California public utilities vs. us

“The legal system is rigged for the corrupt [California] Public Utilities Commission.”

In order to take over a power plant in Escondido, commissioner Peevey allegedly said SDG&E first had to draw up a contract to purchase power from this Calpine plant in Otay Mesa.
  • In order to take over a power plant in Escondido, commissioner Peevey allegedly said SDG&E first had to draw up a contract to purchase power from this Calpine plant in Otay Mesa.

“The legal system is rigged for the corrupt [California] Public Utilities Commission and against the ratepayer,” says Loretta Lynch, former president of the commission, who was demoted in 2002 by then-governor Gray Davis because she favored consumers. Utilities had griped vehemently.

Mike Peevey

Mike Peevey

Mike Peevey, former president of Southern California Edison, was named to replace Lynch, despite the obvious conflict of interest. Under duress, he retired last December after 12 years.

Loretta Lynch

Loretta Lynch

Lynch (not to be confused with the woman of the same name who has been named United States attorney general) is right. Laws regarding the commission and the commission’s own rules are stacked ridiculously against ratepayers. In March of this year, Matthew Freedman, attorney for San Francisco–based watchdog the Utility Reform Network, testified before the state senate’s Energy, Utilities and Communications Committee. Said he, “A motion seeking to disqualify the commissioner assigned to a particular case for impermissible bias or prejudice is typically ruled upon by the commissioner accused of bias. This sounds absurd, but it is established commission practice.”

Yes, the accused rules on the accuser’s complaint.

Crazy? Yes. But it gets crazier. The standard of disqualification in a rate-setting procedure is whether there is “clear and convincing” evidence that the accused commissioner “has an unalterably closed mind” on matters critical to the proceeding. If you charge that a commissioner has erred, you have to convince that very same commissioner that he or she has an unalterably closed mind. Good luck. No commissioner has ever been disqualified on that basis.

In his testimony, Freedman was discussing a long-running matter that began early in the century. San Diego Gas & Electric wanted to take over an Escondido power plant. In a private phone conference, Peevey told SDG&E that if it wanted the Escondido plant, it had to agree to buy power from an independent producer, Calpine, which was producing it at an Otay Mesa power plant. If SDG&E didn’t draw up that expensive contract with Calpine, it wouldn’t get Escondido. The commission did not file a required ex parte notice, and there was no public disclosure of the secret call, said Freedman.

After uncovering evidence that Peevey had secret meetings with Calpine and SDG&E over the Otay Mesa deal, watchdog groups filed two motions to have Peevey disqualified. He got off the hook by claiming there was insufficient evidence to show that he had an “unalterably closed mind.” He cast the deciding vote in a 3–2 decision approving the smelly deal.

In 2012, the San Francisco watchdog tried to get Peevey disqualified from being the commissioner-in-chief of a California energy systems project. Documents showed that Peevey had worked with Lawrence Livermore National Laboratory in developing the proposal for which he would be the regulatory arbiter. It was another malodorous one, but the Utility Reform Network couldn’t convince Peevey that his mind was unalterably closed.

More recently, emails have shown that Peevey and other topside commission officials tried to get a weak administrative law judge named so Pacific Gas & Electric wouldn’t have to pay a stiff fine for its role in the San Bruno pipeline explosion of 2010. Moreover, Peevey held a clandestine meeting with an Edison official in Warsaw, Poland, and dictated the deal by which ratepayers will pick up 70 percent of the tab for management blunders leading to the closure of the San Onofre nuclear plant.

Shareholders, not ratepayers, should pay for management blunders, but, says Lynch, “From the very beginning, Peevey was having backroom meetings, hobnobbing with utility executives, going on junkets, and terrorizing people on the commission who stood up for consumers.”

If Peevey thought somebody at the commission was agreeing with Lynch — thus, standing up for ratepayers — “he would take his fingers and put an L on his forehead. That was the Scarlet L [for Lynch] — meaning, ‘You won’t be promoted.’ A bunch of people left the commission” as a result of getting the L salute, she says.

“Peevey has always had tremendous contempt for the process and public disclosure,” says Carl Wood, a former commissioner. “He was very casual about his interactions with utility management.”

Peevey harrumphed to a former administrative law judge, “Who pays attention to those [commission] rules, anyway? They are silly rules.” This retired judge was removed from the Sunrise Powerlink case as a result of lobbying by San Diego Gas & Electric.

Mike Aguirre

Mike Aguirre

Mia Severson

Mia Severson

The dictatorial commission president would give generous intervenor fees to those “who played his game,” says the former judge. San Diego attorney Mike Aguirre and his partner Mia Severson got no money at all for their work on two complicated cases. Reason: Aguirre kept publicly revealing that commission decisions were made in private meetings.

In a public meeting, Peevey cussed out Aguirre but misjudged the former city attorney’s tenacity. Aguirre, along with San Bruno officials, brought Peevey’s backroom deals to the public’s attention, and now Peevey is under investigation by both state and federal officials for his dictation of the noxious deal sticking consumers with most of the San Onofre costs.

Peevey “was acting as an executive officer for every corporation that the [commission] regulates. He was advising them on how to conduct themselves,” says the former judge.

As commission president, Peevey “would get involved in the details of how utilities were run, advise [chief executive officers] about whom they should promote,” says Wood. “He regarded himself as a super-executive for all utilities. It is a violation of law and proper procedures.”

Even if Peevey escapes punishment for his activities, some good may come of all this. A bill in the legislature proposes to eliminate the power of the commission president to manage directly the staff and agency heads. The bill would set new standards on how a commissioner should be recused for bias and clamp down on ex parte communications with utilities.

An Assembly committee will look at a proposal to make it easier for plaintiffs to challenge a commission ruling in superior court. Now, plaintiffs have to go to an appellate court, which might not take the case.

I asked SDG&E whether it denies or confirms the charges that have been made about its actions in the Escondido, Calpine, and Sunrise Powerlink matters. “There are specific written rules and procedures for conversations between parties appearing before the commission and commissioners and commission staff. SDG&E made appropriate filings in compliance with these rules,” said the local utility. Hmm...

But unless utility lobbyists buy off state legislators, these rules and laws could be changed to give consumers a break.

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Aguirre and Severson and the San Bruno City Attorney's Office went for the paper trail of emails. Texting is the new subterfuge but harder to use in lengthy messages. One can use their own private email server - no, that was already thought of.

If you are a public official, do not use email unless you want your emails made public. Clearly, these are public records.

Using "noble causes" by making donations to mask dangerous and wasteful business practices to increase profits has become part of the American way. So many little non-profits were given contributions to support the SONGS settlement that it took hours just to parade them all through at public hearings. Race, gender, nationality, and class status cards were all played by Southern California Edison. One environmental card -climate change - was being played against the dangerous nuclear industry practices card. Clever! Peavey is pro-nuclear, and uses climate change to justify the inherent dangers.

What a parade of paid-off non-profits was produced to support an anti-consumer settlement! The great UCLA can be bought, too. Sports proves that. So do the military research grants and industry contributions.

If everyone had solar panels, we could rid ourselves of these parasites.

Good article, Don.

Diogenes: The City of San Bruno gets the credit for bringing out the malodorous, secret attempt at the CPUC to get an administrative law judge that would be easy on PG&E.

Aguirre and Severson get the credit for smoking out all the collusion between Edison and the CPUC (particularly Peevey). This ended with ratepayers picking up the tab for 70 percent of the costs of closing San Onofre. Those costs should have been borne by shareholders. The costs were a result of management blunders.

In the future, government officials will not send emails when they are up to mischief. They will look for a communications vehicle by which their words cannot be retrieved.

You are right about donations being a way to mask dangerous and corrupt practices. And you are right about solar panels, but the utilities are fighting them, because they dent utility profits. Best, Don Bauder


I love being right. It is not as profitable as being a private utility hack, thought.

Look at the campaign contributions that flow from private utilities to our esteemed political representatives. Small wonder that a guy like Peevey gets appointed. He is a real player for the private utilities. Not so much for ratepayers.

The Public Utilities Commission is set up to discourage attorneys who represent intervenors from exposing the truth. The attorneys who pull no punches are punished by not having fees awarded. The Commissioners themselves want $900 per hour lawyers.

Reading the documents in the SONGS case was a real eye-opener. Going to a few public meetings proved that the PUC needs statutory reform. It is the biggest kangaroo court I have ever seen.

Attorneys for intervenors should get a percentage of all amounts recovered for ratepayers. That would attract the best legal talent. Being paid by the hour is rarely effective in representing victims. The ratepayers are victims here.

It took 14 deaths in San Bruno. How many could have died at when meltdowns happened at SONGS? A message must be sent to the shareholders who can influence the Board of Directors. Safety first. They teach you that in kindergarten.

This is about cover ups that endanger public safety. The PUC hearings avoided the issue of fault. Who ran the red light must be decided before sticking the ratepayers with 70% of the losses. Deeper inquiry would have exposed many skeletons in the nuclear energy sector. That is what this is really all about.

The lame excuses I heard for avoiding this issue included that too many trees would need to be cut down to make paper for legal briefs - to the need for electricity for janitors to plug in floor waxers.

Governor Brown should have fired Peevey. He was aware of the issues at SONGS. Returning campaign contributions in a virtually unopposed governor's race was too little too late.

Now Aguirre and Severson have to unwind the travesty of this settlement by their sole efforts. Unbelieveable!

Diogenes: Gov. Brown is a long-time friend of Peevey. Brown would not fire his old buddy. You are exactly right on your characterization of the CPUC. It is a corrupt government organization -- completely under the thumb of the utilities, a classic case of regulatory capture.

I agree with everything you say except the San Bruno death toll. The figure most often used is eight. Best, Don Bauder

Twister: Eight deaths, 65 people injured, 37 homes destroyed or demolished, 48 homes damages. Entire city traumatized. Then people enraged when top CPUC officials secretly tried to have a lenient administrative law judge appointed so Pacific Gas & Electric would not have to make as big a payment. Best, Don Bauder

Twister: Dorian Hargrove has done an excellent job following this story. It is essential for democracy in San Diego that Goldsmith's emails be turned over so the public can view them. Best, Don Bauder

Hillaryious! I ain't holdin' m' breath.

Mike Murphy: Ratepayers must keep the pressure on. The media in Northern and Southern California must keep this story alive. Public awareness and public demands for reform could force a housecleaning at the CPUC, as well as reforms at the utilities that joined in the collusion. In short, many heads should roll. Best, Don Bauder

Jeff McDonald at the UT has another article today about how The CPUC is involved in dealmaking using donations and secret meetings.

Poppa Doug owns no private utility stocks?

Diogenes: I don't know if Papa Doug owns utilities stocks. I doubt it. They are too fuddy-duddyish for his tastes.

Yes, jeff McDonald has done a good job following CPUC corruption. Best, Don Bauder

Murphyjunk: The feds are investigating Peevey for possible criminal violations. The California attorney general's office is also investigating, but that may not go far for political reasons. Best, Don Bauder

he sure was given lots of time to make "arrangements"

Murphyjunk: The strategy of Edison and the CPUC is to stall, stall, stall. Peevey is no longer head of the CPUC but it behooves him to embrace the same strategy. So even if the feds wanted to speed things up, my guess is it is taking inordinate amounts of time to get documents, get statements, do depositions, etc. Best, Don Bauder

maybe he arranged a condo and bank account while in Poland ?


San Diego attorney Mike Aguirre has written the CPUC, asking that it remove a bunch of statements claiming there was no collusion among the CPUC, Edison, and other parties to the settlement that is burdening ratepayers with 70 percent of the cost of decommissioning San Onofre when the blame lies entirely with management.

Here are just a few of the statements in that settlement document: "unsupported allegations of utility-Commission collusion...unsubstantiated conclusory charges about purported collusion...There is no evidence of collusion."

But documents released by Edison after the settlement was completed clearly show collusion, There was the secret Warsaw meeting in which Peevey sketched out a framework for the settlement to an Edison executive. There were numerous meetings (some kept secret) in which Peevey asked Edison for $25 million for greenhouse gas research, and then the gift was part of the settlement. There were other secret, unreported meetings that Edison and the commission claimed did not have to be reported because a commissioner did all the talking. Hmmm.

Aguirre believes the statements should be stricken. This act might give grounds for the agreement to be reconsidered. Edison, however, when it turned over the documents, claimed that there was no collusion. Many found that assertion laughable, given what was in the documents. Best, Don Bauder

Don, Jerry Brown enabled Peevey to corrupt the CPUC and sell out California to the utilities.

But then Jerry is also a total failure at protecting California from the out of control consequences of Global Warming, as are both political parties that are causing California to crash and burn.

Your decision to run away to Colorado is more correct every day. I just wish I hadn't been born and raised here, or I would have followed your example when I realized you knew all along, and have warned us that the entire state was being plundered for decades.

Thanks anyway for getting rid of Pope Doug, now how do we get rid of Brown, put Peevey in jail and restore democracy in California?

Anon92107: Yeah, but it snows in Colorado in mid-May. We found out last weekend. Our area got five feet of snow in a May in the early part of the century. We didn't live here then.Best, Don Bauder

Laughable like the punishment for deflate-gate. Rules don't apply to everybody.

shirleyberan: Peevey broke rule after rule, and law after law, when he ran the CPUC. He was running the utilities, too. That isn't legal. Best, Don Bauder

Again, Aguirre and Severson should be compensated one way or another by all of us (no better use for tax money that for TRUE REPRESENTATION!) for putting their fingers in the dike. Political hacks always have prevailed and crushed the heroic; y'all apparently have no idea how pervasive this sort of thing is in government. They called me a "Boy Scout," a derisive term used by the scum-suckin' pigs that brown-nose their way to a sweet stink of success by freezing out the "L's" and blasting "Eagle-Scouts" like Aguirre and Severson.

Twister: Hopefully, there is a way Aguirre and Severson can be compensated. It seems to me the CPUC and Edison will be forced to do some kind of mea culpas, no matter how muted. At that point, the hero and heroine in this may get some compensation, although I wouldn't expect just compensation. Best, Don Bauder

O, ambiguity in the language! I hope you meant that the compensation would be fair, and not that compensation wouldn't be the only thing they could expect in payment from criminals. Time to read/see "Lonely Are the Brave" again . . .

Twister: I meant that if the truth -- which officials are trying desperately to suppress -- Aguirre and Severson might get some compensation, perhaps awarded by a court. (The courts have turned them down before, so it might be tricky.) I wouldn't expect the compensation to be just. Best, Don Bauder

Re: " Diogenes May 13, 2015 @ 10:07 a.m.

"Jeff McDonald at the UT has another article today about how The CPUC is involved in dealmaking using donations and secret meetings."

What can we expect from the "new" LA Times?

We can expect the new LA Times/San Diego Union-Tribune to give Jeff McDonald free rein and more column inches to explore the stories he does so well. Let's hope anyway.

monaghan: Agreed: we hope McDonald is given the space and time to develop more CPUC/Edison corruption stories.

Right now, it is obvious that McDonald holds down mention of Aguirre's name as much as he can. That is probably mandated by editors. Maybe new management will abolish such a childish policy. Best, Don Bauder

Twister: I haven't followed the Times's coverage of these scams closely, but what I have seen has been disappointing. In any case, I doubt that the new management would step in right away and curb the U-T's coverage.

What often happens, though -- particularly at a time when layoffs are looming -- is that the reporters themselves curtail reporting on a scam that they think the new management might not like. Best, Don Bauder

"Lonely Are the Brave." Fired. Pilloried. Slandered, ad nauseam.

Twister: Only the brave deserve the fair, but in this case the brave won't get fair compensation. Best, Don Bauder

Don - As we both have said many times before this is a MAJOR embarrassment for just about everyone connected with this multibillion dollar debacle, since it highlights just how corrupt both the generation and the regulation of SoCal's energy really is. If we had a magic wand and could make everyone that is implicated nose grow long, most if not all of our elected Leaders would all look like Pinocchio.

Perhaps someone that is good with photoshop could provide us with some images...

The entire process is rigged as the ongoing investigation into San Onofre clearly illustrates. Also remember that even Governor Browns sister is on the Board of Sempra, so that is yet another "connection" that that needs to be included in what I call SanOnofreGate

===> #SanOnofreGate. (This new Twitter hashtag will allow you to keep up to date on the ongoing investigation into the multi-billion $ SCE-CPUC ripoff). Just enter the hashtag into the Twitter search box: https://twitter.com/search?q=%23sanonofregate&src=typd

Posted before at: http://m.sandiegoreader.com/news/2015/may/04/ticker-commission-lies-company-duplicity/#c185993

CaptD: There are some legislators, though, who are concerned about this Edison/CPUC corruption. Best, Don Bauder

The real question for me is when are the elected CALIFORNIA State Regulators that are charged with overseeing the CPUC going to start doing their job of investigating the CPUC instead of just allowing the CPUC to continue to make ever more decisions that favor Utilities instead of ratepayers?

How many Billions of Dollars are required before we get ACTION INSTEAD OF EVER MORE LOOKING THE OTHER WAY?

Perhaps it is past time to start questioning those charged with making sure that the CPUC does its job since those elected to regulate them are failing the public's trust by not calling for immediate investigations of the CPUC.

Perhaps we should ask Assemblymember Anthony Rendon what exactly he is doing to fix the CPUC...

CaptD: Yours is a legitimate concern. As my column notes, however, there are some legislators who are concerned about CPUC corruption. Best, Don Bauder


Brown's sister sits on the Board of Sempra, Peevey is married to a State Senator, Democrats get big campaign contributions from private energy companies and own stock - former intervenors play ball and get appointed to the Public Utilities Commission, intervenors' attorneys do not get paid unless they play ball, Republicans are worse, money is spread around to non-profits, charities, and universities to support a collusion settlement that costs ratepayers billions of dollars and covers up nuclear endangerment of all residents of Southern California - plus, whistleblowers are punished with retaliation.

Sounds like standard operating procedure to me. Good business practices. Maybe these "expenses" are not properly deductible. If the settlement is collusion and the donations are to buy support for that settlement, are these expenses properly deducted as legitimate business expenses?

Enron had nothing on these guys.

Diogenes: At heart, Enron was a complete accounting scam. I don't think the Edison accountants are to blame for this -- at least, they can't be blamed yet. It's Edison top management, executives in charge of regulatory relations, Edison in-house and outside lawyers who should get the most blame.

This is a regulatory scam -- the utilities and the so-called regulators breaking laws and the CPUC's own rules to jack up utility profits at the expense of ratepayers. Best, Don Bauder


Exactly. But passing on what should be shareholder losses to ratepayers is done by a corrupted process that denies due process to ratepayers and constitutes a taking. It adds up to the same thing: ratepayers get screwed.

Ex parte meetings in Poland? There are responses to emails cited in the UT article that are interesting.

Time for full hearings. I told the Commission this last May. I bet there are a few that wished they had listened. But their hands got stuck in the cookie jar.

Pressure for full hearings on the issue of prudence of the operator at SONGS are required now more than ever. The rush to settle was a cover up, in my opinion. The public were endangered.

Diogenes: This is a case of illegal CPUC/utility collusion, ex parte meetings that should have been reported, an investigation of what happened at San Onofre that was thwarted by the CPUC and Edison, and dozens of other misdeeds.

Yes, the public was endangered. Ratepayers were raped. Some people should be behind bars for this activity. Best, Don Bauder

Will Johnson: It's impossible not to be a cynic when studying how the courts let the CPUC and the utilities get away with fraud. Best, Don Bauder

Methinks we daren't protest enough. At least that's what has gotten us to such a pass, and where we're going--to hell in a handbasket.

Twister: Ratepayers have to raise hell and journalists have to continue to follow this regulatory/utility thievery. Best, Don Bauder

This scandal is too well-documented by admissions contained in emails to just disappear. There are billions of dollars at stake.

Aguirre and Severson have a theory used in other states that a "taking without due process occured in violation of the Due Process Clause of the Fifth Amendment" that is binding upon the states by virtue of the 14th Amendment. There is state action by the state of California.

The 9th Circuit Court of Appeals is likely to uphold this theory. The lack of procedural due process is very clear. There is no opportunity to present evidence. The whole idea is to favor private utility companies and their investor shareholders. There is no meaningful opportunity to confront and cross-examine witnesses. The Commission avoided the main issue of prudence. The operator was not prudent. The based Commission wants to stick it to the ratepayers. The record will not stand up in the 9th Circuit Court of Apoeals.

The Commission should assign the losses to the shareholders or have a full evidentiary hearing on the issue of prudence.

Criminal investigations are going on. That is enough to set aside the settlement. A new Commission should be appointed.

Everyone should write to their elected state representatives demanding this action.

Diogenes: I certainly hope that the trial court decision will not hold up on appeal. Best, Don Bauder

Re: " Don Bauder May 14, 2015 @ 7:53 p.m.

"Twister: Only the brave deserve the fair, but in this case the brave won't get fair compensation. Best, Don Bauder"

Because of culture, there are few truly social people left. The majority are either pathologically asocial or sheep being herded toward ultimate slaughter. To spend one's life being a scum-sucking creep for a few crumbs or shekels and a "life" of comfort is about as far from Camelot as one can get. Love is not a deal, it is ideal. Aguierre may not have the biggest pile of shit, but boy, he must be having fun digging around in it in search of the pony!

Twister: Aguirre and Severson, along with San Bruno officials and the media, brought the scummy CPUC situation to the forefront. That could be personally satisfying. Best, Don Bauder

It does not seem like many politicians ( who are supposed to look out for the public) have chimed in on the subject for either side .

Murphyjunk: A few politicians have stepped forward, but distressingly few. Best, Don Bauder

Alicia D. Fagan: It's too early to say he CAN'T be indicted. We should all be concerned that he WON'T be indicted, however. Best, Don Bauder

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