From the San Diego Union-Tribune
February 19, 2016
PUC bias favors industry over public
By Kim Malcolm
File – In this Sept. 9, 2010 file photo, a massive fire roars through a mostly residential neighborhood in San Bruno, Calif., after a lethal 2010 gas pipeline explosion that engulfed a suburban San Francisco neighborhood in flames, killing eight people. (AP Photo/Paul Sakuma, File) The Associated Press
The California Public Utilities Commission (PUC) has been on the hot seat for more than a year over allegations of corruption that have motivated criminal investigations, ended careers and heightened fears about the hazards of utility facilities. Sadly, the allegations come as no surprise to me. I worked at the PUC for 25 years, mostly as an administrative law judge and professional staff to four commissioners, two of whom were appointed by our governor. I had a great career at the PUC and, although I rarely sat quietly on the sidelines, I am not a disgruntled former employee.
I left the commission in 2008 because I could not be effective. Among the experiences that led me to this conclusion: being removed as administrative law judge from a major energy case in response to utility lobbying and being removed from another major energy case the day after I told a commissioner I couldn’t promise to rule in favor of the utilities prior to hearing the case.
I was eventually informed that I would not be assigned to any cases the utilities cared about and I was admonished for allowing members of the public to speak at a (get ready for it) public hearing. But I didn’t feel singled out and that was the problem — I didn’t want to work in an organization that had become so explicitly compromised.
The PUC had changed by the time I left, but not so drastically, as recent events might suggest. Over the past 100 years, the PUC’s rules, policies and processes have evolved to give the captains of industry extraordinary influence.
The utilities may have let their pipeline systems crumble or botched a nuclear plant repair, but they have performed one job with great skill and success: stacking every card in the regulatory deck in their favor. The PUC’s culture of procedural complexity, regulatory double-speak and corporate cronyism puts every public-spirited intervenor at a disadvantage and has cowed some of the best.
The cost to Californians of regulatory capture is probably staggering. During the past 15 years — a period of underfunded education, high unemployment and aging infrastructure — the PUC approved utility proposals to spend billions of customer dollars on “smart” meters most customers will never use, approved “incentive awards” to the utilities for unsuccessful energy efficiency programs and rubber-stamped fossil-fuel power plants California doesn’t need. It is not surprising that the rates of California’s regulated utilities are among the highest in the nation. If you had been a residential customer of the Sacramento Municipal Utility District in 2014, your monthly electricity bill for 500 kilowatt hours would have been $58 instead of the $116 you paid SDG&E or the $93 you paid PG&E.
The PUC and the utilities it regulates are full of talented, dedicated employees, and the PUC has done some really good things over the years. The system, however, is broken.
In response to allegations of impropriety, bias and criminal activity, the PUC appears to have employed those time-tested strategies called circling the wagons, window dressing and rearranging the deck chairs. The PUC’s leadership seems to have forgotten the reforms it promised more than a year ago and its stated commitment to improved safety.
Six years after the San Bruno disaster, the PUC sat quietly for months while a SoCalGas storage facility spewed more than 85,000 metric tons of greenhouse gases into California’s air and endangered the lives of thousands of California residents. As if to confirm allegations that the PUC operates as if it were above the law, the PUC recently stated it would defy a court order to turn over public documents on the basis of its “ethical” obligation to ignore the court because, well, you’re not the boss of me.
In the future, PUC decision-makers and utility executives may be more careful about what they put in emails. But the state’s interest in consumer protection, public safety and the natural environment will continue to take a back seat to the politically connected and the too-big-to-fails unless the state makes significant changes to the PUC’s decision-making processes, redefines conflicts of interest and eliminates the revolving door.
It is hard to criticize an organization that is like family to me but it is harder to see what has happened to it. As some of my former PUC colleagues have said, we need to put the public back in the California Public Utilities Commission.
Malcolm formerly worked as a private consultant for California nonprofits on energy and environmental issues following a 25-year career at the PUC.
Editor’s note: The San Diego Union-Tribune editorial board invited the PUC to submit an op-ed. It has not yet.
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