron and Oregon environmental groups involving $500,000 of financial support from Enron to the groups. To all and sundry, Cavanagh argued that Enron was a socially responsible company that could be trusted. The takeover went head. And sure enough, in the following two years rates went up, assets were sold and PGE’s electricity made its way to California. Enron then sold the utility.
In 1997 Nancy Rader, a consultant to the American Wind Energy Association, proposed that ten percent of energy be sources from renewable power sources by 2010. This was referred to as a Renewable Portfolio Standard (RPS). She was surprised to find her proposal opposed by NRDC and EDF as "too radical" and "politically unfeasible".
However the CPUC and a number of members of Congress, and some state governments all supported the measure. In 1999 the Cinton administration proposed an RPS of 7.5 percent.
by then the Energy Foundation had joined the chorus and advised its grantees to cease arguing that RPSs were politically unfeasible. Ralph Canvanagh obeyed but proceeded immediately to negotiate versions of the standards that would be acceptable to public utilities, thus weakening a key bargaining chip for the ultimate deal.
In some cases corporate donations create conflicts of interest. For example, when there was a fight over development of the Ballona wetlands in LA, the developers were funders of the NRDC and its trustees had business connections to the developers. NRDC therefore chose to stay silent on the issue and not take sides. It was accused of tailoring its "environmental policy to protect the business interests of its contributors and trustees".
This apparent inherent straitjacketing of the group by special interests coincides with other controversial stances that NRDC has adopted. For example: support of stranded costs bailouts for nuclear utilities which thereby has facilitated electricity deregulation; advocating shipping nuclear waste to Russia; taking no active stance on the Ward Valley nuclear waste dump; support or non-activism on trade deals such as NAFTA; opposition to incinerators only on a case by case basis; negotiating in support of oil drilling in a national park in the Amazon; and other matters.