SDG&E attempts brazen caper #2

Utility wants to make consumers to pay for fire

San Diego Gas & Electric late today (September 25) asked the California Public Utilities Commission to get consumers to pay the uninsured costs of the 2007 wildfires. After a thorough investigation, a unit of the commission had blamed the local utility for those fires.

In December of 2012, just before Christmas, the commission tried a caper that I identified at the time as one of the most brazen scams I had seen in 50 years of covering corporate fraud.

The commission was to vote on two matters, neither of which had to do with coverage of the 2007 fires. But Timothy Simon, the commissioner in charge of the matter, pulled a fast one. At the last minute, he changed the wording of the proposal so that the commissioners would vote on whether the ratepayers would pick up the part of the tab for uninsured costs of the 2007 fires. That was originally not in the proposal and was not supposed to be on the table.

Two intervenors, the Mussey Grade Alliance and San Diego attorney Mike Aguirre, caught Simon's attempted trickery and complained loudly. The Reader did an item on the scam attempt before the vote. The commission had no choice but to vote down the attempt to get ratepayers to pay uninsured costs of the 2007 fires.

About two years ago, I was talking with a former administrative law judge at the commission. The former judge told me: "They will try to sneak it back in. That's how they operate." After all, the commission cares about utility profits and not a whit about consumers.

So, today, SDG&E tried again. Late this afternoon, it filed with the commission for approval to shift to ratepayers the remaining costs related to the 2007 fires. Ratepayers would have to shovel out $379 million over six years and shareholders would only pick up 10 percent of the tab, or merely $42 million. Those fires were the fault of SDG&E management. Shareholders should pick up the entire tab for management blunders.

Aguirre says SDG&E is asking ratepayers to pick up the tab for something that has already been denied them. He likens it to the Southern California Edison scam in which that utility is trying to get ratepayers to pick up the tab for management blunders that led to the closure of the San Onofre nuclear power plant. Aguirre also notes that SDG&E made the filing late on a Friday. When companies want little or no news coverage, they put out an announcement late Friday.

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Another reason that utilities should be investor owned non-profits. The CPUC board members should all be arrested along with the corrupt utility bosses. In the real world the stockholder would suffer the losses.

AlexClarke: There is a criminal investigation of former CPUC president Michael Peevey. We don't know if anything will come of it. Now, Michael Picker, a long-time political manipulator, is president. Many suspect there will be few if any changes from the thoroughly corrupt Peevey years.

The CPUC will continue to be in the pockets of PG&E, Edison International, and Sempra (SDG&E's parent) if ratepayers do not complain vociferously every time a stunt like this is attempted. Best, Don Bauder

Dennis Hull: San Diego ratepayers consistently shell out the highest rates in the nation. Sempra is very profitable and its stock has long been a Wall Street darling, generally having a lower yield than comparable utilities. Wall Street knows that the publicly-held utilities run the CPUC, as emails clearly show. Raise hell! Best, Don Bauder

David O'Neil: Utility regulation arose because these natural monopolies were charging what the traffic would bear. But then utilities began to control the regulators. It's called regulatory capture. Right now, the CPUC is the nation's worst example of regulatory capture. Best, Don Bauder

Aguirre is acting as a "private Attorney General." That means that he looks after the interests of the people of California as a private citizen and attorney by setting important legal precedents and addressing fraud. Setting aside the SONGS settlement is an example. The courts will award Aguirre his fees and costs in the SONGS case if he wins on appeal and the matter is remanded to the Federal District Court and he wins at trial. Setting important legal precedents permits an award of fees and costs.

The PUC awards fees and costs to intervenors if the intervenor and his attorney "make a contribution." Unfortunately, the PUC itself decides if a contribution has been made.

The PUC is a hard nut to crack. Aguirre has tired to get the federal court to prevent an unconstitutional taking by private utlitities without due process or just compensation. This protection is found in the 5th Amendment to the US constitution in the SONGS settlement.

Governor Brown is pro-utility. The legislature does not have jurisdiction over the pending PUC matters. Courts have no general power of review either. This is a similar situation to commissions in Texas whose job it is to oversee oil drilling. The commissioners become little kings. Some federal courts have intervened under the taking without due process or just compensation when state commissions saddle ratepayers with the costs of private utility screw-ups and grant rate raises arbitrarily.

If the Democrats lack the political will to clean up this mess, you can bet that the Republicans never will. Democrats receive huge campaign contributions and can find nice jobs on the boards of directors of large energy companies or as lobbyists upon leaving office. Meanwhile, damages incurred by private utilities due to lack of prudence or safety violations will be foisted on ratepayers to protect investors (shareholders).

Legislative efforts to reform the PUC are being blocked by lobbyists. Only the federal courts can change this. An initiative placing reform of the state general ballot should be attempted by consumer groups. Millions of signatures would be needed and lots of television time. This is an unlikely scenario.

Diogenes: You make excellent points. The best way to describe the CPUC is this: sea of mendacity. Right now, it appears that neither Republicans nor Democrats have the political will to fight the CPUC and the investor-owned utilities: Sempra, Edison International, and PG&E.

The reason that neither party will take on the CPUC and the utilities: money. The utilities are a fount of moolah for the polticians. Best, Don Bauder

Twister: The U-T had a story this morning (Saturday). However, the story did not go over the history of this CPUC/utility scam. Best, Don Bauder

Mike Murphy: Good point. If SDG&E succeeds in getting the uninsured costs of the 2007 fires into the rate base, thus screwing consumers, will those costs come out of the rate base once SDG&E has its loot? I doubt it. Best, Don Bauder

Connie Kraus: You are absolutely right. It's socialization of the costs and privatization of the gain. Or socialism for the rich and capitalism for the poor. Best, Don Bauder

Charles Langley: SDG&E ratepayers are burdened with the highest rates in the nation. If people don't raise hell, those rates will rise even more. Best, Don Bauder

too bad tar and feathers went out of fashion

Murphyjunk: Symbolically, tar and feathers are still around. Have no hesitation employing them. Best, Don Bauder

San Diego Highwayman: That is one way to put it. Best, Don Bauder

I believe that the TV stations need to cover it. However, they will need some "visuals." Such as a well-timed huge crowd of protesters outside of an event. We need moles, too.

Any ideas about specifics?


Twister: It is important to write the company and complain, and let service assistants know that you are unhappy with mistreatment of customers. And, yes, every time there is a public meeting, pack it. Best, Don Bauder

Don - Imagine if the people affected by these rate increases actually DEMANDED that they NOT be made (as it is now >99% of ratepayers just roll over and do nothing) while allowing groups like UCAN that are supposed to be watchdog's of the the Utility and the CPUC actually profit from having too-cozy relationships with them.

Ratepayers are getting stuck with the $5-$10 Billion #SanOnofreGate * screwup by SCE that was approved by the CPUC and they will not even challenge their elected Leaders to stop taking Big Utility donations if they want to be reelected...

Ratepayers deserve what they get, since they accept what is happening to them instead of doing anything about these rate rip-offs. The people at the bottom of the income scale will now have to pay far more for their energy (and Water) while Big Users rates will decrease! This is part of the ongoing process of making living in San Diego ever more expensive, so that lower income residents will be forced to relocate elsewhere else making room for new wealthier residents. The City of SD is doing their part by pushing DENSITY increases, so that they can grow their tax base by converting single family properties to multi-family properties and/or even mega-family developments. Every person that leaves San Diego will be replaced by one or most likely many more new people that will each pay far more Taxes (unless they transfer their Prop. 13 benefits) and far higher Utility & Water bills. Paying for Trash removal that is now free will be the next new "bill" that will be forced upon us as our elected Leaders seek to squeeze us so that they can be enriched with ever more donations from all the Big Business ("Public" Utilities, Sport Org.'s and Other "New" Businesses) that each want a piece of the San Diego "pie" that is up for sale to the highest bidder.

Enjoy living in SD while you can because it is rapidly changing into the West Coast version of New Jersey, where Politicians control almost every facet of your life, as we morph into a great place to visit (tourist destination) but too expensive to live, unless you are very well off.

  • *The new hashtag that will allow you to keep up to date on the ongoing investigation into the multi-billion $ SCE-CPUC ripoff.

Posted before at http://m.sandiegoreader.com/news/2015/sep/15/ticker-supes-want-san-onofre-waste-dump-removed/#c192123

CaptD: You have a lot of good ideas, and one of them is to let politicians know that you don't approve of their taking money from utilities. Best, Don Bauder

Where are the government regulators who are supposedly so necessary to keep the private sector from screwing us? Oh, yeah, out to guarantee their own jobs and pensions, that's where.

We don't need more bureaucracy, we need competition... something that has been prevented by government granting SDG&E a monopoly.

Divorce transmission from delivery. Power lines, phone lines, cable, etc. should be the regulated public utility that is allowed to charge enough to build and maintain the infrastructure. Then let anyone who wants to offer power or TV or phone or Internet over those wires. A truly free market will always deliver the best solution.

jnojr: A truly free market was the aim of deregulation fifteen years ago. It was a disaster in the California utility business. Reregulation didn't work well, either, because when the president of the CPUC, Loretta Lynch, cracked down on utilities, the governor, Gray Davis, replaced her with a former president of Edison who worked full-time to jack up the returns of the publicly held utilities and to screw consumers.

So deregulation failed.. So did reregulation. It's a little like economics. Monetarism doesn't work. Keynesianism doesn't work. Supply side is a complete disaster. Rational expectations doesn't work. Or the system: communism doesn't work, socialism doesn't work, capitalism has worked in the past but is not working in this period of uncontrolled greed.

So should the greed be controlled by regulation? Oy vey.... Best, Don Bauder

Twister: If Trump is elected, corporations will get even more tax breaks. So will the richest Americans. Best, Don Bauder

If the Naciremas elect a blow-fish President, they should eat fish liver.

Twister: Nacirema the lufitueab? Best, Don Bauder

Joe Klein: It's a low blow. Best, Don Bauder

Ed Harris: True. Ratepayers have no voice in the management of utilities. But at the same time, shareholders don't have a voice in corporate decisions, either. Corporate democracy is a fiction. Best, Don Bauder

John Martinez: SDG&E did have insurance but not enough to cover the losses it caused. So now it wants ratepayers to help it out. Consistently, customers of San Diego Gas & Electric pay the highest electric rates in the nation. Why should those customers help SDG&E? Best, Don Bauder

The management suits were out playing golf on a water-sucking course, of course. I'd be willing to bet that some field or lower middle-management types tried to warn them but was overruled. Any quasi-governmental company should have to post its records for public view, on the Internet in searchable form, properly organized and labeled.

I hope some of them are feeding you the inside truth.

I know you're up to your ears in alligators, but you gotta answer more of your calls.


Twister: I answer all my calls. I don't know that anyone down the line told top management that its mismanagement of poles and lines in case of fire was dangerous. If that happened, the person probably was fired. Best, Don Bauder

Somehow, "we" gotta get the word out that, as soon as they're fired, the should call Aguirre and you.


And, of course they should call y'all BEFORE they're fired.


Twister: But suppose the company has tapped their phones and is listening in to their conversations? Best, Don Bauder

Mona Yousry: In California, they KNOW they can, and therefore they go ahead with consumer-screwing activities. Best, Don Bauder

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