SB 215 Sustains Drive For CPUC Reforms Originally Sought In SB 660

January 25, 2016

1/27/2015 Update: The Senate approved SB 215 (Leno) in a 37-0 vote yesterday (with no votes recorded for Senators Bates, Liu and Wolk). The bill awaits committee action in the Assembly. SB 215 incorporates CPUC reforms CFC had sought in SB 660 (Leno), which had passed unanimously in both the Assembly and Senate last fall but was vetoed by Governor Jerry Brown along with several other CPUC reform bills.  

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JUNE 29 – Consumer Federation of California (CFC) supports Senate Bill 660 (Leno-Hueso), a long-overdue reform that would put a stop to the scandalous record of backroom deal-making between the California Public Utilities Commission (CPUC) and the utilities it regulates.

The measure seeks to rein in the power of an imperial CPUC presidency, establish rules to disqualify commissioners from participating in proceedings where they have a real or perceived bias, and strengthen reporting of private meetings (“ex parte” communications) between utility lobbyists and key CPUC decision-makers.

“This bill would put an end to the backroom deals that needlessly drive up the cost of energy bills so that the CPUC fairly can fulfill its obligation to provide safe, clean, reliable energy at reasonable prices to all California residents and businesses,” CFC Executive Director Richard Holober wrote to Senator Leno in support of SB 660. “This bill institutes critical reforms needed for the CPUC to put the public interest ahead of the corporate interest when it comes to providing affordable energy that is safe, reliable and clean.”

Background

By any measure, the CPUC is a mess:

  • The U.S. Department of Justice and California Attorney General have opened criminal investigations of the agency. State investigators raided the homes of former CPUC President Michael Peevey and a former PG&E executive in February, seizing computers and other materials.
  • Some 65,000 emails, released under court order, document a pattern of pettiness, collusion and possible criminal activity between CPUC and the Pacific Gas & Electric Company (PG&E) over a five-year period. Among the concerns is evidence of “judge-shopping” to ensure that regulatory cases go to administrative law judges who are sympathetic to utility interests.
  • Payment for the decommissioning of the closed San Onofre nuclear plant was negotiated on the sly a half a world away by a jet-setting CPUC President and a Southern California Edison executive, with ratepayers shouldering $3.3 billion of the costs compared to the utilities’ $1.4 billion share. CPUC’s own quasi-independent Office of Ratepayer Advocates now says that Southern California Edison and San Diego Gas & Electric should put in $648 million more.

But the weightiest measure by far is the explosion of a PG&E natural gas pipeline in the Bay Area community of San Bruno in 2010. As an Office of Legislative Counsel analysis of SB 660 noted:

“Eight people died, dozens were injured, 38 houses were destroyed and many more were damaged. The investigations by the National Transportation Safety Board (NTSB) and an independent review panel appointed by the CPUC found that PG&E mismanaged their pipeline over decades, failed to adequately test the strength of the pipeline and, more generally, valued profits over safety. These same investigations also noted the CPUC’s inadequate oversight of PG&E.”

CPUC’s Safety and Enforcement Division recommended $2.25 billion in fines against PG&E for the explosion and shoddy work that contributed to it. The commissioners instead fined the utility just $1.6 billion – still a record, but a significant reduction that some would attribute to the long history of cozy relations between utilities and the state agency that oversees them.

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