At last week’s PUC meeting and in recent interviews, Mike Florio depicted the proposal developed by PUC staff, endorsed by PUC President Michael Picker and praised by the state’s electrical utilities as a scheme with hidden motives. Instead of being about fairness for heavy users in hotter inland areas, Florio says its real intent is to discourage homeowners from installing solar panels, which help keep them in the cheapest tier of energy pricing. The PUC will again consider Picker’s plan and Florio’s alternative at a meeting later this summer.

CalWatchdog has covered the maze of politics related to solar power’s growth in the Golden State and reported on utilities’ efforts in some states to actively discourage solar installation.

But Florio’s history of secretly working with Pacific Gas & Electric is sure to hang over any attempt to depict himself as an outside force for change on the state’s utility regulator. A lawyer from Oakland, who once was a senior attorney at The Utility Reform Network, said Florio was deeply embarrassed earlier this year by the release of emails showing his chummy, surreptitious relationship with the giant Northern California electricity supplier.

A “$130 million Christmas gift” to PG&E

Here are key details from the San Francisco Chronicle’s analysis of 65,000 emails involving Florio and PG&E, with some relating to the fallout from a 2010 pipeline explosion that killed eight and wiped out a San Bruno neighborhood. When the PUC deliberated on what punishment to assess over the San Bruno disaster …

… Florio proposed last-minute language that dropped the idea of slashing PG&E’s 2012 profit, arguing that a profit cut would “send the wrong signal that somehow investing in safety is less important than investments in other aspects of the utility’s business.”

 

The commission approved the measure, which critics called a “$130 million Christmas gift” to PG&E. …

 

By January 2014, Florio saw another opportunity to help the company. With a key decision on [a] $1.3 billion rate case looming, [PG&E Vice President Brian] Cherry asked for Florio’s help in getting a particular administrative law judge assigned to hear the case.

 

Florio called the judge who had been named to the matter “horrible,” and told Cherry in an email, “I’ll do what I can on this end.”

 

A judge PG&E wanted was ultimately assigned, but when the emails were released, the utilities commission gave the case to a third judge. It has not been resolved.

 

Florio apologized when his promise became public, saying he had made “some very serious mistakes … in the content and the excessive candor of my email exchanges with PG&E.” He recused himself from voting both on the $1.3 billion rate case and the larger cases related to the San Bruno blast.

PG&E penalty still in the news, still under fire

But the $1.6 billion fine that was ultimately ordered by the PUC in April over the San Bruno tragedy remains controversial. Some of the penalty apparently can be deducted from state taxes that PG&E must pay, prompting attempts at a legislative fix in recent days by two Bay Area state lawmakers.

That’s not the only concern. The $1.6 billion fine is calculated by depicting the $850 million cost of forthcoming PG&E upgrades to its natural gas transmission system as a penalty. Yet the utility had previously acknowledged it was planning to improve the system. This has prompted grumbling in activists’ circles that the PUC was once again coming to PG&E’s aid while portraying itself as coming down hard on the utility.

By Joseph Perkins

The California Public Utilities Commission is displeased. In a meeting April 17 in San Francisco, four of its five members sharply criticized a state Senate bill which, they claimed, would strip the commission of its power to regulate basic phone service.

What surprises is that the measure, SB 1161, was introduced not by a free-market Republican but by Los Angeles Democrat Alex Padilla, chairman of the Senate Energy, Utilities and Telecommunications Committee.

Padilla’s bill would prohibit the PUC from regulating Internet-based phone service, known as Voice over Internet Protocol. It passed his committee this week by an 11-0 vote, a rare instance in the state capital in which legislation has garnered unanimous support on both sides of the aisle.

PUC Commissioner Michael Florio insisted yesterday that SB 1161 is unnecessary, that he and his colleagues have exercised a “light touch” in regulating VoIP. “Nobody is talking about regulating the Internet,” he said. “It’s just a political slogan that has no basis in reality.”

Well, the PUC has restrained itself — so far — from heavy-handed regulation of VoIP. But that hardly means the commission will maintain such a light touch going forward, as consumers increasingly rely on VoIP to make and receive phone calls.

Indeed, VoIP is a “disruptive” technology. It uses high-speed broadband Internet service to connect callers at minimal cost, while also offered advanced features — think Skype — unavailable on standard phone systems.

Currently, nearly one in three residential phone subscribers relies on VoIP connections. At the rate VoIP usage is growing, it will not be very long before old-school copper-wire land lines are rendered obsolete.

Special interests

That concerns special interest groups that want the PUC to regulate the growing Internet-based voice industry; that are peeved at Padilla and his Senate colleagues for its preemptive strike against Florio and his fellow regulators.

“SB 1161 is a wolf in sheep’s clothing,” said Mark Toney, executive director of The Utility Reform Network, an activist consumer group. It not only would prevent the regulation of VoIP, he warned, but also “would mean the end of regulatory oversight over large monopoly phone companies.”

Toney’s alarmist pronouncement was echoed by Val Afarasiev, a spokeswoman for the Communications Workers of America. She predicted that avaricious phone companies “are going to inform the consumers of California that no longer will they provide touch-tone type of wire-line services because they are going to move to VoIP services.”

These are the same old arguments that previously have been made mustered against the deregulation of telecommunications; the same dire warnings that have previously proven unfounded.

In fact, deregulation of the phone business has been a tremendous boon to consumers. Competition among various service providers — including traditional providers of land lines, cable companies, wireless companies and VoIP companies — has meant lower-cost local and long-distance calling.

Padilla deserves much credit for defying the PUC; for ignoring TURN, CWA and other knee-jerk opponents of telecom deregulation. Yes, passage of SB 1161 will indeed benefit California phone companies. But it will much more benefit California businesses and residents.