CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 20, 2015, OR THEREAFTER
BY THOMAS D. ELIAS
“INSURANCE ARRANGEMENT SHOWS PUC HASN’T CHANGED”
FOR RELEASE: FRIDAY, NOVEMBER 20, 2015, OR THEREAFTER
BY THOMAS D. ELIAS
“INSURANCE ARRANGEMENT SHOWS PUC HASN’T CHANGED”
State commissions, like people and
corporations, rarely change unless they’re given strong motivation; sometimes
change has to be forced on them.
The latest evidence now demonstrates
that the California Public Utilities Commission is no different. Gov. Jerry
Brown, who appointed all five current members of this scandal-plagued agency,
just over a month ago refused to sign a package of bills passed unanimously by
the state Legislature – every Democrat, every Republican – that would have
compelled the PUC to make a few small changes.
Like keeping records of all contacts
between commissioners, their staff and officials of the big utility companies
they regulate, including Pacific Gas & Electric, Southern California
Edison, Southern California Gas and San Diego Gas & Electric. Like writing
decisions in “understandable” language.
No big changes were involved in these
bills. Commissioners would still have had six-year terms and still could not be
fired even by the governor who appoints them. PUC decisions could still be
reversed only by appeals courts – where new evidence can only rarely be
presented.
What happens when you tell five
powerful commissioners they won’t have to change their behavior, when the
governor puts no pressure to resign even on a commissioner who helped PG&E
find the most sympathetic judge to hear the case involving its 2010 San Bruno
gas pipeline explosion that killed eight persons?
They don’t change. That is nowhere
better illustrated than in the first significant decision announced after the
Brown vetoes.
This case did not involve billions
of dollars as when the commission considers routine rate increase requests from
the utilities. The pattern there sees the companies invariably ask more than
any reasonable person or agency would think justified. New rates somewhat lower
than what was asked are then assigned and the PUC takes credit for “saving”
consumers money even though rates here continue at levels that already exceed
those in any other of the Lower 48 states.
The latest case involved a mere $400
million insurance settlement agreed to this fall by Southern California Edison,
the money to compensate its customers and those of SDG&E for higher rates
they paid after the San Onofre Nuclear Generating Station suddenly went bust in
early 2012 due to a decision Edison knew in advance was flawed.
When a $400 million windfall arrives,
the logical thing is to pass it on immediately to consumers, with almost all 8
million or so customers involved getting a lump sum of about $50. But no. As
with other settlements the PUC has fostered, this one will be doled out in tiny
increments, not amounts that might be meaningful to customers.
The current plan is for a rate
reduction of about 2.4 percent on monthly bills as long as the money lasts,
which could be anywhere from one to three years. During that time, of course,
Edison will likely get a routine rate increase far higher than this, rendering
the pittances doled out monthly even less significant.
Plus, the settlement is much smaller
than some similar ones over the years in other nuclear power incidents. Edison
spokeswoman Maureen Brown (no relation to the governor) would not reveal the
maximum possible payout under her company’s policy with Nuclear Electric
Insurance Limited. Meanwhile, most media simply accepted Edison press releases
calling the settlement a great benefit to consumers, some even borrowing the
headline the company suggested.
Butthe benefit to consumers would only
amount to pennies above $2 per month (before the next rate increase) if their
bills are about $100.
It’s the same kind of arrangement the
PUC okayed after the companies that created the California energy crunch of
2000-2001 were forced to cough up some of their illegal profits. As with this
one, payments to consumers were so small most barely noticed them.
At the same time, the utilities made
tens of millions of dollars in interest while holding onto the bulk of the
settlements until they were gone – pretty much the sort of thing that will
happen this time.
The PUC didn’t have to go along with
the utility’s plan for handling this money and it can still change the
longstanding pattern that favors the big companies over their customers. But as
long as no change in its culture is forced on it, don’t expect the agency to
change a thing.
-30-
Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is tdelias@aol.com
Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is tdelias@aol.com
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