Gov. Jerry Brown appears poised to sign legislation that would address some of the California Public Utilities Commission’s long-standing failures of transparency and accountability highlighted in a recent inewsource investigation.
A much broader set of reforms touted by Brown and many legislators never made it to the governor’s desk, dealing a blow to critics who demanded more substantial changes to the state’s most powerful regulatory agency.
The commission, which oversees private utilities, has been under intense scrutiny for the past few years. Its handling of the 2010 San Bruno pipeline explosion and the 2012 closure of the San Onofre nuclear power plant have prompted state and federal investigations. Both of those probes center on the agency’s cozy relationships with utility executives and how they may have cost California ratepayers billions of dollars.
SB 215 is one of the bills currently awaiting the governor’s signature. The measure would strengthen requirements for reporting private meetings between utility officials and state regulators and impose civil penalties for commission employees who violate the rules. Among other reforms, the bill would make it easier to disqualify biased commissioners from voting.
“This changes how the commission will do its business,” said Sen. Mark Leno (D-San Francisco), the bill’s co-author.
“There are many changes here that represent concrete steps forward that will assist the commission in doing its job with greater transparency,” Matt Freedman, staff attorney for The Utility Reform Network, said in June as the bill was moving through the legislature. “They’re modest but truly meaningful reforms that hopefully should go a long way toward improving the culture of the commission.”
If this bill had been law 12 years ago, San Diego’s energy picture might look quite different. In an investigation earlier this year, inewsource reported how Michael Peevey, the utility commission’s embattled former president, intervened to create a deal in which San Diego got two power plants — one in Escondido and the other in Otay Mesa — even though the CPUC’s own experts said the region needed only one.
The deal set the stage for years of similarly tainted agreements that helped determine what San Diego County residents pay — or overpay — for power to this day.
Back then, when the commission president’s role was challenged and ratepayer advocates tried to get him removed from decision-making, he himself denied that recusal.
That couldn’t happen under the law on the governor’s desk. If SB 215 is signed, a commissioner will not be able to rule on a motion for his or her own disqualification.
Another bill, SB 512, is also awaiting action by Gov. Brown. That legislation seeks to increase transparency by requiring the commission to make more information available online. It would also require the agency to reach out to communities likely to be affected by a decision before starting a proceeding.
Gov. Brown has until the end of September to sign or veto the legislation.
The governor was expected to be considering far more dramatic reforms. Here’s a chronology:
Last October, Gov. Brown drew sharp criticism when he vetoed a package of CPUC reform bills, including a much stronger version of SB 215 that would have banned private meetings between utility officials and state regulators.
The legislature’s ire at this veto and the appetite for major change in California was made clear in February when Assemblyman Mike Gatto (D-Los Angeles) introduced a bill to essentially blow up the commission and divvy up its responsibilities among many other state agencies.
After this show of force, in June, Gov. Brown announced an agreement he reached with Gatto, Leno and other legislators to reform the agency. With the governor and the legislature on board, major reform seemed a sure bet.
AB 2903, introduced by Assemblyman Mike Gatto (D-Los Angeles), would have appointed an internal auditor at the commission to improve transparency and accountability. It also would have required the CPUC to appoint an ombudsman to monitor ethics at the agency and create a position for a new deputy executive director for safety, or “safety czar.”
But the measure died in the state Senate.
In an interview with inewsource, Gatto said he was shocked that the bill failed to reach the governor. He placed some blame on Senate Minority Leader Jean Fuller (R-Bakersfield) for blocking a key vote on the bill, but added: “I don’t think it was just her.”
Fuller’s office did not respond to a request for comment.
Gatto, who chairs the Committee on Utilities and Commerce, said his office is still investigating why a bill with such broad support died in the legislature.
“Clearly something that was orchestrated happened,” he said, noting that he’s “heard nothing” from the governor on the bill’s death. “It was a set of comprehensive reforms. I surmise that some pretty powerful people didn’t like them.”
We'll let you know when big things happen.