California Gov. Jerry Brown and members of the California legislature have agreed on a package of “sweeping” reforms designed to overhaul the California Public Utilities Commission (CPUC), increase transparency, and change how the CPUC conducts much of its business.
The changes come in the wake of repeated disclosures of illegal ex parte meetings and communications between CPUC members—in particular former president Michael Peevey—and the state’s investor-owned utilities. The meetings covered some of the most controversial subjects the CPUC has dealt with in recent years, including the fatal 2010 explosion of a natural gas pipeline in San Bruno and the premature retirement of the San Onofre Nuclear Generating Station (SONGS).
Too Cozy With Utilities
After disclosure of a 2013 meeting between Peevey and a Southern California Edison (SCE) executive in Poland during discussions over how much SCE would be allowed to bill ratepayers for shutting down SONGS, the CPUC came under intense criticism for conducting too much of its operations out of the public eye and being too close to the state’s utilities. Peevey—himself a former SCE executive—later resigned from the CPUC and is currently under criminal investigation by the state Department of Justice. Allegations that Peevey interfered with other power plant deals stretch back more than a decade.
“These reforms will change how this commission does business,” said Brown. “Public access to meetings and records will be expanded, new safety and oversight positions will be created and ex parte communication rules will be strengthened.”
“These reforms mark a new beginning for the CPUC. The commission will become transparent and accountable to Californians and focused on the safety of our communities,” said Assemblymember Mike Gatto, who has been one of the driving forces behind the effort to overhaul the CPUC.
The list of reforms cuts across nearly every facet of the CPUC’s operations. Some of the changes include:
- Oversight of a number of areas, such as transportation, will be moved to other state agencies.
- Various restrictions on information the CPUC is allowed to consider in its decision-making will be lifted.
- Former utility employees will be barred from serving on the Commission for two years.
- Other state agencies will be allowed to participate in CPUC proceedings.
- Restrictions on ex parte communications will be strengthened.
- Increase public access to CPUC records and place the CPUC under the judicial review provisions of the California Public Records Act, which allows members of the public to challenge a decision denying access.
- Create an ethics ombudsman position that will be responsible for ethics training for CPUC staff and who may be contacted at any time by staff or the public with ethical concerns.
Future of CPUC Still Uncertain
Brown last year vetoed a suite of bills designed to reform the CPUC on the grounds that more fine-tuning was necessary and that the bills tried to tackle too many changes at once. The most recent package is the result of months of negotiation following the veto.
Both houses of the legislature must still pass the reforms, and further changes are possible. In particular, critics of the CPUC want an outright ban on private meetings between the CPUC and the utilities. Currently, some types of ex parte meetings are allowed provided they are reported in a timely manner. (Peevey’s meeting over SONGS was not properly reported.) Gatto has promised to launch a ballot measure breaking up the CPUC if the reform package is not passed.
The CPUC released a statement saying it backed the reforms. “The reform initiatives warrant our support, and we remain committed to an outcome that will provide enhanced accountability and transparency, and allow us to concentrate on core regulatory functions that protect Californians.”
—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).