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.
But the 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.
