Thomas Elias: The cow has already got out of the barn on public utility rate reform

6 Jul

I found this article by columnist Thomas Elias on the Marysville for Reasonable Water Rates Facebook page, but I never found it in the ER. He is going over the recent reforms made by the state legislature following the scandal involving California Public Utilities Commission President Michael Peevey. Peevey was in the pocket of PG&E for years, as revealed by e-mails he’d sent them, advising them in various legal matters. He was supposed to protect us, but all the while plotted with PG&E and probably other for-profit utility companies to screw us. 

I agree with Elias – these reforms are no-brainers, but may be too late to help.

http://www.appeal-democrat.com/opinion/thomas-elias-puc-reform-bills-are-too-little-too-late/article_f4948cc8-1eda-11e5-9a11-bb46e46fafcd.html

It’s the same with the state Public Utilities Commission these days as with almost everything else: By the time state legislators notice something is a problem, things are so bad, so extreme that other people and agencies have already acted.

Just now, almost six months after state and federal investigators executed search warrants on the homes of former PUC President Michael Peevey and a since-fired Pacific Gas & Electric Co. executive for whom Peevey would apparently do just about anything, lawmakers are finally ready to act.

 Unfortunately, their action is redundant, coming long after the cows have left the barn.

Dollar bills, often rolls of 100-dollar bills, are equivalent to the cows in this metaphor. And the barn is the equivalent of the wallets and bank accounts of tens of millions of customers with gas, electric and water companies regulated by the utilities commission.

For many years before scandal broke, the PUC under Peevey and several predecessors maintained a steady pattern favoring the interests of regulated, privately-owned corporations over those of the consumers they serve.

This pattern extended from pricing to maintenance and safety concerns, from easy OKs of power plant siting to lack of concern over nuclear safeguards at the now-closed San Onofre Nuclear Generating Station and the Diablo Canyon nuclear power station. It has cost consumers billions of dollars over decades, costs that climb each day.

This has been achieved via a sort of kabuki dance, where utilities routinely ask far more in rate increases than they know they’re entitled to. The PUC responds by cutting the requests, still giving utilities larger increases than reality justifies. Then both the commission and the companies brag about being “consumer-friendly.”

The dance went on unchecked for decades, legislators paying virtually no heed. The lawmakers also routinely rubber-stamped appointees to the commission named by current Gov. Jerry Brown and predecessors like George Deukmejian, Pete Wilson, Gray Davis and Arnold Schwarzenegger.

Each commissioner then served a six-year term without even the possibility of being fired for one-sided rulings.

Now, long after this column exposed the corrupt pattern and with a federal grand jury working on this case, at long last comes a state legislator to “do something” about the PUC. That’s Democratic Assemblyman Anthony Rendon of Lakewood. One of his bills would set up an inspector general at the commission, empowered to investigate its activities.

Another would outlaw secret contacts among commissioners and utility executives by requiring publication of all communications between them during rate-setting proceedings. Such “ex parte” contacts have long been illegal, but no one paid attention. So phone calls and private dinners like those documented involving Peevey, current Commissioner Mike Florio and executives of PG&E and Southern California Edison continued with impunity until earlier this year, when scandal broke.

The Rendon bills are too little, too late. Far better to give the commission’s existing Office of Ratepayer Advocates some real power to fight and expose the ongoing misdeeds of the PUC. Rather than set up a new inspector general, why not make the existing advocacy office independent?

And with no ability for consumers to protest PUC decisions anywhere but in appeal courts, it’s now far too difficult to do anything about wrongheaded, one-sided commission rulings. Why not allow consumers to sue in trial courts, where they could present evidence rather than being confined to working with evidence developed during the PUC’s own proceedings, where administrative law judges have been exposed lately as subject to occasional bias?

Those are simpler, less expensive changes than what Rendon proposes, the only legislative fixes for the PUC now proposed.

Even more important to cleaning up this long-corrupt agency would be for legislators to put a spotlight on any appointee proposed by any governor. Also, if lawmakers would hold meaningful, thorough hearings on the PUC’s questionable actions. This is already within their power, but even with the scandal in progress, it still does not happen. Lawmakers show no appetite for contesting any proposed commissioner or any commission actions. That’s how consumers got stuck with Peevey, a former Edison president whose corrupt practices were easy to foresee.

So, yes, the Legislature can and should do something about the PUC, but the best thing it could be is wake up and perform the watchdog duties it has neglected for decades.

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