PUC CHIEF: LIKELY FIRST TEST OF NEW BROWN TERM

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, OCTOBER 17, 2014, OR THEREAFTER

BY THOMAS D. ELIAS

“PUC CHIEF: LIKELY FIRST TEST OF NEW BROWN TERM”

    How concerned will Gov. Jerry Brown be with the well-being of ordinary Californians in the new term he’s widely expected to win next month (the latest major poll has him leading his opponent by a 54-33 percent margin)? How much will he pander to the interests of large corporations?

    The first answer to those questions will come near the end of this year, when Brown either reappoints Michael Peevey to another six-year term as president of the powerful state Public Utilities Commission or jettisons him due to a wide public perception that the commission has become routinely corrupt during Peevey’s 12-year tenure.

          Peevey’s presence on the commission, which regulates natural gas and electric utility companies and their rates except where utilities are municipally owned, has long seemed a conflict of interest. A former president of the Southern California Edison Co., he and his commission consistently act in the interests of big utility companies. So he’s been likened to a fox guarding the henhouse (this column first called him that in 2005, three years after his initial appointment to the commission by ex-Gov. Gray Davis).

    One reason his career has seemed greased, with nary a problem getting confirmed by the state Senate, is that he’s married to Democratic state Sen. Carol Liu, whose district covers a wide swath of the San Gabriel Valley in suburban Los Angeles County.

          There are indications he may again prove immune to the conduct that has surrounded him for years. In one interview this fall, Brown called Peevey “a strong force…I know there’s been a lot poured out on this topic, but I would say he gets things done.”

          For many years, Peevey has presided over the nonstop kabuki-like dance performed by the PUC and companies like Edison, Pacific Gas & Electric and San Diego Gas & Electric. This theatrical exercise sees the utilities routinely ask for sky-high rate increases, knowing the PUC will knock it back, but they'll nevertheless get all they really want and expect each time.

          That sort of phony rate regulation has never hurt Peevey, even though it hits hard on most businesses and residents of the state. One reason he’s so secure is that PUC members, once appointed and confirmed, cannot be fired even by the governor who appointed them or any successor. Their terms are all but inviolate, regardless of their performance.

          But Peevey is in trouble now. Once it became clear that he informally advised PG&E on how to conduct itself after federal officials first pronounced the company “negligent” and then indicted it for a huge gas pipeline explosion that killed eight people in San Bruno in 2010, he recused himself from further proceedings relating to that blast and the penalties to be exacted on PG&E for it.

          He fired his chief of staff when emails revealed “inappropriate communications” between her and PG&E. But does anyone seriously believe a chief of staff would advise a troubled, regulated company without the full knowledge and approval of her boss? Peevey’s staff also allegedly helped PG&E decide which administrative law judge would hear a PG&E rate case deciding how much the company pays for gas pipeline repairs and how much its customers will be assessed. Of course, consumers have paid monthly for gas pipeline maintenance since the 1950s, but PG&E didn’t always use the money for that.

          Plainly, the PUC’s civil service lawyers and analysts do not believe Peevey was in the dark on all this. In one September staff meeting, they reportedly demanded he resign, with some likening him to “an untouchable mob boss.”

          Brown knows all this. He also knows Peevey consistently refuses to reveal how much some large new solar thermal power plants will cost, even though other commissioners labeled their price tags “exorbitant.” When those plants come online within the next two years electric bills will rise sharply.

          But Brown might not mind that. He’s an enthusiastic backer of all sorts of renewable energy projects, which Peevey has pushed hard – one reason why Brown thinks he “gets things done.”

          The problem is that most of what Peevey has done favors big corporations at the expense of their customers. If Brown reappoints him, he will be thumbing his nose at every consumer and Peevey would have another six years to coddle the companies he loves to favor.

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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, go to www.californiafocus.net