It's time to overhaul an incompetent state

April 24, 2013 

Assembly members blasted Paul Clanon, executive director of the California Public Utilities Commission, last week for tolerating a cozy relationship with utilities while ignoring safety.

The lawmakers' anger was clearly justified, but their aim was too narrow. Commission President Michael Peevey and the governor deserve to share in the shellacking, as does the Legislature itself.

More than two years after the deadly San Bruno natural gas pipeline explosion that killed eight people and leveled a Bay Area neighborhood, safety is still given short shrift by the PUC, as a new report documents in shocking detail.

In fact, safety is an afterthought — lowest on the list of the regulatory agency's priorities. It comes after affordability, energy reliability and environmental concerns.

Those are the conclusions contained in the scathing report prepared by Folsom-based Business Advantage Consulting. Hired by the PUC itself, the firm was asked to identify the barriers to a much-needed cultural change at the agency.

Relying on interviews with insiders, top PUC staff, middle managers, supervisors and front line workers, the report describes an agency controlled by the utilities it regulates and one with little regard for safety. The quotes from PUC staffers in the report are as disturbing as they are revealing:

• "The regulated industries and lobbyists come to the PUC and see how casual the attitude and culture is here. As a result, they don't feel they have to comply — they are not worried."

• "There is a disincentive for staff to tackle safety. It would mean taking on more work by myself for no reason and without support."

• "Safety staff doesn't feel like they are a valued part of the agency. Commissioners don't talk to them."

Even when money is allocated for safety, no one at the PUC checks to see if the funds are spent for that purpose. Safety initiatives ordered by the agency are not followed up on.

Fines for safety violations are rare and too low, regarded by the industry as just the cost of doing business, one PUC staffer confided.

The Safety Enforcement Division lacks resources and personnel trained to understand complicated safety needs.

While Clanon's shortcomings are a fair target of criticism, the bulk of the blame for safety lapses lies with his boss, longtime PUC President Peevey. A former utility company executive who's been at the helm of the agency for a decade, Peevey has fostered a climate of accommodation toward utilities, with the resulting disregard for safety. Gov. Jerry Brown, who reappointed Peevey despite strong objections from consumer advocates, shares responsibility.

Fixing the PUC won't be easy. The 100-year-old agency is embedded in the state constitution. The Legislature might best reform this institution by creating a blue-ribbon commission to examine both the PUC's mission and its governance structure.

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