After 12 years of favoring big utility companies over individual consumers, Michael Peevey has at last left the California Public Utilities Commission. But many of his ill-considered, some say corrupt, decisions will linger on.
Peevey departed in a carefully stage-managed mid-December commission meeting, forced by scandal to abandon previous plans to seek reappointment by Gov. Jerry Brown for another six-year term.
Just how problematic was the Peevey reign (in many ways, he really did rule over the commission like some kind of potentate)? The scandal that finished his tenure involved buddy-buddy email, in-person and voice exchanges with executives of big companies he regulated, especially Pacific Gas & Electric Co. The notes contained assurances PG&E would do just fine in whatever proceeding was current at the moment, that its solid profits would not be cut.
So when the commission last fall fined PG&E for its conduct after the 2010 San Bruno natural gas pipeline explosion that killed eight persons and destroyed 38 homes, Peevey could not vote. But his influence was clearly felt when remaining commissioners levied a paltry $1 million fine, a pittance for PG&E, less than most of the blown-up homes were worth.
In the same session, Peevey took part in the unanimous vote to approve a settlement awarding Southern California Edison more than three billion consumer dollars over 10 years to pay for its colossal error that caused the premature retirement of the San Onofre Nuclear Generating Station. Also voting for the settlement was Michael Picker, later named by Brown as commission president.
Emails have shown that Edison executives knew beforehand that steam generators they installed at SONGS were fatally flawed. When executive misdeeds are so egregious, why should customers pay anything? Why not force the company to foot the entire bill for its irresponsibility? One reason might be that Peevey is a former president of that company. Another might be that the administrative law judge presiding over that case spoke privately with an Edison executive before recommending the settlement. That’s the very definition of judicial misconduct.
All this is in keeping with the revolving door that’s been allowed by governors from Brown (in his first two terms) to Gray Davis (who first made Peevey the PUC president) to Arnold Schwarzenegger (who reappointed him). The revolving door goes the other way, too: an early Brown choice as PUC president was John Bryson, later Edison’s chief executive for decades. Was that plush job a reward for previous favors?
The PUC has never addressed any of these questions, and a former San Diego city attorney is now suing to get the SONGS settlement reversed.
Other lousy Peevey decisions also live on. There’s the state’s big emphasis on solar thermal energy rather than rooftop solar, which assures not only high costs for gigantic, inefficient solar arrays in desert locales, but also guarantees 20 years of high utility company profit margins on the costs for power lines needed to bring the solar power to its eventual users.
One such development, being built by Spain’s Abengoa S.A. near Boron in the Mojave Desert to supply PG&E customers, will be so expensive the PUC has not yet dared reveal its actual price. When the cost is revealed, it will be too late for consumers to do anything.
Another is a “peaker” power plant in San Diego which local consumer advocates insist is completely unneeded. Voted down the first time the PUC considered it, this project was later approved after some Peevey bullying.
Meanwhile, Californians can be glad another Peevey move was frustrated. That was his attempt to abandon much of the state’s reserved space on pipelines bringing natural gas from Texas, Oklahoma, Wyoming and Colorado and instead import liquefied natural gas (LNG) from Indonesia and Australia.
This would have left California without any of the price benefits of the recent gas production boom that dropped prices radically in the last year. Peevey was thwarted when the state Lands Commission refused to allow an LNG importing plant offshore near Oxnard in Ventura County.
The way Peevey left drew more attention and heat than the commission has seen in the last half century. Consumers can hope the spotlight stays on and pressures successor Picker and his colleagues into a new sense of fairness.