Legislators asking for hike in gas tax to fund transpo plan

Good morning. Happy Monday. And welcome to the final stretch in Sacramento, where the legislative session ends on the 31st. 

One of the biggest items left unresolved is a transportation plan. The top transportation legislators in each chamber — Assemblyman Jim Frazier, D-Oakley, and Sen. Jim Beall, D-San Jose — are pitching a 17-cent-per-gallon gas tax increase to fund a $7.4 billion transportation program. They also want to increase the tax on diesel fuels by 30 cents a gallon and to make it easier to get approvals for transportation infrastructure improvements. Their proposal exceeds what Gov. Jerry Brown pitched last year.

Brown’s proposal — which went nowhere in a special session — was built on a 6 cent per gallon tax increase and other provisions that would have funded a $3.6 billion transportation plan.

CalWatchdog has more. 

In other news: 

• Speaking of a transportation plan, it’s one of several big items that will likely go unresolved this session, causing finger pointing and frustration. The San Jose Mercury News has more. 
• “For years, state lawmakers have been trying to crack down on private meetings between utility companies and members of the California Public Utilities Commission after revelations that top officials and industry executives had frequent dinner dates, shared talking points and even sketched out details of the multibillion-dollar closure of a Southern California nuclear power plant during a secret rendezvous in a luxury hotel in Poland.” But some worry that a package of bills under consideration by the Legislature to overhaul the commission won’t go far enough. The Los Angeles Times has more. 
• One senator upset someone on the other side of the Capitol, so they removed her name from her bill in retaliation. The Sacramento Bee has more. 
• And in a few days, the Legislature will say goodbye to one of its most accomplished members. The Los Angeles Times has more. 

Assembly:

• In at 1 p.m.

Senate:

• In at 1 p.m.

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

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Assembly speaker, transparency proponents spar

Good morning!

A war of words erupted in recent days between the proponents of a transparency ballot measure and Assembly Speaker Anthony Rendon, after members of the Legislature and legislative counsel dismissed the measure as full of “ambiguities” and introduced their own watered-down versions.

In a scathing letter, the Lakewood Democrat accused the measure’s proponents of allowing their “passion” for the measure “blind” them to the “shortcomings that may be obvious to others,” painting them as unwilling to work with the Legislature.

But Hold Politicians Accountable — the committee formed by former Republican legislator Sam Blakeslee and Republican donor Charles T. Munger, Jr., backing the California Legislative Transparency Act — fired back that the measure was “refined by three distinguished attorneys, including a Constitutional scholar,” and independent vetting by cosponsors, none of whom found fault.  

CalWatchdog has more. 

In other news:

• Sweeping reforms of the state’s embattled Public Utilities Commission were announced Monday, which, subject to legislative approval, “would give the attorney general new authority to enforce limitations on private communications between PUC personnel and utility executives — a key issue after an email scandal revealed numerous improper contacts,” writes The San Jose Mercury News.
• “In the wake of a scathing state audit released in March, the University of California mounted a $158,000 publicity campaign to dispute claims that its admissions policies had disadvantaged resident students,” writes The Sacramento Bee.
• “The two groups at the center of a violent Sacramento rally that left at least seven people with stab wounds on the Capitol grounds Sunday represent a marriage of the past and future of white supremacist organizations, experts and law enforcement officials said,” writes the Los Angeles Times.
• How bad is water management in California? The Capitol Weekly answers that question. 

Assembly:

• Full day of hearings. 

Senate: 

• Full day of hearings. 

Gov. Brown:

• No public events announced.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New followers: @LostBookshop @KernQuirks

Activists are furious with the PUC’s 2014 decision to make ratepayers of Southern California Edison and San Diego Gas & Electric cover 70 percent of the $4.7 billion cost of shuttering the facility, which had severe problems with steam generators that forced its closure. After the decision, it was discovered that the parameters of the deal had been worked out clandestinely in 2013 in a meeting in a Warsaw, Poland, hotel room between an Edison executive and then-PUC President Michael Peevey.

Both the state and federal governments have launched criminal investigations of Peevey over his failure to disclose contacts with utility executives and his alleged attempts to pressure utilities for favors in return for his support on some regulatory decisions.

But while the criminal division of the state Attorney General’s Office is pursuing the criminal probe, the civil division of the office is supporting Gov. Jerry Brown in his fight against disclosing emails between his office, the PUC and utilities during the period decisions were being made about how to pay for the costs of closing San Onofre.

Recent coverage of the case in the San Diego media has featured sharp criticism of Harris’ dual role in dealing with the scandal.

“In this case, for the [attorney general] to investigate the communications with the [California Public Utilities Commission] while representing a potential witness who is a potential subject of the investigation is a conflict,” former San Diego County District Attorney Paul Pfingst told KPBS.

“One of the problems with the conflict is it invites the attorney general to narrow the investigation to avoid the conflict,” former San Diego City Attorney Mark Aguirre told the San Diego public broadcasting affiliate.

“If the investigation into the Public Utilities Commission involves the nuclear power plant, and that is something that’s the subject of the governor’s emails they are trying to keep secret, then I think there is a conflict,” Georgetown University law professor Paul F. Rothstein told the Union-Tribune. “The Attorney General’s Office should probably turn over one or the other of these cases to an independent counsel.”

“Government works best when it shines light on problems, not seeks to keep the public in the dark,” University of San Diego law professor Shaun Martin told the newspaper, criticizing Harris for helping efforts to keep public records from being released to the media.

‘Ethical firewall’ said to separate AG branches

Harris’ aides deny there is any conflict and depict their actions in working with the governor on email requests as routine:

A Harris spokesman said there’s an ethical firewall between the attorney general’s civil division representing the governor’s office and its criminal section responsible for the investigation into the California Public Utilities Commission and the state’s energy companies.

That’s from KPBS’ coverage.

Testifying at a recent hearing of the Assembly Committee on Privacy and Consumer Protection and Select Committee on Cybersecurity, Howle said 73 of the 77 agencies she reviewed had inadequate or worse safeguards against hacking. Her three biggest concerns: the state’s court system, the Board of Equalization and the California Public Utilities Commission.

Howle’s remarks were countered by a representative of the Brown administration. The state Department of Technology’s chief information security officer, Michele Robinson, said Howle had exaggerated the state’s problems.

But lawmakers didn’t appear to accept Robinson’s defense of the state’s efforts. Assemblywoman Jacqui Irwin, D-Thousand Oaks, told Sacramento TV station KCRA after the hearing that she considered Howle’s warnings “very disturbing. …  We have 160 departments that are holding your private information. So Social Security numbers, addresses, medical information — yes, there is a risk for the typical Californian.”

Here is the key summary of Howle’s 2015 audit:

In the past few years, retailers, financial institutions, and government agencies have increasingly fallen victim to cyber attacks. Most recently, in June 2015 the federal Office of Personnel Management announced that a cybersecurity intrusion had potentially exposed the personal information of approximately 20 million current and former federal employees and other individuals. Given the size of California’s economy and the value of its information, the state presents a prime target for similar information security breaches. Its government agencies maintain an extensive range of confidential and sensitive data, including Social Security numbers, health records, and income tax information. If unauthorized parties were to gain access to this information, the costs both to the state and to the individuals involved could be enormous. However, despite the need to safeguard the state’s information systems, our review found that many state entities have weaknesses in their controls over information security. These weaknesses leave some of the state’s sensitive data vulnerable to unauthorized use, disclosure, or disruption.

But Howle didn’t just offer this general conclusion. She also specifically criticized the Brown administration:

Despite the pervasiveness and seriousness of the issues we identified, the technology department has failed to take sufficient action to ensure that reporting entities address these deficiencies. In fact, until our audit, it was not aware that many reporting entities had not complied with its requirements. To determine whether reporting entities have met the security standards, the technology department relies on a self-certification form it developed that the reporting entities must submit each year. However, the poor design of this form may have contributed to many reporting entities incorrectly reporting that they were in full compliance with the security standards when they were not. Specifically, we received complete survey responses from 41 reporting entities that self-certified to the technology department that they were in compliance with all of the security standards in 2014. However, when these 41 reporting entities responded to our detailed survey questions related to specific security standards, 37 indicated that they had not achieved full compliance in 2014. … The technology department was unaware of vulnerabilities in these reporting entities’ information security controls; thus, it did nothing to help remediate those deficiencies.

According to KCRA, a state task force created last year could turn in the first draft of a state government cybersecurity initiative this month.

The Howle audit knocking the state government’s failure to worry enough about hackers was one of six harsh reports she issued in a three-month span last summer, as CalWatchdog reported. Perhaps the most alarming report found that the state did a poor job tracking mentally ill gun owners, despite a previous 2013 audit that warned about the shortcomings of the state’s efforts.

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.

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.”

But the honeymoon could be over for millions of Southern California residents served by municipal utilities. Moody’s Investors Service warns they will be hard-hit by the state’s latest edict on increased use of renewable energy to supply electricity:

On Oct.. 7, Gov. Jerry Brown signed a bill requiring all California utilities to generate 50 percent of the electricity they sell to retail customers from renewable energy by 2030. The legislation will be credit negative for municipal utilities if ratepayers balk at higher prices that come with the transition to renewable energy from coal-fired generation.

 

Municipal electric utilities in Southern California would be particularly affected given their reliance on coal-fired generation. Coal-fired generation has historically supplied cities like Los Angeles and Anaheim with more than 40 percent of their electricity. In contrast, Northern California cities such as San Francisco and Sacramento derive all of their electricity from sources other than coal such as solar, hydroelectricity and natural gas.

 

The Los Angeles Department of Water and Power and other Southern California municipal utilities have thus far managed the shift to other sources from coal without major ratepayer protest, allowing them to increase rates and maintain a sound financial performance. But Los Angeles ratepayers are facing a likely 3.4 percent annual water and power rate increase over the next five years to help support the further transition to cleaner energy.

 

For utilities, the Clean Energy and Pollution Reduction Act of 2015 increases the percentage of electricity coming from renewable energy to 50 percent by 2030 up from the current 33 percent by 2020. We expect the utilities will meet the 33 percent requirement. However, ratepayer affordability and technical challenges will become increasingly difficult as utilities reach towards the more significant 50 percent renewable standard.

Infrastructure costs also likely to buffet ratepayers

Moody’s says another factor could also yield future rate shocks:

[Municipal] utilities will face another major challenge in whether the transmission grid can adequately handle the intermittent renewable resources that will begin to dominate California’s power supply mix. LADWP benefits from owning and operating its transmission system and has variable resources such as a pumped storage facility and gas-fired units to balance the system. The city of Anaheim recently added the Canyon natural gas fired unit and Southern California Public Power Authority financed the Magnolia unit in Burbank to help compensate for shortfalls in solar or wind energy. In the long term, the need to successfully integrate more renewables into the grid will likely require similar additional capital investment.

But while customers of the region’s two giant investor-owned utilities — Southern California Edison and San Diego Gas & Electric — won’t be as hard hit by the latest state edict, they will also pay unique bills in coming years not borne by customers of municipal utilities. Unless a California Public Utilities Commission decision is overturned, customers of the two utilities will pick up 70 percent of the $4.7 billion cost of shuttering the broken San Onofre nuclear power plant. SCE owns 80 percent of the plant, SDG&E 20 percent.

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.

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.