In San Francisco, federal prosecutors are laying the groundwork for a criminal trial of Pacific Gas & Electric that will begin in March. In preliminary filings, prosecutors paint a scathing picture of PG&E negligence leading to the 2010 explosion of natural gas pipelines in San Bruno, which killed eight and wiped out a neighborhood.

How is that bad for the PUC? Because implicit in the federal allegations that 28 felonies were committed by PG&E is that the utility was not facing serious regulation before the catastrophe in San Bruno, a suburb south of San Francisco. Here is part of the San Jose Mercury News’s recent coverage:

“The government intends to offer proof that PG&E’s willful decisions not to maintain records, conduct proper pipeline assessments, and otherwise comply with federal pipeline safety regulations were part of a corporate culture of prioritizing profits over safety,” federal prosecutors wrote in papers filed on Nov. 2 with the U.S. District Court in San Francisco.

 

“The prosecutors in the trial are being very aggressive,” said Peter Henning, a professor of law with Wayne State University in Detroit. …

 

“They are trying to frame this case for a jury, and the government is attempting to frame this around a single word: greed,” Henning said.

 

PG&E faces a fine of up to $1.13 billion if convicted on the federal criminal charges.

‘Edison was driving the bus’

Meanwhile, in Southern California, politicians and consumer advocates have grown increasingly critical of the PUC-orchestrated, already-approved plan to have ratepayers cover 70 percent of the $4.7 billion cost to close the San Onofre nuclear plant and safely shutter its two reactors, whose 2011 malfunctions led to the release of small amounts of radiation.

Since the plan was approved in fall 2014, it’s been revealed that Peevey had never-disclosed meetings with Southern California Edison executives over how to apportion San Onofre closing costs, including a 2013 meeting in a Warsaw hotel room between Peevey and an Edison official. Edison owns 80 percent of San Onofre and San Diego Gas & Electric owns 20 percent.

But other questions have emerged about the PUC’s stewardship that go beyond the propriety of these undisclosed meetings.

The Los Angeles Times delved into the expert testimony that the PUC reviewed before approving the settlement and reported that one expert blamed Edison’s poor management for the problems with leaking steam generators which are used to cool the nuclear reactors and keep them safe to operate. The expert questioned the utility’s insistence on blaming Mitsubishi Heavy Industries, the branch of the Japanese conglomerate that made and installed the generators.

Arnie Gundersen, a nuclear engineer who served as an expert witness regarding the handling of San Onofre’s generators, said at a minimum both Edison and Mitsubishi are at fault.

 

“When I reviewed all the data it was clear to me that Southern California Edison was the one driving the bus,” Gundersen said.

 

“Mitsubishi wanted the contract and agreed to some very onerous terms in order to get it.”

 

Gundersen said the San Onofre case is similar to two incidents in Florida, where an agreement was reached over the closed Crystal River nuclear plant that led to billions in costs to consumers. In addition, he said, the St. Lucie nuclear plant had similar steam generator problems as San Onofre.

A KPBS report also alleged that Edison acted deceptively in its 2006 meeting with the Nuclear Regulatory Commission, never telling NRC officials of concerns about the steam generators that let Edison to complain to Mitsubishi in both 2004 and 2005. It appears the PUC was unaware that the utility’s concerns about steam generator problems dated to 2004.

‘The same people always get paid’ by PUC

A San Diego Union-Tribune analysis also raised questions about the PUC negotiations that led to the agreement assigning most of the shutdown costs to ratepayers.

The biggest beneficiary of a state program aimed at leveling the playing field between utilities and their customers is a Bay Area consumer group that privately negotiated the deal assigning customers 70 percent of the costs for the failure of the San Onofre nuclear plant.

 

The Utility Reform Network, or TURN, collects millions of dollars a year in so-called intervenor compensation – almost half of all the money handed out by the California Public Utilities Commission since 2013. …

 

TURN receives as much as 90 percent of its operating income from commission awards, so it’s highly dependent on regulators for its livelihood. Whether consciously or not, the group might allow that dependency to shape its advocacy, critics say.

 

“The public really doesn’t have anyone at the commission looking out for them,” said San Diego lawyer Michael Aguirre, who is suing to overturn the San Onofre settlement as an undue burden on utility customers. “They are being charged for advocacy that really is not being performed. The same people always get paid.”

Peevey is facing criminal investigations by both the state and federal government. His home in La Cañada Flintridge, a Los Angeles suburb, was searched by investigators in January.

The deal requires 70 percent of shutdown costs to be borne by ratepayers. It has drawn intense questions in the past year as evidence amassed of a you-scratch-my-back-I’ll-scratch-yours relationship between longtime California Public Utilities Commission President Michael Peevey and Edison, SDG&E and the state’s third investor-owned utility, Pacific Gas & Electric. Emails obtained from the PUC show Peevey frequently linking beneficial regulatory actions with the utilities taking actions he approved, including donating money to fight a 2010 initiative that would have scrapped AB32, the state’s landmark 2006 law forcing a shift to cleaner but costlier energy.

Peevey left the PUC board in December but has remained in the news ever since because of federal and state criminal investigations of his actions as the state’s top utility regulator. The most damning revelation came in February, when documents were discovered that showed the framework for the San Onofre bailout was established in an improper, never-disclosed 2013 meeting in a Warsaw, Poland, hotel room between Peevey and an Edison executive.

This meeting and other undisclosed communications between PUC officials and utility executives led Administrative Law Judge Melanie Darling last week to order a $16.7 million fine against Edison. The edict needs to be approved by the PUC — Darling works for the PUC, an example of the tidy way that regulators and utilities operate in California — but that is considered pro forma.

The fine is seen by some observers as a confirmation of the seriousness of the ethical failings on display in the Edison-PUC back-room relationship. It is certain to trigger fresh interest in the Legislature in adopting PUC reforms.

Six were approved in the most recent session, only to be vetoed three weeks ago by Gov. Jerry Brown on the grounds that they were an “unworkable” mish-mash of changes. The vetoes irked Assemblyman Anthony Rendon, the Lakewood Democrat who is slated to become speaker later this year and who has expressed extreme dismay over how the PUC has acted.

But the fine is considered irrelevant by the consumer advocates and trial lawyers who are the PUC’s loudest critics, given how much Edison will save because ratepayers will have to pay $3.3 billion of the $4.7 billion needed to safely shutter San Onofre.

Mike Aguirre, the former San Diego city attorney, suggested the administrative law judge’s recent hearings on Edison’s relationship with Peevey and the PUC were kabuki — a staged show to prop up the status quo.

“With one hand the CPUC is giving Edison $3.3 billion, with the other hand they’re taking back some extra change,” Aguirre told the Los Angeles Times. “This is all cosmetic.”

Jason Hickey / flickr

California’s powerful, politically connected giant electricity utilities are used to getting their way and to getting help when things go wrong.

When an ineptly designed state power “deregulation” law exposed Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to catastrophic losses in early 2001, Gov. Gray Davis and the state Legislature jumped in with controversial state-dictated emergency deals that stabilized the companies. Earlier this year, the Public Utilities Commission approved a deal in which PG&E’s $1.6 billion fine for the 2010 San Bruno natural-gas disaster included $850 million for transmission-line safety upgrades and improvements the utility intended to make anyways.

But in San Diego County, there’s been slowly building opposition to the PUC’s November approval of a plan in which $3.3 billion of the $4.7 billion cost of closing both the reactors at the San Onofre nuclear power plant is borne by ratepayers. Edison is 80 percent owner of the plant, while SDG&E owns the remaining 20 percent. As part of the plan, there has been no formal PUC investigation into the problems that led to the plant being shuttered.

The PUC, Edison and SDG&E maintain that the deal was in keeping with established practices in the utility industry and that there is nothing unusual or onerous about how the costs were divvied up. They note that the initial proposal from the PUC staff was modified to make it more friendly to ratepayers.

However, the circumstances of the initial negotiations — in which key decisions were made on March 26, 2013, in a secret meeting between then-PUC president Michael Peevey and an Edison executive named Stephen Pickett in a hotel room in Warsaw, Poland — continue to produce headlines and ongoing civil and criminal investigations. Peevey’s home was raided by FBI agents early this year.

The PUC’s resistance to independent investigators is also adding to the fire. Utility officials have long resisted releasing basic information about the San Onofre decision-making process.

But beyond the veneer of scandal, many San Diego County ratepayers keep returning to the circumstances that led to San Onofre’s closure.

Both reactor units [went offline in] January 2012, after a small leak of radioactive gas prompted shutdown of one unit; the other was already offline for routine maintenance.

 

Unexpected wear was found in the metal tubes that carry radioactive water in all four of the plant’s steam generators, two generators for each reactor.

 

The steam generators were installed between 2009 and early 2011 in a $670 million operation.

That’s from the O.C. Register.

‘Where do we find accountability?’

Dozens of letter-writers and online commentators argue that Mitsubishi, the Japanese conglomerate that made the defective generators, should be forced to pay damages beyond refunds it has already agreed to do in litigation.

These critics also wonder how Edison and SDG&E can only be socked with 30 percent of the San Onofre closure costs when their management of the plant’s upkeep was so poor that huge, costly, essential new machinery started faltering almost immediately.

A reporter for Northern California’s KQED caught the public’s mood in a visit to San Diego this spring:

Sorrentino’s Pizza owner Patrick Quinn is tired of watching the energy bill at his San Diego restaurant go up each month [as a result of SDG&E’s big rate hikes] …

 

Quinn calls [the $4.7 billion] settlement illegitimate because the Public Utilities Commission allowed it without a full investigation of who was responsible for the plant’s failure and who should be held accountable.

 

“Where do we find accountability?” Quinn said. “The steam generators — why did they fail? These are simple questions that should be asked.”

‘I’m not here to answer your goddamned questions’

The San Diego trial lawyer who is targeting the PUC and utilities in a lawsuit — former City Attorney Mike Aguirre — opposed the San Onofre deal from the start. As the Union-Tribune reported, this led to an ugly turn at a May 2014 PUC board meeting.

The president of the California Public Utilities Commission swore and angrily refused to answer questions last week at an unusual hearing at which he was asked about communication with his former employer, Southern California Edison.

 

The president, Michael Peevey, was questioned by former San Diego City Attorney Mike Aguirre about his role if any in reaching a proposed settlement between utility companies and consumer advocacy groups regarding $4.7 billion of shutdown costs for the San Onofre nuclear power plant.

 

Aguirre asked Peevey if he had any meetings with Edison, the company he once headed, regarding the settlement.

 

Such contact would be inappropriate because Peevey and the commission are supposed to be impartial arbiters at public proceedings regarding whether the settlement is fair to all parties.

 

Aguirre is making the case that it’s a bad deal for utility customers to cover $3.3 billion of the shutdown costs, as proposed in the settlement.

 

“I’m not here to answer your goddamned questions,” Peevey told Aguirre. “Now shut up — shut up!”

Eight months later, emails obtained by the Union-Tribune revealed that Aguirre’s speculation was correct: Peevey had met with the Edison executive in Poland in 2013 to talk about San Onofre’s closing and who would pay for it.

Last week, another lawsuit was filed in San Diego federal court, the U-T reported.

A federal lawsuit filed this week accuses two top Edison International executives of harming shareholders by failing to disclose secret meetings with California regulators regarding a $4.7 billion settlement of costs for the failure of the San Onofre nuclear plant.

 

The lawsuit alleges that Edison CEO Ted Craver and Chief Financial Officer Jim Scilacci failed to disclose private communication with decision makers at the California Public Utilities Commission, including a March 2013 meeting at a luxury hotel in Poland.

Meanwhile, civil and criminal investigations of the PUC continue. There are no indications, however, that indictments or fines will be announced anytime soon. The PUC is still deciding which documents to provide investigators, and utilities have also balked at some requests for information.

This L.A. Times excerpt addresses the initial developments:

Frustrated by the prospect of another do-nothing stadium task force, the Chargers on Monday warned San Diego to either step up or step aside in the pursuit of a new NFL venue, and again raised the specter of a relocation to Los Angeles. …

Fabiani wrote any stadium proposals should pass a series of “real world tests,” such as it needs to have a strong chance of being approved by the required two-thirds of votes, needs to have the support of the mayor and a majority of the city council, and should “recognize the economic realities of our local marketplace and of the NFL.”

Among those realities, Fabiani wrote, the Chargers cannot be expected to generate the robust preferred-seat-license revenues the San Francisco 49ers and Dallas Cowboys did when building their stadiums.

Members of the task force offered mild reactions to the Chargers’ bluntness. But Fabiani’s response was to raise new questions about the competence and integrity of the city task force.

“Latest salvo in a string of concerns”

This is from the U-T San Diego account posted Tuesday afternoon:

Public subsidies are unlikely

For 14 years, the team — owned by billionaire entrepreneur Alex Spanos and run by son Dean Spanos since his father was afflicted with dementia — has been seeking a new stadium. Qualcomm Stadium in Mission Valley was built in the mid-1960s and is considered one of the NFL’s dowdiest stadiums even after some costly overhauls; only Lambeau Stadium in Green Bay is older. Team officials, at least, believe it can’t be remodeled to include the luxury suites that have become a gold mine for many NFL teams.

A new stadium integrated into a larger mixed retail-housing zone on the Qualcomm site was the early focus, but the 2004 election of Chargers’ foe Mike Aguirre as San Diego city attorney followed by the collapse of the housing market killed that plan. In more recent years, interest centered on a new $800 million to $1 billion stadium in the city’s downtown, near the taxpayer-subsidized Petco Park baseball stadium — either a standalone football stadium or one integrated with the bigger Convention Center the city needs to build downtown to continue to attract Comic-Con and other lucrative gatherings.

But the team has always made plain that it expects public subsidies, something that elected leaders promised would only happen if voters supported them in a referendum. Few observers think the Chargers could win half the vote, much less the legally required two-thirds of the vote, in such an election in a city scarred by years of fiscal problems and reduced services.

In recent months, while being somewhat optimistic on the record, team officials have made particularly clear in not-for-attribution interviews that they needed some sign of progress.

Conventional wisdom vs. the view of insiders

But Faulconer’s turn to another task force infuriated the Chargers — at least if the conventional wisdom is to be believed.

That conventional wisdom has been mocked for years — off the record — by many prominent San Diegans. Their view was that as soon as it seemed likely an NFL-blessed and possibly subsidized stadium could be built in Los Angeles, the Chargers would be on their way — either as the lead team or the secondary team sharing the facility. The huge financial success of the New York Giants and New York Jets sharing a stadium in north New Jersey is a key factor in the league’s eagerness for an L.A. dual-team facility.

If this more cynical view is accepted, then Fabiani’s actions of the past two days look to be calculated to make him be the villain of both contemporary and historical accounts of why the Chargers left San Diego — not the Spanos family that has paid the former Clinton White House spin doctor lavishly for more than a dozen years.

But there’s another twist that makes the Spanoses’ eagnerness to move to L.A. even more plausible. The Los Angeles Rams and Raiders may not have enjoyed consistently good attendance before fleeing in 1994 for St. Louis and Oakland, respectively, but the value of having a professional sports franchise in the nation’s second-largest metropolitan area looks more immense then ever after the recent sales of the Los Angeles Dodgers and Los Angeles Clippers.

The Dodgers fetched $2.15 billion and the Clippers — which don’t even own the arena in which they play — cost $2 billion. No MLB or NBA team has ever been sold for even half that much money.

Given that the NFL is much more popular than the NBA or baseball, the incentives for Fabiani to offer himself up as a distracting villain for a team completely committed to leaving San Diego are plain. The Chargers could be worth $1 billion more in Los Angeles than the city 110 miles south on I-5.

By Chris Reed

It doesn’t take long before the L.A. Times’ profile of new San Diego Mayor Bob Filner in Sunday’s paper makes it clear that we’re in for a piece that poses as a warts-and-all portrait but is more akin to hagiography. I know and like the reporter who wrote the piece, Tony Perry, who is an outstanding war correspondent when he’s not covering San Diego. But I’m surprised that Perry largely buys Filner’s narrative that he’s a well-meaning liberal trying to shake up a backwards city, and that if he’s brusque and a bully, it’s always for the greater good.

This is a good angle with a powerful hook. But the narrative is fundamentally wrong. Under Republican Mayor Jerry Sanders and with an increasingly pragmatic Democratic-majority City Council, San Diego has made great strides since 2005. It’s in much better shape than most big cities in California. Perry doesn’t mention this until late in the story after first giving Filner room to insinuate the city is in the hands of a corrupt elite.

San Diego also has been an innovator in public-employee benefits reform and making government more efficient, with both efforts endorsed by voters. Perry doesn’t mention that Filner has made clear he will sandbag the push for efficiency — i.e., smaller government. Is this what a heroic populist does? Defy the electorate?

Cherry-picking to serve the Noble Filner narrative

But the problems with the profile don’t end with its failure to challenge the false premise of Filner’s narrative. There is lots of cherry-picking of facts to serve the narrative.

Starting with the lede:

“SAN DIEGO — Under a pro-business Republican mayor, it was a no-brainer: allocating millions of dollars each year to buy national advertising for the tourism industry — a major economic driver in this vacation mecca.

“Then Bob Filner got elected, and he had questions: Why couldn’t Sheraton and Hilton buy their own advertising? And why should the cash-strapped city lavish funds on an industry that pays low wages to bottom-rung employees like maids and bellhops?”

The problem with this is the policy wasn’t driven by the “pro-business Republican mayor.” It’s been a bipartisan policy embraced by the San Diego City Council, which has a Democratic majority. The story goes on …

“The new Democratic mayor also thought the city attorney should provide him with legal guidance on the matter in private, not in front of reporters.

“So he crashed Jan Goldsmith’s news conference.

“‘You not only have been unprofessional but unethical,’ Filner scolded the city attorney, ‘and I resent it greatly that you’re giving your advice to the press.'”

Just who was ‘unprofessional’?

The problem with this is that Goldsmith is elected, not a mayoral appointee, and unless the issue is a sensitive legal negotiation over personnel, contracts or real estate, he has an obligation to talk to the media about pressing city issues. He is the attorney for the city of San Diego — not the attorney for the mayor of San Diego. If the article had brought up that point, Goldsmith becomes the good guy — and it’s obvious who’s being “unprofessional.” But no — we’re following Filner’s narrative.

However, here is where the profile goes most off the tracks:

“Confrontation has long been a Filner political trademark. At congressional hearings he regularly derided Veterans Affairs officials over poor care, making him a favorite of veterans groups.”

So we are reading a long piece about the abrasive liberal who is trying to force constructive (allegedly) change down the throat of a resistent city, and we look back at his actions on behalf of a key constituency during his 20 years in Congress. So isn’t the most important takeaway here that Filner’s badgering of the VA accomplished nothing? That the VA he so challenged and derided is the most criticized federal agency of all? That his management style did nothing to stop a disliked agency from becoming a pariah agency?

If you’re writing a piece about a mayor struggling to get his way with the leadership style he used as a congressman, of course.

And if you’re writing about Filner’s political history, isn’t it worth at least mentioning in passing that perhaps the most memorable fact about Filner’s 20 years in Congress was his channeling of hundreds of thousands of dollars in campaign finances to his family bank account by using his then-wife as his paid campaign treasurer? Well, no — not if you’re treating Filner’s narrative about his nobility as an accurate framework.

A civil rights hero on another crusade? Or an ineffective bully?

I think the reason Filner gets such favorable treatment is obvious in the final third of the article, which repeatedly notes Filner’s work as a courageous civil-rights activist a half-century ago. The implication is that he’s still a courageous champion of the powerless, no matter what he does.

“Filner honed his approach in the 1960s as a Freedom Rider in the segregated South. He spent two months in a Mississippi jail, refusing to pay bail. He knew the Rev. Martin Luther King Jr. and Cesar Chavez and says they taught him that conflict and confrontation are often necessary to accomplish change.

“On one of his congressional websites, Filner posted the mug shot from his arrest in Jackson, Miss.”

But sometimes a bully is just a bully. And sometimes righteousness spoils into obnoxiousness.

“Filner and Goldsmith have sparred over medical marijuana, city pensions, Port Commission appointments, even over whether to allow seals on the beach in La Jolla. Filner unveiled a budget that would cut 13 jobs at the city attorney’s office — more than in any other department — including that of Goldsmith’s top assistant. After several acrimonious meetings, Goldsmith refuses to let any of his staffers meet with the mayor without a witness.”

That’s amazing. And if you heard the stories about Filner’s abusive behavior toward those he considers the “little people” around him, you’d say it’s wise.

There’s also this detail about Filner that is omitted that undercuts the profile’s main narrative: The top assistant of Goldsmith whom Filner targeted is Deputy City Attorney Andrew Jones, an African-American who had the temerity to disagree with the non-lawyer mayor’s legal analysis in a meeting. How does Jones, a soldier turned lawyer, feel about it, according to a published report?

Filner to black city attorney: Go sit in the back of the room

“’He’s (verbally) attacked me in closed session to the extent that at one point he asked if I would sit in the back of the room,’ said Jones, who is black. ‘I, of course, considered it something similar to asking Rosa Parks to sit in the back of the bus. I was extremely offended by it but in deference to my boss I decided not to make a big deal out of it. But clearly he has a problem with me. I’m not sure why.'”

But as the profile wraps up, it seeks to leave no doubt that that’s not the real Filner. The real Filner? He plays civil rights anthems! Oh, the humanity.

“One recent night, radio station KPRI-FM invited Filner in as a guest disc jockey.

“Among his selections was ‘We Shall Overcome,’ by Mahalia Jackson. Filner recalled being arrested in Jackson, Miss., and summoned to meet the police chief; he thought he might be in for a beating, or worse.

“‘As I was walking to his office, I heard in the back all my fellow Freedom Riders singing “We Shall Overcome,” and it gave me courage to face that police chief,’ he said. ‘It was the music, it was the music, that gave me the courage to keep going.'”

All you can do is groan. How long is Bob Filner going to get away with current behavior because of past performance? Maybe forever.

Or maybe just until someone with a smartphone catches him savaging an underling who gets in his line of fire. Then we’ll finally have our overdue “have you no decency, sir?” minute in San Diego.