Proponents say government control will lead to cheaper utility rates and faster adoption of renewable energy.

This month, more than 950,000 homes and businesses in Los Angeles and Ventura will shift to a community-choice program – the Clean Power Alliance. It will be the state’s 20th and largest community-choice provider, which will then provide power to nearly 3.6 million customers in the Golden State.

Those numbers could drastically grow in coming years. Both San Diego Mayor Kevin Faulconer and Dianne Jacob, chair of the San Diego County Board of Supervisors, have endorsed community-choice programs. Many other local governments are watching how the programs work in places that have already adopted them.

SDG&E says it welcomes infrastructure-only role

To the surprise of many industry watchers, one of the state’s three giant investor-owned utilities isn’t fighting this development.

After San Diego began taking steps toward a community-choice program last year, San Diego Gas & Electric made clear its interest in getting out of energy procurement. Earlier this month, Kendall Helm, SDG&E’s vice president of energy supply, told the Los Angeles Times that the decision was straightforward.

“We don’t think we should be signing big, long-term contracts for customers that have made a conscious choice to be served by a different” provider, Helm said. “We think our primary role and our primary value is in the safe and reliable delivery of that power.”

Pacific Gas & Electric and Southern California Edison continue to defend the status quo and to work with the California Public Utilities Commission and SDG&E on “exit fees” assessed to departing customers to make sure they help pay for maintaining energy infrastructure. But PG&E, now in bankruptcy and facing possible dissolution by the CPUC because of repeated scandals, has dropped its once-aggressive opposition to the very idea of community-choice energy, including sponsoring a failed state ballot measure on the issue in 2010.

CPUC president fears programs could fail, cause havoc

But California’s most prominent regulator worries that adoption of community-choice’s programs could have huge unintended consequences.

CPUC President Michael Picker told the San Francisco Chronicle last spring that he worries about things going haywire.

“You’re going to have some failures,” Picker said. “Electric markets can be brutal. So what happens to the customers, midyear, if the company or the program goes away? Where do those customers go?”

In a May op-ed in the Sacramento Bee, Picker urged local officials pursuing community-choice to act with care.

“The last time California deregulated electricity, it did so with a plan, however flawed. Now, electricity is being deregulated de facto, through dozens of decisions and legislative actions, without a clear or coordinated plan,” he wrote. “If California policymakers are not careful, we could drift slowly back into another predicament like the energy crisis of 2001.”

Picker warns that managing California’s power grid requires expertise and will become increasingly difficult as new clean-energy mandates kick in and as new technologies come to the fore.

But these warnings so far don’t seem to resonate with the statewide business community, which so far has not taken a strong, consistent stand on community-choice.

Some local groups have, however. The San Diego Regional Chamber of Commerce, for example, questions the assumptions that community-choice will lead to cheaper utility rates and increased use of clean energy.

A California Public Utilities Commission report that Pacific Gas & Electric failed to fulfill its responsibilities to properly maintain

On Dec. 21, the CPUC released a dramatic statement saying it would consider drastic steps to address the “serious safety problems” it says the utility has long condoned. The commission said a break-up of the agency into smaller regional utilities or a state takeover would be among the possible changes it examined.

“This process will be like repairing a jetliner while it’s in flight. Crashing a plane to make it safer isn’t good for the passengers,” said CPUC President Michael Picker. “This is not a punitive exercise. The keystone question is would, compared to PG&E and PG&E Corp. as presently constituted, any of the proposals provide Northern Californians with safer natural gas and electric service at just and reasonable rates.”

CPUC looking at seven possible major changes

The CPUC statement said seven possible changes would be considered.

– Having “some or all of PG&E be reconstituted as a publicly owned utility or utilities.”

– Replacing some members of PG&E’s Board of Directors with members “with a stronger background and focus on safety.” 

– The replacement of existing corporate management.

– Adoption of a new corporate management structure with regional leaders overseeing regional subsidiaries.

– Linking PG&E’s “return on equity” – the profits it shares with its investor-owners – to its safety performance.

– Breaking the utility’s natural gas operations and its electric transmission operations into separate companies.

– Ending the arrangement in which PG&E is controlled by a holding company so it becomes “exclusively a regulated utility.”

Picker’s statement was a remarkable turnaround from his comments on Nov. 15, when his upbeat remarks about the ability of PG&E to survive its fourth consecutive year of devastating wildfires in Northern California led the utility’s stock price to spike.

It reflected the anger among CPUC officials over a staff report released Dec. 14 that found the utility had systematically neglected natural gas infrastructure despite being fined $1.6 billion and convicted of six felonies in federal court over the 2010 disaster in San Bruno, a suburb of San Francisco.

Utility facing 500 lawsuits relating to fires it may have caused

Even if PG&E survives in something like its present form after the CPUC’s review, its future is still very cloudy.

Because of claims that PG&E was responsible for the devastating Camp Fire that killed 85 people in Butte County in November, U.S. District Judge William Alsup announced he was reviewing whether PG&E had violated terms of its federal probation in the San Bruno case.

PG&E also disclosed to the U.S. Securities and Exchange Commission that it is facing roughly 500 lawsuits with more than 3,100 plaintiffs over claims the utility was responsible for many of the dozens of wildfires in Northern California since 2016.

It is also facing wildfire-related lawsuits from the state Office of Emergency Services, Cal Fire, Calaveras County and other government agencies.

But while the CPUC is apparently ready for major changes at the utility, it’s not clear yet how state lawmakers feel.

On Nov. 19 – even as criticism of PG&E swelled as confirmed deaths grew in the Camp Fire – Assemblyman Chris Holden, D-Pasadena, was reported to be considering introducing legislation to help the utility deal with wildfire costs.

Holden helped pass a law earlier this year that allowed PG&E to spread out the costs from the liabilities it faced from 17 wildfires in 2017.

California’s three giant investor-owned utilities haven’t given up on hopes that state leaders and regulators may give their shareholders the financial protection they want in an era of frequent massive wildfires linked to climate change – and their hopes don’t seem as dim as they used to be.

In late November, the California Public Utilities Commission issued what syndicated columnist Thomas Elias called “perhaps its most consumer-friendly decision in several decades.” Affirming staff recommendations made in August, the CPUC board unanimously rejected a bid by San Diego Gas & Electric to pass along $379 million in unrecovered costs stemming from three blazes in 2007 that ravaged San Diego’s northeast suburbs, the city of Poway and unincorporated county areas, torching over 1,300 homes. The CPUC board noted that two independent investigations had concluded the fires were SDG&E’s fault because of poor maintenance practices in high-risk fire areas, and that utility shareholders – not ratepayers – should pay the bill.

But as the bureaucratic decision-making process played out in the San Diego case, the CPUC’s decision in the matter came to have immense importance to Pacific Gas & Electric because of what happened in its own back yard – the brutal October 2017 Wine Country wildfires (pictured). The cost of those Northern California blazes – about $10 billion – dwarfs the cost of San Diego County’s 2007 fires. PG&E’s liability exposure is also expected to be much higher than SDG&E’s – likely in the billions of dollars, according to reports that have regularly blamed PG&E wildfire management practices for the conflagrations, which left more than 40 dead.

PG&E, SDG&E and Southern California Edison officials see the CPUC ruling as a potential existential threat in a hotter, drier era and weren’t ready to let it stand as the final word. This led to what seemed like a long-shot January appeal by the three utilities seeking a new CPUC hearing for SDG&E’s bid for $379 million in relief.

It may not be as long a shot any longer. Gov. Jerry Brown issued a pronouncement March 13 mostly devoted to new efforts to minimize wildfire risk. But its passing reference to the governor’s interest in new legislation that would “update liability rules and regulations for utility services in light of changing climate” conditions caught the eye of Wall Street, at least.

PG&E stock price jumps on report from governor’s office

Barron’s gave PG&E its “hot stock” appellation after the utility’s stock price jumped 6.3 percent on March 13, to $45.10. As of the end of trading Friday, the price was down to $43.08. But that was still up more than 20 percent from its mid-February low.

Ultimately, the question of whether the utilities will get help from the California Legislature and the CPUC seems certain to become a huge political football. The governor has long been seen as close to the three utilities, vetoing reform bills related to recent scandals that have easily passed the Assembly and Senate in recent years.

But Brown is termed out and in his final eight-plus months on the job. With California Democratic politics seeming to have entered an intensely populist phase, leading candidates to replace Brown such as Lt. Gov. Gavin Newsom and former Los Angeles Mayor Antonio Villaraigosa may hesitate to back rule changes that can be depicted as insulating the utilities from the costs of their poor practices in addressing wildfire risks.

Several state legislators are determined to head off any lessening of utilities’ liabilities for their mistakes. In January, Sen. Jerry Hill, D-San Mateo, and seven co-sponsors in the Senate and Assembly introduced Senate Bill 819. Hill called it an “outrage” that state utilities wanted to make their customers pay for damages that “result from negligent practices.”

An April 17 hearing has been scheduled for the legislation.

Losing customers

Part of the challenge to the status quo has been posed by so-called community choice aggregations, or CCAs – local power agencies that more municipalities have embraced or considered switching to, away from legacy power utility companies. PG&E and other established players have begun to worry that too many switchers could leave remaining customers saddled with costs they can’t or won’t bear, leading to a potential death spiral for the big utilities.

“The state is ambitiously pursuing a fundamental transformation of the electric system to achieve historic greenhouse-gas reduction goals,” PG&E wrote to the California Public Utilities Commission in conjunction with two other leading companies, asking in effect for new rules that would prevent a rush to the exits, according to the San Jose Mercury News. “At the same time, the move toward customer choice through community choice aggregation, as well as other retail choice options, is accelerating.” 

Heightening the sense of urgency around appeasing customers as the hot summer months approach, PG&E suffered a frustrating mass outage event in San Francisco last Friday. “The power failure affected almost 90,000 Pacific Gas and Electric Co. business and residential customers, leaving Union Square, the Financial District, the outskirts of Chinatown and several other neighborhoods without electricity just after 9 a.m.,” as the San Francisco Chronicle reported. 

Tire pressure

Seeking to amp up energy supplies without running afoul of Sacramento’s tightening environmental restrictions, state officials have meanwhile focused renewed attention around an unprecedented technology that would harness the weight of tires in motion to produce electricity. They agreed, the Chronicle reported separately, “to fund an initiative to generate electrical power from traffic, a plan that involves harnessing road vibrations with the intent of turning the automobile, like the sun and wind, into a viable source of renewable energy.”

“The technology is peculiar but proven. Devices that convert mechanical force into electricity are used in watches and lighters and are being tested for power generation on sidewalks and runways. A San Francisco nightclub has even leveraged the pulses of a dance floor to power its lights and music,” the paper added. “Gravely helped draft the proposal approved [April 12] by the Energy Commission’s governing board, which will direct $2.3 million to two independent road projects designed to test the viability of scaling up piezoelectricity. ‘Piezo’ is Greek for ‘squeeze’ or ‘press’ and refers to using pressure to create power.”

The several-million-dollar budget will be split between “a 200-foot stretch of pavement on the UC-Merced campus” and “a half-mile of highway to potentially harvest enough power for 5,000 homes,” Jalopnik observed, with the latter effort to be spearheaded by the Pyro-E company. To capture the energy, the lengths of road “will be filled with tiny piezo arrays stacked ‘like quarters’ in the road surface,” the site noted. “Some estimates suggest that as little as 400 cars per hour would be needed to make the system economically viable.”

Uncertain reach

Fueled by a dated system that does not always respond to market incentives or pressure, costs and surpluses of energy have both grown in California, raising pointed questions about what residents should expect from rates and regulations alike.

“California has a big — and growing — glut of power,” as the Los Angeles Times announced in a detailed report. “The state’s power plants are on track to be able to produce at least 21 percent more electricity than it needs by 2020, based on official estimates. And that doesn’t even count the soaring production of electricity by rooftop solar panels that has added to the surplus.”

“To cover the expense of new plants whose power isn’t needed […] Californians are paying a higher premium to switch on lights or turn on electric stoves. In recent years, the gap between what Californians pay versus the rest of the country has nearly doubled to about 50 percent.”

Growing outrage

The disparity has drawn steady fire from free market analysts. “In an open marketplace, gluts of products or services lead firms to slash their prices dramatically. If, say, car manufacturers produce too many vehicles, they will provide rebates or be stuck with lots full of unsold inventory,” Reason recently observed. “With California’s regulated utility system, by contrast, gluts in electricity actually raise prices for consumers because of the way utilities are paid for their investments. They need only get the approval from the Public Utilities Commission to build new plants and pass on costs to ratepayers.”

The gap between power and cost has grown to nationwide highs. November 2016 data from the U.S. Energy Information Administration, “showed California households paying 17.97 cents per kilowatt hour for electricity, or 40.9 percent more than the national average of 12.75 cents,” CNBC reported. “New England states also have high electricity costs. But out West, only Alaska and Hawaii have higher average electricity costs.”

Although controversy has swirled around the prospect of regulators approving new plants amid an energy glut, “experts say growing interest in energy storage — including battery energy storage technology — could have an additional impact on the electricity market in the nation’s most populous state,” CNBC continued. Michael Ferguson, U.S. energy infrastructure group director at S&P Global Ratings, told the network that new battery technology would help by storing surplus energy without having to produce more of it. 

Big plans

In fact, Edison and Tesla recently cut the ribbon on just such a storage system, moving from concept to execution in what utilities officials characterized as unprecedented time. “The facility at the utility’s Mira Loma substation in Ontario contains nearly 400 Tesla PowerPack units on a 1.5-acre site, which can store enough energy to power 2,500 homes for a day or 15,000 homes for four hours,” the Los Angeles Times reported. “The utility will use the collection of lithium-ion batteries, which look like big white refrigerators, to gather electricity at night and other off-peak hours so that the electrons can be injected back into the grid when power use jumps.

“Tesla and Edison sealed the deal on the project in September as part of a state-mandated effort to compensate for the hobbled Aliso Canyon natural gas storage facility. They fired up the batteries in December.”

Unless the utilities rejigger rates and storage, they could find pressure mounting to scale back their plans for a big outlay for electric transportation investment. “Southern California Edison would spend $19.45 million on six ‘priority review’ pilots and $553.8 million on a five-year charging infrastructure buildout,” according to the plan, UtilityDive noted. “San Diego Gas and Electric wants $18.19 million for six priority review pilots and $225.9 million for residential charging. And Pacific Gas and Electric has proposed $20 million for priority reviews and $233.2 million for two five-year charger buildouts. In all, it comes to $1.07 billion for a wide-ranging list of programs from heavy-duty transport electrification to incentives for Uber and Lyft drivers.”

This price system, critics say, results in unforeseen consequences. A recent investigative report found that California’s utility companies have been involved in a power-plant building spree, even though Californians have significantly cut their electricity usage over the same time period. In three years, the state is projected to be producing 21 percent more electricity than it needs, without counting the growth in rooftop-solar applications, reported the Los Angeles Times.

Last year, the California Independent System Operator had 24 percent in actual reserves – far above the targeted 15 percent goal. Even that 15 percent goal is 50 percent higher than what’s necessary to protect the system from disaster and blackouts, according to some experts.

As the Times’ report put it, “California has a big – and growing – glut of power.” It’s a matter of incentives. Because utilities are guaranteed a 10.5 percent rate of return on each new plant they build, regardless of whether customers actually need it, they can make more money building new plants than they could buying power from existing competing plants.

In an open marketplace, gluts of products or services lead firms to slash their prices dramatically. If, say, car manufacturers produce too many vehicles, they will provide rebates or be stuck with lots full of unsold inventory. With California’s regulated utility system, by contrast, gluts in electricity actually raise prices for consumers because of the way utilities are paid for their investments. They need only get the approval from the Public Utilities Commission to build new plants and pass on costs to ratepayers.

The regulated utility model, which dates back to the 19^th century, puts government regulators in charge of looking after consumers’ best interests. But a fairly recent California utility scandal has illustrated the dangers of what Nobel Prize laureate George Stigler refers to as “regulatory capture,” when the oversight agencies are dominated by the industries they regulate.

As the Mercury News reported in 2015 regarding the investigation of a deadly 2010 explosion of a PG&E natural-gas pipeline in San Bruno:

“Additional evidence of the close relationship between PG&E officials and leaders of the agency that regulates the utility emerged late Friday in a new batch of emails long sought by the city of San Bruno … .”

Some say the current system also crushes the emergence of a functioning electricity market. The Times article tells the story of an energy company that built a $300 million privately funded facility in Sutter County:

“Independents like Calpine don’t have a captive audience of residential customers like regulated utilities do. Instead, they sell their electricity under contract or into the electricity market, and make money only if they can find customers for their power.”

But soon after the construction of that plant, the California Public Utilities Commission approved PG&E’s application to build its own power plant. PG&E gets paid no matter the consumer demand, so it was hard for a true private enterprise to compete with that subsidized model. Calpine shuttered its facility halfway into its useful life.

“A monopoly franchise removes the incentive to innovate to increase market share,” explains my R Street Institute colleague Devin Hartman, in an August study of the nation’s electricity markets. “Guaranteed cost recovery for ‘prudently incurred’ expenses diminishes the incentive to control costs. The regulated model also insulates utilities from market risks and most policy risks, such as changes in fuel prices or government subsidies.” This provides a safe place for investors, he added, but gives them little incentive to manage risks or control costs.

These analyses also highlight a point that might seem counterintuitive to many environmentalists: competitive markets often lead to better air-quality outcomes. Here, we see utilities overbuilding natural-gas-fired power plants even as consumer demand suggests the plants aren’t necessary. Because of the utilities’ rate-of-return-based payment, they can stick with older technologies and avoid looking at alternative-energy models that might trim their costs.

The current distorted market is, to some degree, a reaction to the botched energy deregulation plan former Gov. Pete Wilson signed into law in 1996, which provoked a statewide crisis in 2000. The state deregulated the price of wholesale energy, but capped its retail price. The population had been growing and regulators had not approved the construction of new power plants for years. After a hot summer and market manipulations by energy companies gaming the new system, the state’s wholesale prices soared above those retail caps.

The end result: Rolling electricity blackouts, a statewide crisis that led to the bankruptcy of PG&E, and the recall of Gov. Gray Davis. Though Wilson signed the legislation, Davis was blamed for indecision as parts of the state went dark. Since then, state officials have avoided anything smacking of deregulation or market competition and have been cranking up supply even if it’s not necessary. Other states, such as Texas, deregulated their electricity markets and have watched electricity prices go down as California’s have increased.

The Times only touches on another issue of long-term importance: solar energy and the utility companies’ fear of a “death spiral.” California law allows for net energy metering. “Customers who install small solar, wind, biogas and fuel cell generation facilities … to serve all or a portion of onsite electricity needs are eligible for the state’s net metering program,” explains the Public Utilities Commission. “NEM allows a customer-generator to receive a financial credit for power generated by their onsite system and fed back to the utility.”

Utilities must buy back the electricity at market rates, but they still have this vast – and growing – infrastructure of power plants and utility lines to finance and maintain. The more the utilities raise their rates to pay for these “stranded costs,” the more consumers opt out and install solar panels. That raises the per-capita costs of maintaining that infrastructure, which raises electricity prices – and leads to more people opting out of the system. Advances in battery storage could further diminish the need for power plants that are financed 30 or 40 years into the future.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.     

Short-term pain with ACA repeal

Good morning! TGIT. Republicans in Washington appear poised to repeal the Affordable Care Act, better known as Obamacare, some time after Donald Trump is sworn in as president.

With premiums on the rise and consistently poor polling, repeal is music to the ears of many, as evidenced by every federal election since the measure was passed in 2010. But California would suffer major economic consequences if Congress repeals the ACA without an adequate replacement, according to a new study by the UC Berkeley Labor Center. 

A partial repeal (as a full repeal still seems out of reach) would cause Californians to lose hundreds of thousands of jobs, billions of dollars in annual federal funding and kick millions out of coverage. Some of the losses would be offset by gains elsewhere, but it’s impossible to give a complete analysis of the offsetting effects without Republicans’ replacement plan.

CalWatchdog has more. 

In other news:

• Budget: “California’s state auditors recently released an unflattering look at the state’s finances, part of their annual report. Issued several years in arrears, the assessment showed nearly $2 billion in deficit spending for the 2011-2012 fiscal year, piling more borrowed money onto what Gov. Jerry Brown has called a figurative ‘wall of debt.’” CalWatchdog has more. 

• CPUC: “Gov. Jerry Brown has chosen two of his closest advisors on environmental and climate change issues to fill positions on the California Public Utilities Commission, the powerful state agency that regulates energy companies and the telecommunications industry.” The Los Angeles Times has more. 

• Trump Transition: “Abel Maldonado, California’s former lieutenant governor, the Central Coast’s former assemblymember and state senator, and Santa Maria’s former mayor, was in Florida on Wednesday, reportedly interviewing with President-elect Donald Trump to discuss a possible appointment as Secretary of Agriculture.” Santa Barbara Independent has more. 

• Lobbying: The Sacramento Bee looks at how a top Democratic donor pushed a major environmental bill through the Legislature. 

Legislature:

• Gone till January. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @LGullyborn

What happened to CA oil exploration?

Good morning. Hopefully everyone enjoyed the return of NFL football this weekend and is excited about the Rams/49ers game tonight.

But that’s tonight. This morning we’re talking about oil. 

It took some time, but a 2011 report by the Federal Energy Information Administration that estimated that California’s Monterey shale underground land mass formation had 15.4 billion barrels of accessible oil and a follow-up study that put the figure at 13.7 billion barrels of oil — about twice as much as the rest of the nation combined — got plenty of folks’ attention.

Advances in hydraulic fracturing, known as fracking, made extracting the oil cost-effective. … But it’s been all downhill ever since for those enthusiastic about oil exploration in the Golden State.

It’s not just that low oil prices have left energy companies facing a “world of hurt,” in the words of the Houston Chronicle, and without the resources to pursue large new drilling programs in California or elsewhere. It’s specific, daunting developments.

CalWatchdog has more.

In other news:

• “When key bills aimed at reforming the California Public Utilities Commission died last month, much of the blame was placed publicly at the feet of a Republican floor leader — someone not typically seen as a make-or-break figure in a Democrat-dominated Legislature. It turns out, the CPUC itself had some last-minute concerns about the overhaul that contributed to its demise.” The San Diego Union-Tribune has more.

• “In a sign that California’s pot initiative is getting national attention, a Pennsylvania millionaire has contributed $1.3 million to a nonprofit group that is raising money to oppose Proposition 64 on the November ballot,” reports the Los Angeles Times. Meanwhile, “California supporters of the statewide measure to legalize marijuana filed a complaint late Friday with the state’s political ethics watchdog alleging that an outside committee opposing Proposition 64 filed campaign finance reports months after the deadline,” reports The Sacramento Bee.

• The Orange County Register looks at the curious alliance between Republican Rep. Darrell Issa and Democratic Rep. Loretta Sanchez. The two Southern Californians are gambling on bipartisanship helping them through tough races.

• “Dr. Robert Sears is one of the leading voices in the anti-vaccination world, a hero to parents suspicious of childhood immunizations that public health officials say are crucial to preventing disease outbreaks. So when the Medical Board of California announced last week that it was moving to pull the Orange County pediatrician’s medical license, it immediately set the stage for a new battle in the long-running fight over whether schoolchildren should be vaccinated.” The Los Angeles Times has more. 

Legislature:

• Gone ’til December.

Gov. Brown: 

• Presenting Medal of Valor to eight public safety officers in his Capitol office at 11 a.m. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @Sachealth

Now there’s one more story that places the PUC in very unflattering light. KQED has details:

In 2011, Steven and Sharon Vego, along with their 21-year-old son, Jonathan Cole, were killed after a power line went down in their backyard in San Bernardino. …

 

[The Vegos] left behind two kids — one of whom watched from inside the family house as her father, then mother and brother, all died in January 2011.

 

Within a few months, the surviving children filed a lawsuit and asked the CPUC for its investigation report. The CPUC voted in May 2011 to allow the release of that report. It was issued Dec. 17, 2012, and found that the incident was not only Southern California Edison’s fault, but that it could have been prevented if the utility had responded to previous issues on the same electricity circuit.

 

But public records released by the CPUC show the agency didn’t give the report to the Vego family until March 19, 2014 — more than two years after the family settled its lawsuit with Southern California Edison. And the CPUC waited until five days after it had entered into a settlement agreement in which Southern California Edison admitted that it violated state regulations, that there had been similar incidents previously and agreed to a $16.5 million fine.

PUC sides with utility over ‘grieving family’

In a Feb. 16 letter to CPUC President Michael Picker, Sen. Jerry Hill, D-San Mateo, decried how the “commission — which was the only public entity to perform an investigation — effectively took the side of the utility against the grieving family in a civil matter.”

“You know everyone seems to characterize the relationship between the PUC and the utilities as cozy. Well, I think some of this, what we are finding out, shows not just a coziness but a collusion, and that’s the part that I think is most troubling. Collusion gets into what I look at as corruption, what I look at as something that could be dishonest,” Hill told KQED.

The former San Mateo mayor says this is not the only recent example of Edison dealing unfairly with victims of its defective maintenance. He cited the case of Brandon Orozco, an apprentice working for an Edison contractor who was shocked to death at an underground Edison facility in Huntington Harbour in 2013.

Hill said the Public Utilities Commission, especially given that it had formally concluded Edison was responsible for Orozco’s death, should have taken on the utility when it refused to release its internal investigation into the accident. The utility cited attorney-client privilege — even though state law “clearly states that the commission, and each commissioner, and anyone employed by the commission, can at any time inspect the account, book or documents of any public utility,” Hill told KQED.

Under a new proposal put forth by Assemblyman Mike Gatto, D-Glendale, the new chairman of the Committee on Utilities and Commerce, the CPUC — long under fire for alleged lapses and mismanagement — “would be broken apart with many of its duties distributed to other state agencies,” U-T San Diego reported. Gatto, the paper detailed, “would place an initiative before voters as soon as November that would remove the commission’s regulatory authority from the California Constitution, effective July 1, 2018.”

Joined in the initiative by Assemblymen Scott Will, R-Santa Clarita, and Marc Levine, D-San Rafael, Gatto lambasted the CPUC’s performance. “The people of California are deeply concerned by the CPUC’s failures in recent years,” he said, according to California Newswire. “You have folks in the Bay Area justifiably concerned after a pipeline explosion, Orange County worried about nuclear waste, Sacramento and the Central Valley on edge with oil trains, and of course, Angelenos deeply concerned after a gas leak.”

The L.A. neighborhood of Porter Ranch has been sent reeling by massive emissions from a recent pipe rupture. The ordeal has added to a full plate of woes for the commission; “response to the San Bruno pipeline explosion in 2010 and the 2012 closure of the San Onofre Nuclear Generating Station have become the subjects of criminal investigations by state and federal prosecutors,” the Los Angeles Times observed.

Solar squabbles

The CPUC also recently ruffled feathers with a hotly contested vote on the way solar power is metered relative to traditional power. The commission cast its lot with the solar industry in “a dramatic 3-2 vote that saw two commissioners change their minds after a last-minute development favorable to the rooftop solar industry,” as the Desert Sun reported.

“The decision will require Southern California Edison and other utilities to keep paying solar-powered homes and businesses full retail rates for the electricity they generate. In an 11th-hour revision announced by Commission President Michael Picker on Wednesday, it will also ensure that solar customers don’t have to pay for the upkeep of transmission lines. The solar industry cheered that change, even as it prompted two commissioners to vote against a decision they said they otherwise would have supported.”

The move left some aggrieved. State “ratepayer advocates and the utilities, which lose out on electricity sales and some of the infrastructure costs that are bundled into retail rates, say that solar customers put an undue burden on nonsolar customers, who must make up that shortfall,” the New York Times noted.

Mustering support

Faced with news of Gatto’s plan, the commission signaled its hopes to forge ahead on the basis of support from other lawmakers. CPUC spokeswoman Terrie Prosper acknowledged “there is still much to do,” but added, “we look forward to working with the Legislature on any constructive and helpful reform initiative that is put forward,” as the Times reported. “Only by working together on real changes that have the ability to succeed can we make the CPUC stronger and more efficient, and our relationship with the Legislature more productive,” she said in a statement.

One bulwark for the commission has been the governor’s office. “Last year, Gov. Jerry Brown vetoed six bills that would have changed how the commission conducts business,” KQED recalled. “Three bills by now-Assembly Speaker Anthony Rendon would have established new oversight measures on the commission.

“Another of the vetoed bills, by state Sen. Mark Leno, D-San Francisco, would have tightened rules on private communications between utility executives and state regulators. It also would have tightened conflict-of-interest rules and limited the CPUC president’s powers. And two bills from state Sen. Jerry Hill, D-San Mateo, would have set performance criteria for the agency and included commission meetings in transparency laws.”

As yet, the station noted, Gov. Brown’s office has not offered comment on the Gatto scheme.