Consumer groups, businesses and state lawmakers are all watching closely how California Gov. Arnold Schwarzenegger in the next few weeks handles the upcoming two vacancies on the five-member California Public Utilities Commission. Indications are his administration’s appointments secretary will be getting a steady stream of candidates from all sectors of the state.

The two exiting commissioners, Carl Wood and Loretta Lynch, leave with the label as the current commission’s “consumer advocates” and as a vocal minority the past two years often at odds with the other three CPUC members, all of whom, like the outgoing regulators, were appointed by recalled former Gov. Gray Davis.

Schwarzenegger’s spokespeople are not commenting on the upcoming appointments, which are expected before Dec. 31 when Wood’s and Lynch’s six-year terms expire. Rumors name some termed-out former lawmakers with experience overseeing utility/energy issues, but there is no speculation on how soon the governor will act.

A powerful business group in the high-tech Silicon Valley, the Silicon Valley Manufacturers’ Group (SVMG), whose energy committee chairman is also Schwarzenegger’s chief energy adviser, conducted an all-day “interview” session last week, according to one energy industry executive who attended, meeting with and questioning 11 potential CPUC candidates.

From among the group, SVMG plans to submit by this week its recommendations to the governor’s advisers, according to Justin Bradley, the business group’s energy and economic vitality director who coordinated last week’s candidate interviewing process.

“To the extent that names get out in public, they tend to have less and less influence,” said Bradley, adding that he wishes it wasn’t that way, but that is the way it is. “The people we have looked at represent a wide variety of people, quite varied in their backgrounds.

“We are looking for individuals who get positive results in a political and regulatory climate, get along with people and have shown leadership. It doesn’t have to be a particular kind of people — there are lot of different skills — but ratemaking is what they do, so understanding that is important. And having the ability to positively impact CPUC culture and help it catch up to the modern technology of our economy is important.”

Bradley said the manufacturers’ group was heavily influenced last May by current Commissioner Susan Kennedy, who is just finishing her second year on the CPUC, when she spoke at the group’s annual energy summit. She detailed how important the state regulatory commission, which is constitutionally based and regulates energy, telecommunications, transportation, water, railroad and passenger-transportation companies, is to the California economy.

“We need (CPUC) people who understand that California is competitive because we have embraced competition, and someone who understands that well and how it applies to the CPUC is definitely a more feasible candidate,” Bradley said. “We’re just one of many resources to the governor’s office, which has something like 8,000 appointments, 800 of which are for full-time positions like the CPUC positions.”

The Silicon Valley businesses are very interested in energy and telecommunications issues, along with some of the water issues, now before the CPUC, Bradley said.

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