PUC Critics Cite Concerns Over ‘Revolving Door’

by George Avalos, San Jose Mercury News

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While California’s powerful Public Utilities Commission has taken steps to address controversies over its oversight of the state’s utilities, state lawmakers and critics of the agency urge it to adopt tougher rules on a huge obstacle to reform: the revolving door between the PUC and the power industry.

Over the past 20 years, a number of high-ranking officials at the state Public Utilities Commission – including its top boss for 12 years, Michael Peevey – joined the agency after working for utilities that the PUC regulates, or landed jobs in the power industry after stints at the PUC. That includes at least two current staff members whose emails with utility executives were among tens of thousands that revealed the cozy relationship between the agency and utilities, including PG&E.

Reform proponents point to several examples to argue that stronger rules are needed to shut or at least slow down the door:

  • In 2008, Peevey intervened in a rate case involving his former employer, Southern California Edison, and the utility ended up with hundreds of millions of dollars more from ratepayers.
  • In several instances, PG&E executives who came from the PUC worked closely with their former colleagues to shape policy and influence decisions to set the utility’s rates, and they often received advance notice of pending action by the PUC.
  • Current PUC staffer Marzia Zafar, a former executive at an energy company, bantered with utility officials about shutting off the microphone of a long-winded PUC commissioner, and joked about returning to her old job, a sign to critics of what they say is the too-close relationship between regulators and the regulated.

“Peevey created an atmosphere at the PUC where it was known that if you serviced the needs of the utility industry, you would be advantaged at the PUC or you’d get a job in the utility industry,” said former PUC Commission President Loretta Lynch. “The revolving door really perverts the purpose of the PUC. And the ones who inevitably lose in this are the ratepayers.”

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