GOVERNOR BROWN VETOES ALL CPUC REFORM BILLS

October 13, 2015 (Sacramento) - Governor Jerry Brown has vetoed six bills that sought to reform the California Public Utilities Commission (CPUC) , which has been the subject of two criminal investigations amid mounting evidence of corrupt practices.

In his veto statement, the governor called the reforms too costly and complicated, stating, “Unfortunately, taken together there are various technical and conflicting issues that make the oer 50 proposed reforms unworkable. Some prudent prioritization is needed,” said Brown, whose sister, Kathleen Brown, serves on Sempra Energy’s board of directors.

One of the measures vetoed was Senate Bill 660, authored by Senator Mark Leno and coauthored by Senator Ben Hueso, whose district includes San Diego and the southern portion of East County. In a press statement, Senator Hueso said he is disappointed in the veto, adding, “Without SB 660, the agency has little incentive to work toward a culture of openness and accountability.” He pledged to work with authors of the bill and stakeholders to propose new reforms in 2016.

Senator Leno issued this statement in a press release. “Ratepayers have already paid dearly for California’s failure to act, and the status quo is simply unacceptable. We have an important opportunity to shut the door on improper communications and cozy relationships between regulators and utility executives. Revelations of backroom deals and breaches of transparency have undermined public trust and weakened public safety.” Leno added that his reform efforts will continue.

Among other things, SB 660 would have banned back-door communications between CPUC commissioners and the utilities they regulate. Public records searches have revealed that after the deadly San Bruno pipeline explosion in 2010 leveled a neighborhood and killed eight people, the CPUC was forced to release about 65,000 communications documents that revealed backdoor communications with Pacific Gas & Electric (PG&E).  The records showed the CPUC advised the utility how to handle controversies and discussed helping to choose a judge in a rate-setting hearing.  This apparent violation of both the law and public trust led to criminal probes that remain ongoing by the the California Attorney General's Office and the U.S. Department of Justice are looking into the agency’s relationship with utilities.

Similarly, California Edison has admitted to secret meetings with CPUC regulators in Poland to talk about a settlement of costs for shutting down the San Onofre nuclear power plants—issues that are supposed to be discussed only in public meetings. Consumer groups have asked the CPUC to set aside a settlement deal that sticks ratepayers with much of that cost and to punish Edison for its actions, but thus far the CPUC has not done so.

The bill addressed what critics have called a “governance problem” within the CPUC. The bill would have set new rules and penalties to curb improper communications between the Commission and the companies it regulates. It also would have created stronger standards for determining when a commissioner should be disqualified from a case due to bias. The legislation was sponsored by TURN, The Utility Reform Network.

Mark Toney, executive director of TURN, observes, "Hundreds of TURN supporters wrote to Governor Brown to urge him to sign this bill. Since the fatal San Bruno gas pipeline explosion five years ago, consumers have been shocked by the Commission’s laxity and corruption. This bill would have brought about the change the public wants.”

SB 660 would have implemented many of the recommendations contained in a June report commissioned by the CPUC itself and conducted by a law firm.  The CPUC’s own report concluded that ex-parte communications within the agency unfairly bias key decisions and should be banned.

Bills vetoed by Governor Brown would also have allowed groups or individuals to sue the CPPUC in Superior Court for failing to turn over records under California Public Records Act requests.  But Governor Brown contends that would result in “increased litigation and likely delay commission decision-making.”

Brown also axed a proposal to create a position similar to an inspector general to oversee the utilities commission – answering to an outside agency that the commission does not control.

Locally the CPUC has also come under fire for its handling of lawsuits over the 2007 wildfires, allowing a former SDG&E attorney to serve as an administrative law judge and blocking efforts by fire survivors’ attorneys to depose SDG&E executives.

San Diego attorney Mike Aguirre has filed numerous public records requests and is currently suing both the CPUC and Edison to reverse the San Onofre settlement and adopt one that is fairer to ratepayers.

The San Diego Union-Tribune reports that Aguirre drew this conclusion after the Governor’s actions.  “Jerry Brown’s vetoes show he is helping—not stopping—the dishonest practices known to the people of California.”