PUC CHIEF: A CLASSIC FOX WATCHING THE HENHOUSE

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 30, 2012 OR THEREAFTER

BY THOMAS D. ELIAS

“PUC CHIEF: A CLASSIC FOX WATCHING THE HENHOUSE”

It was a landmark event when the California Public Utilities Commission fined Pacific Gas & Electric Co. $16.8 million in late winter for its documented failure to conduct required surveys of possible gas leaks on about 14 miles of pipelines in Contra Costa County.

That figure ought to be multiplied exponentially when the PUC finally gets around to fining the big utility company for similar failings that led to the massive 2010 pipeline explosion that killed eight people in the San Francisco suburb of San Bruno and leveled 38 homes.

But this plainly justified outcome is in doubt today primarily because the former utility company chief who has headed the PUC for the last 9 years has put himself in charge of the quasi-judicial proceedings determining how much PG&E has to pay.

That’s Michael Peevey, the former Southern California Edison president first appointed to the PUC by the recalled ex-Gov. Gray Davis, a Democrat, and later reappointed to head the commission by ex-Gov. Arnold Schwarzenegger, a Republican.

Putting the former chief of Edison, California’s second-largest regulated utility, at the head of the commission regulating that company and setting its rates was an obvious conflict of interest.

But this sort of stuff never seems to bother Peevey. Less than a year after the San Bruno disaster he took off with his wife, Democratic state Sen. Carol Liu of La Canada-Flintridge in Los Angeles County, on a 12-day “travel-study” junket to Spain along with Fong Wan, senior vice president of energy procurement for PG&E.

Should the PUC president, whose agency would later be chastised for negligence in San Bruno by both federal and state officials, have been cozying up with utility executives at all, let alone with a leading PG&E official? Should fellow PUC Commissioner Nancy Ryan, who was also on the junket? Those are serious ethical questions, right up there with the ethical questions that should have been asked (but were not) during the two state Senate confirmation processes Peevey underwent.

One thing for sure: Peevey’s tenure on the commission is not threatened, as not even Gov. Jerry Brown can oust him before his term is up in 2014.

It really doesn’t matter that U.S. Rep. Jackie Speier and state Assemblyman Jerry Hill, both Democrats representing San Bruno, have called on Brown to put his own PUC appointee, longtime consumer advocate lawyer Mike Florio, in charge of the PG&E fine proceedings. For Brown, like other governors, has no control over the commission after he appoints members, who serve fixed terms deliberately designed and timed to create overlaps from one governor to the next. The only clout any governor has with PUC members is the reality that if they displease him, they won’t get reappointed.

But the PUC has diligently pursued the renewable, alternative energy pathway strongly advocated by both Brown and Schwarzenegger, so Brown has expressed no public displeasure with any of its members despite the veil of secrecy they have clamped on the costs of massive solar-thermal electricity projects they’ve okayed, all to be funded by future utility rate increases.

Meanwhile, the PUC and its members have paid no price, issued no apologies, for their own behavior leading up to San Bruno. Sure, they’ve now fined PG&E in one matter and likely will levy fines against both Southern California Gas Co. and San Diego Gas & Electric Co. if similar laxity in checking for gas leaks is proven in their cases.

There are those who maintain it is a moot point who presides over the proceedings to set PG&E’s San Bruno penalties, if only because the entire five-member commission must vote on the fine. But the reality is that the commission majority has not bucked Peevey on any major issue since he took over.

All of which makes it more urgent than ever for state legislators to pierce some of the secrecy the PUC has imposed. One bill now pending in the state Senate, sponsored by Democrat Leland Yee of San Francisco, would make the PUC subject to the state’s Public Records Act, which already covers almost everyone else in government.

There’s no doubt about the distrust bred by Peevey’s behavior and his lack of logic in keeping pricing information for many new projects confidential, a distrust increased by his making himself the arbiter of PG&E’s penalty.

Plainly, the commission under Peevey has failed in its basic mission of protecting consumers and the public from big, monopolistic corporations. It’s appropriate for PG&E to pay a huge penalty, and the money ought to go to San Bruno survivors and heirs of victims. But Peevey also ought to pay a price, and that seems extremely unlikely.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net