August 14, 2014

Our View: It’s time for state’s top utilities regulator to move on

It’s time for the California Public Utilities Commission’s Mike Peevey to step aside as president ... or be fired.

It’s an enduring mystery how Michael Peevey manages to keep his job as president of the California Public Utilities Commission. The CPUC is supposed to be a watchdog over companies and agencies that operate as monopolies. Without government oversight, such companies can run roughshod over their customers – who have nowhere else to turn.

That includes, most prominently, providers of electricity and natural gas, such as Pacific Gas & Electric Co. It was PG&E’s antiquated gas pipes beneath the city of San Bruno that ruptured in 2010, resulting in a horrific fire that killed eight people. It also includes Southern California Edison, where Peevey was a top executive until retiring.

Peevey has been the president of the CPUC for more than a decade, which includes the period of the San Bruno explosion. While an acknowledged energy expert, he has been – and continues to be – a colossal failure when it comes to protecting consumers.

Recent revelations have shown an inappropriate relationship between Peevey and those he is supposed to oversee. In emails, he is seen scolding and second-guessing a PG&E executive over how the utility handled news about the federal indictment stemming from the San Bruno explosion. One of his emails prompts the response: “love you.”

That, in turn, prompted Rep. Jackie Speier, D-Hillsborough, to say: “If Mike Peevey wants to be a consultant to PG&E, then he should resign.”

It’s abundantly clear Peevey regards utility company executives as peers and partners. Rather than creating a culture of rigorous oversight, he takes overseas junkets and Napa Valley wine tours with energy industry executives.

After the San Bruno tragedy, a blue-ribbon panel investigated the CPUC and found that the commission’s practices and culture were highly flawed. Emphasizing that point, outgoing Commissioner Mark Ferron told the Los Angeles Times, the CPUC is “hopelessly outgunned.” He said there is a “serious governance problem at the heart of the agency.” The heart of the CPUC is where Peevey operates.

The National Transportation Safety Board investigated the San Bruno explosion, too. It concluded the commission failed to provide proper oversight of PG&E.

In 2013, a consulting firm hired by the CPUC issued a scathing report about the commission. The consultants described it as being controlled by the utilities it regulates and said there was little regard for safety.

Also in 2013, an audit by the nonpartisan state Legislative Analyst’s Office uncovered “significant weaknesses” in the commission’s budgeting processes.

The city of San Bruno has demanded Peevey recuse himself from any proceeding involving its case; instead, he put himself at the center of it.

This is a sampling of Peevey’s failed leadership. You could go back further and find more errors in judgment and other examples of him looking out for the utilities at the expense of ratepayers.

Gov. Jerry Brown should have asked for Peevey’s resignation by now. But Peevey, who is married to state Sen. Carol Liu, apparently has many friends in high places.

Peevey’s term ends in December. But the president of the CPUC serves at the governor’s pleasure. Gov. Brown should send a clear signal of his intent not to reappoint Peevey by removing him as president of the commission now.

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