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PUC Reform Vetos Send Wrong Message:

There’s something crazy when the most powerful agency in California government spends an entire year mired in scandal caused in large part by inadequate controls over the activities of its key people – and not a single reform emerges.

That’s the end result of Gov. Jerry Brown’s veto of a package of bills that handily passed the Legislature this fall aiming to fix aspects of the state Public Utilities Commission, even if those bills themselves had some flaws.

The net upshot is that Brown has yet to utter a negative word about the overtly crooked activities of former PUC President Michael Peevey and others at the commission, even complimenting Peevey on “getting things done” at the time he departed the commission in disgrace.

The PUC is the most powerful of state agencies because it controls what consumers pay for electricity and natural gas provided by private companies like Pacific Gas & Electric, Southern California Edison, Southern California Gas and San Diego Gas & Electric. The agency also makes some key decision affecting water and telephones. Unlike all other state commissioners, PUC members serve six-year terms and cannot be fired even by the governor who appoints them.

No one would seriously claim the bills Brown vetoed were perfect. For example, they did not include the most important reform that should have emerged from the scandals: making PUC decisions reviewable in Superior Court, and not only in appeals courts or the state Supreme Court, as they are today.

But some changes in these bills could have been valuable, including creation of an independent inspector general assigned to make sure commission actions and processes are fair and legal. There is now virtually no oversight at all.

So-called “ex-parte communications” – telephone calls, emails and other contacts between commissioners and staff and executives of the utility companies they regulate would have had to be reported on the PUC’s website. The problem with this was that there would have been no way to make sure all private contacts were reported.

Kevin Liao, a top aide to Democratic Assemblyman Anthony Rendon of Lakewood in Los Angeles County, author of most of the package and soon to assume the powerful office of Assembly speaker, reported that the possibility of suing the PUC over its decisions in Superior Court was removed from Rendon’s reforms in the Assembly Appropriations Committee despite his protests.

The weakened reform package nevertheless was too strong for Brown, who said in veto messages that “I support the intent of these bills…”

Just not enough to prevent repetitions of the extra-legal contacts between PUC members and utility executives which resulted in favored treatment for PG&E in its attempt to fight off punishment for the 2010 San Bruno gas pipeline explosion that killed eight persons.

Emails show similar contacts between Peevey and Edison executives produced the outline of a settlement that now stands to cost consumers $3.3 billion, or about three-fourths what it will to retire the San Onofre Nuclear Generating Station, which failed because of decisions made by other Edison executives whose own emails show they knew those decisions would ruin the plant.

The amounts involved in those cases were similar to the billions of consumer dollars routinely dunned by the PUC. Example: One current PG&E proposal before the PUC calls for a $2.7 billion rate hike over three years.

Rendon said his aim was to create more transparency in the PUC’s business. But Brown has seen to it that won’t happen for at least a year, if then. He even killed provisions forcing commissioners to write their decisions in “understandable” language.

Clearly, the culture of the PUC needs serious change, but even the few changes in the vetoed bills were too much for Brown.

The fact is that Peevey, a former Southern California Edison president, had a conflict of interest from the moment ex-Gov. Gray Davis first appointed him in 2002. Brown might also have one: His sister, former California state Treasurer Kathleen Brown, serves on the board of Sempra Energy, owner of both Southern California Gas and San Diego Gas & Electric.

All of which means the ground rules of the dance long conducted by the PUC and the large private utility companies it regulates still have not changed even a little because of the current scandal.

The only remaining question is how long Brown will continue to suborn the blatant corruption of this powerful, but often rogue, agency.

in Opinion
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