California Regulator Michael Peevey’s Legacy Debated
Friday, December 26, 2014
During his 12 years as president of the powerful California Public Utilities Commission, Michael Peevey was both the darling of energy insiders and the bane of consumer groups.
“Your real legacy is the dedication to actively confronting greenhouse gas emissions,” said Jan Smutny Jones, chief executive officer of The Independent Energy Producers Association as he addressed Peevey during a public meeting this month. “For you, climate change is real and action must be taken.”
Trade group leaders, union members and business owners touted Peevey’s accomplishments for two hours at his final meeting. They praised Peevey’s support of minority-owned businesses and his push to expand broadband access.
The only scent of the scandal surrounding Peevey in recent months came from former Commissioner Timothy Simon.
“You are a target because you are an agent of change,” Simon said. “You are a target because you challenge the status quo.”
Ratepayer advocates dispute that characterization.
The commission’s job is to regulate energy companies, protect consumers and make sure rates are reasonable.
Consumer groups said emails released this year confirmed their worst suspicions — that Peevey’s loyalty to the power companies trumped his duty to shield customers.
In an email this past spring, Peevey seems to be giving public relations advice to Pacific Gas & Electric. He sent the email one day after a federal indictment accused the company of violating safety rules. The indictment stemmed from a 2010 gas pipeline explosion in San Bruno that killed eight people.
Peevey criticized PG&E’s decision to issue a news release anticipating the indictment. He wrote that “this meant that the public got to read two big stories rather than one. I think this was inept.”
In another email with PG&E, Commissioner Mike Florio appears to be agreeing with Peevey in discussing pipeline pressure for the company.
The emails violate PUC rules. The emails and other contacts between the PUC and PG&E are the subject of federal and state investigations.
One email showed Peevey hitting up a PG&E executive for contributions to celebrate the PUC’s 100th anniversary, while also noting an upcoming decision on electricity rates.
“In my book, that is extortion,” said Jamie Court, president of the Santa Monica-based Consumer Watchdog. “There’s no question these documents show Michael Peevey as the Charlie Sheen of utility regulation. He’s a bad boy.”
Court said Peevey has a long history of close ties with utility executives.
“I don’t know why anyone would have expected any differently given the fact that Peevey ran SoCal Edison for a long time,” Court said.
In the 1980s, Peevey was president of Southern California Edison.
His former post has left many questioning the PUC’S impartiality in cases involving San Diego electricity consumers.
Customers continue to pay for the failed steam generators purchased by Edison and SDG&E at the now shuttered San Onofre nuclear facility. State regulators never fully investigated what caused the equipment to malfunction or who was at fault, attorney Maria Severson said.
Severson is suing the PUC and Edison claiming they’re illegally collecting money from ratepayers.
”Can you imagine being asked to pay a bill before you’ve even determined whether you’re on the hook for the bill?” Severson asked. “It makes no sense. You have to ask why that is. That can only be explained by the cozy relationship these commissioners have with the utilities.”
Consumer activists have also slammed Peevey and fellow commissioners for how they handled the investigation into the 2007 wildfires in San Diego that killed two people and destroyed 1,300 homes. State investigators found that SDG&E power lines started the fires.
But the PUC never held evidentiary hearings to determine whether the company had violated safety rules. Instead, SDG&E paid a $14 million settlement following closed-door talks with PUC representatives.
Peevey did not respond to a request for comment for this story.
As he gave up the commission gavel this month, he appeared to be referencing the controversy surrounding him.
“I surrender,” he said. “Don’t shoot. I surrender.”
PG&E and Edison did not respond to a request for comment. SDG&E declined to comment.
In October, Gov. Jerry Brown called Peevey’s emails with PG&E troubling.
“I would say, whatever problems there are, they’re coming to light, and I think over the next year we’ll be in a very good position, particularly with fresh eyes and new leadership, to get to a much better place,” Brown said.
This week, Brown picked Commissioner Michael Picker to replace Peevey as the PUC president. Picker is Brown’s former renewable energy adviser. He has promised to establish a field investigative team and enforce safety rules.
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