CALIFORNIA
FOCUS
FOR RELEASE: TUESDAY, MARCH 31, 2015, OR THEREAFTER
FOR RELEASE: TUESDAY, MARCH 31, 2015, OR THEREAFTER
BY THOMAS D.
ELIAS
“WILL
LAWYER HIRING LEAD TO LOWER UTILITY RATES?”
It’s now possible that mid-February
will be remembered in years to come as a fateful time in the century-long
history of the California Public Utilities Commission. That’s when, without
offering any legal justification, the five commissioners spent public money to
hire a criminal lawyer.
If
courts find this move was as blatantly illegal as it looks to some, they may
soon cease treating this powerful but disgraced body that sets power and
natural prices for most Californians with the extreme deference they
traditionally have evinced.
Should
judges reverse this possibly illegal PUC decision, how long before they begin
looking askance at some of the commission’s other dicey rulings favoring giant
utility companies over their customers.
Right now, state and federal
authorities are investigating the commission and its immediate past president
Michael Peevey. Among tens of thousands of released emails are some showing
inappropriate, potentially illegal, contacts between Peevey, at least one
present commissioner, and high officials of regulated companies like Pacific
Gas & Electric Co. and Southern California Edison Co.
This was predictable from the moment
Peevey joined the commission more than 12 years ago, first appointed by
then-Gov. Gray Davis and later reappointed by ex-Gov. Arnold Schwarzenegger. No
one could reasonably expect Peevey, a former Edison president, to deal
objectively with his friends and former colleagues. It was a classic case,
first noted here in 2004, of putting the fox in charge of the henhouse.
The
lawyer-hiring decision shows that despite pious declarations from Peevey
successor Michael Picker about how “decisions should be based on the record
developed in public,” things may not have changed much since Peevey departed as
2014 ended.
With criminal investigations in full
swing, commissioners signed a $49,000 contract with the Los Angeles law firm
Sheppard Mullin, defense attorney Raymond C. Marshall of the firm’s San
Francisco office in the lead role. Marshall is charging a “discounted” rate of
$882 per hour. The $49,000 won’t go far at that rate.
The
commission has also used Walnut Creek lawyer Katherine Alberts to stonewall
requests for records of PUC communications about a 2014 settlement forcing
customers to pay $3.3 billion of the $4.7 billion cost for retiring the San
Onofre Nuclear Power Station, owned by Edison and the San Diego Gas &
Electric Co.
But California Government Code section
995.8 says that a “public entity is not required to provide for the defense of
a criminal action…” It adds that before hiring defense lawyers, an agency like
the PUC must formally determine such a defense “would be in the best interests
of the public entity and that (employees involved) acted...in good faith…and in
the apparent interests of the public entity.”
The PUC made no such determination and held no public hearings on hiring attorneys. Nor has it said who its criminal lawyers will defend.
This spurred a lawsuit from former San
Diego City Attorney Mike Aguirre and his partner Maria Severson. They want the
commission to reveal who its new lawyer will defend and hold hearings on
whether that’s in the public interest.
Aguirre said other commission
decisions may have been made improperly, even criminally, including the San Onofre
settlement. Another he cited was a ruling last November assessing a measly $1
million fine against multi-billion-dollar PG&E, also cutting its natural
gas rates by $400 million a year as penalties for its conduct around the
aftermath of the 2010 San Bruno gas pipeline explosion that killed eight
persons. Even new commission president Picker, who voted for those penalties,
now says the company should pay much more.
Aguirre
also questioned a $14 million settlement with SDG&E after a 2007 fire ignited
by power lines downed because of poor maintenance. That blaze destroyed 1,500
homes in northern San Diego County.
The courts' traditional deference to
the utilities commission has never before encountered criminality in commission
conduct of its business. Meanwhile, the commission refuses to answer questions
about its legal authority for hiring outside criminal lawyers.
All of which means utility regulation
in California has moved into a state of high flux. Who knows? It might soon be
open season on those other questionable decisions and more and that could lead
to rolling back some of California’s sky-high utility rates, which are at just
as onerous and compulsory as high taxes.
-30-
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
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