Lee Iacocca has joined the advisory board of the controversial Commonwealth Energy Corp. of Tustin.
Iacocca, the former chairman of Chrysler Corp., founded and is now the chairman of Santa Monica-based EV Global Motors Co., a manufacturer of electric bicycles.
Iacocca learned about Commonwealth Energy because it’s selling his company’s bicycles at its Commonwealth Energy store in Santa Monica.
“As we talked to him about what we were doing, he became excited and agreed to come on the advisory board to help us grow,” said Commonwealth Energy spokesman Jay Goth.
An assistant to Iacocca confirmed that he has joined Commonwealth’s advisory board but said he was out of the country and unavailable for comment.
Iacocca is the second prominent person to join the company. Former OC Sheriff Brad Gates joined its board of directors last year.
Fred Bloom began Commonwealth Energy in 1997 to take advantage of the state’s deregulation of its energy market. Bloom raised capital for the company by selling securities that he said didn’t have to be registered because of an exemption under California law that says investors must meet certain suitability qualifications such as a high net worth.
Bloom, in a 1999 interview, said his company had raised $49 million.
But the flamboyant Bloom ran into trouble when it was discovered that five states, including California, had issued cease-and-desist orders against him for selling unregistered securities during the prior 12 years. He didn’t mention this in his application to the California Public Utilities Commission to be an energy service provider.
Commonwealth also was cited by the PUC for overbilling 19,000 customers in what the company said was an error.
As part of an agreement in January with the PUC to settle the complaints, Bloom agreed to resign as chairman of Commonwealth Energy and remove himself from the company’s California operations for two years. Ian Carter replaced Bloom as chairman.
Since California began deregulation in 1998, about 223,000 customers, or 2% of the state’s 10 million customers, have switched from the state’s three big investor-owned utilities to an independent energy service provider, as of May 31. Commonwealth Energy is considered the largest independent service provider in terms of number of customers, with 86,000 clients.
Commonwealth has also started providing energy to customers in Pennsylvania, where it operates under the name electricAmerica and, Goth said, has 30,000 customers. Common-wealth also has a Web site, Electric.com.
Goth said he didn’t know whether Iacocca was being compensated for being on the advisory board.
Other members of the advisory board include: Tom Hinrichs, an expert in geothermal resources and president of Escondido-based Pacific Energy Consultants, Inc.; and Chong Chiu, a nuclear engineer who the company said has led 131 research projects funded by the utility industry. n
