S. David Freeman Interview: Conversations with History; Institute of International Studies, UC Berkeley

Energy, Conservation, and The Public Interest: Conversation with S. David Freeman, Chairman of the Board, California Consumer Power and Conservation Financing Authority, September 29, 2003, by Harry Kreisler
Photo by Jane Scherr

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Public Service

In your distinguished career in the government -- we won't be able to cover all of it, but working with Presidents Johnson, Nixon, and then Carter -- you were the first person to inventory federal government expenditures on energy and see the policy whole, in its entirety. You directed the writing of the Ford Foundation report on energy. You were the first government official to put funding into solar power. You drafted the first energy message by a president. You were involved in putting together the Environmental Protection Agency and all the environmental laws on the books enacted by Nixon in '71. You put in the first conservation measures. You were involved in the first efforts to increase gas mileage. So you've really done a lot, my goodness!

I didn't realize I had done that much until you just put it all together, but it was sort of just one job at a time.

So knowing, then, your background, I want you to help us understand the big picture in helping our political system change the way it looks at problems. What are the key elements in bringing new ways of thinking and new issues to the agenda? Because when you started, energy and environment were nowhere.

That's right. But it was somewhere at the grassroots. There were people out there that were concerned and interested. If you think all those things started in Washington, D.C., you're mistaken. Actually, it was California that had the first serious air quality problem, and it was the influence of the grassroots that led to action in Washington. We used to have a joke back in the late sixties that our national energy policy was to pray for mild weather. And, frankly, that's about where we are today. It hasn't changed.

Most of the things that I've written over the years are still relevant. Because the differences among the regions of this country are so intractable, there is so much difference between the point of view in California and the point of view in Kansas; or the point of view in Texas versus the point of view in Maine, that we're at loggerheads. The coal states, the oil states, the influence of the automobile industry, etc., dominate the scene. Back in the Kennedy administration, the president used to go to the oil state senators and ask them, "What can I do for you on oil?" to get their backing on trade measures and other measures. It was considered a giveaway item to trade for votes.

It's finally out into the open where the public interest gets some attention, and I would say that we've made tremendous progress. I was called a socialist when I first advocated energy efficiency back in the early seventies. Now it's pretty well accepted. My point of view is that we have made a lot of progress, but it's primarily from the interest of people at the grassroots level.

But I'll tell you how to get your energy policy really zeroed in. You write a report and you send a copy of it to a fellow that becomes the President of the United States. You see, I sent Jimmy Carter a copy of the Ford Foundation study that showed that energy efficiency and renewables were serious, viable things. He read it and it became his energy policy. That's how he named me to head the Tennessee Valley Authority. I had no political backing, and he didn't care about political backing. Of course, I was not in good shape with the politicians, but we got a lot done.

Before we talk about the work you've done with various presidents, I want to pursue this thing about what happens at the grassroots. Given your experience in your various roles, like head of the TVA, or the L.A. Power and Water Utility, it's very clear that you listen to people. But what I'm curious about is what gets them going? Is it that they see things that the politicians don't, or they're being organized in such a way to try to influence the politics?

Let me be brutally frank. You have to get yourself in a position of authority. The CEO of a utility is a position of authority. And then you have to, by gosh, lead and not waffle. You have to stake out your point of view and let people know that's what it's going to be. When I went to the Tennessee Valley Authority, they were building more nuclear power plants than Carter has liver pills. They were going to nuke the whole ballgame. And, with all due respect, it took someone in authority, which Jimmy Carter had given to me, to turn it around. But it wouldn't have happened if I had said, "Well, on the one hand, we should go ahead. And on the other hand, we should have a big power plant ... " You've got to assert yourself if you have the authority, and it takes a president, usually, or a city council to put you in authority.

For example, I got the job in Los Angeles because a fairly liberal city council in Los Angeles wanted the mayor to hire me. I teased Dick Riordan, I told him, "I got the job because I was the lowest bidder." He wanted a private power company executive to come in, but the city council wouldn't let him pay enough money to attract someone like that. He ended up getting me. Instead of selling the utility, which is what Dick Riordan wanted to do, we turned it around and we avoided the deregulation fiasco by just saying "No," and not going there. The utility became the hero of the town, because we kept the lights on when everybody else was blacking out. And the rates have kept stable.

My key is to sense what public opinion will support and go a little bit further and assert leadership. There is a difference between a manager and a leader. I consider myself to have, if I may say so, qualities of leadership. Some people say I've led things in the wrong direction. If they're for nuclear power and digging up a lot more coal and things like that, well, then, they say that I've taken them in the wrong direction. But if they're for renewable energy and cleaner air and stable rates and advancing something that our children and grandchildren can be proud of, then I ... I attract a lot of following, either strongly positive or strongly negative. There have been very few people that have been neutral about me throughout my life.

Let's break apart what it is that makes a leader. One of the things in your record is, clearly, seeing alternatives to what is being done. For example, in the TVA, on your agenda was the building of a number of nuclear power plants, and you said "no." You cut back on those. So what helps you see those things? Is it the consensus that's emerging in the community or what?

Well, no, let me tell you. You learn by listening. You mentioned that earlier. I was pretty conventional about nuclear power and the whole power business until one day, two women from New Hampshire came to visit me when I was in the White House. I think it was maybe under Nixon. They explained to me that somebody wanted to build a nuclear power plant near their house. They did a lot of research, and they told me that you could save enough energy and so you didn't need to build a plant. I listened to them, and I checked it out, and they were right, and all of a sudden it was like a light bulb went off in my head that we were just wasting a tremendous amount of electricity, and we didn't need to build as many plants as we thought we needed to build, because it's cheaper to conserve. That didn't mean we didn't need to build anything, but we just didn't need to build that many. And they didn't necessarily have to be nuclear. So I have gotten my ideas from other people, and from reading. But it's more from other people. If you listen to people, you learn. Now, I've done a lot of talking on this program, so I'm not learning anything.

Well, you're not supposed to do that here.

But I've learned over the years that if you truly listen to people, that that's the key to leadership. My first day on the TVA board, I went out to lunch with the critics of TVA that were at that meeting. I remember the other board members teased me, and they said, "We'll send out the security guards to get you, Dave." But I found out from those people that we were doing some things that were just plain stupid that were aggravating them. Listening is a key to leadership.

One of the issues or concerns that seems to always arise when you take a position is your focus on efficiency, and what is surprising for someone who doesn't know all that you know about these problems is it often turns out that what you're doing is bringing efficiency to organizations like the TVA or the L.A. Power Company.

I've often thought that we ought to have a new organization called, "Conservatives for Conservation," because it's truly a businesslike approach to things. For some reason, the whole conservation and efficiency movement got to be known as a left-wing thing. It's not at all. It's fundamental. The way I have been able to be successful is that I applied it not just to the use of energy, but I've applied it to the operation of the utility. I have eliminated an awful lot of jobs that were just unnecessary. I found that if I paid my dues to improving the bottom line of the utility, even though it's nonprofit, but, in other words, reducing the rates to the consumers, then I'm very believable when I come out for solar power. In other words, I don't sound like I'm just a Sierra Club [member] yakking about a do-good thing. I build up my credentials as somebody that can truly benefit the consumer. And then I'm listened to a whole lot more than I would be otherwise.

When you took over the power company in Texas, they were about to start lignite mining, which would have not only been environmentally unsound and dangerous to the people in the area, but also it would have cost a fortune.

Yes. People need to know, lignite is what I would call "near-coal." It's coal with about half the heating value of coal. So you've got to burn twice as much to get the same amount of electricity. And it's highly polluting. It was going to be a strip mine that would turn Fayette County,Texas, upside down, and it would have cost an arm and a leg, aside from the pollution. But I had a tough proposition. They had already bought the mining equipment. There was a crane that you could see from a hundred miles off, sticking up in the air. And they were about to start digging. So that was a very tough assignment. It took a bit of education and, frankly, [I] delayed it to where we got a few new board members that weren't tied to the fact that they had ordered the equipment. That mine was never started, and we had alternative fuel that was cheaper and far cleaner. And I can go back to Fayette County, Texas, anytime near La Grange and there are a whole group of landowners who will give me a big hug, because we essentially kept their way of life.

Now, your concern with efficiency would seem to go against what are clearly your liberal values.

But why?

I guess that I'm surprised because there's a myth in our society that the two don't go together.

It is an aggravating myth, if it exists, and I'm afraid that it does, because efficiency is certainly non-political, non-ideological. It is interesting that I have this joke of my own that I want to create a "Conservatives for Conservation." I think they should be for it just as much. But the truth of the matter is that the more liberal people have been more for conservation than the production-side people. I think the conservatives want to dig and burn, and produce; they are supply-side people. But whatever the case is, efficiency is what's made this country's productivity grow over the last fifty or sixty years. It's truly a correct answer. And it's very interesting to me that it's taken about twenty-five years for the energy industry to warm up to it a little bit, because they want to sell more and more of their product, just like a shoe salesman. But from a consumer point of view, if you can keep the food in your refrigerator cool with half the kilowatt-hours, you're saving money.

What prepared you for being able to balance both of these? Is it the fact that you're an engineer and a lawyer?

I wish I could say that that did it, but I think that that's just window dressing. Frankly, I did grow up in a household where my parents, who, because of their lifestyle in Lithuania, always turned the lights off, and we didn't waste anything. If you grow up in a poor household, you're used to not wasting things. But I'd like to think that I've just had an open mind all my life. When these two women explained to me that they didn't need to build that nuclear power plant at all, it just seemed like such a sensible point of view that I sort of pioneered it.

Today, all the automobile companies are talking about the hydrogen fuel cell being the future. Well, the fuel cell is twenty years off. My point of view is that the internal combustion engine loves hydrogen, and we can get onto it now. We could make hydrogen from water, and we could substitute that for imported oil. It's just a very practical point of view.

When I was nominated to the TVA board, Senator Stennis held up my nomination because he'd heard that I was a radical environmentalist. I met with him and I said, "Senator, I'm just a practical environmentalist." He says, "Practical environmentalist? I think we can live with that, Dave." And so he confirmed me. A lot of times, the magic is in the use of the right word. I think I am practical.

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