Santa Monica, CA -- Sempra shareholders have profited wildly from the favorable decisions taken by Jerry Brown’s appointees since the Governor was elected, and his sister Kathleen Brown, a Sempra board member, has made more than $1 million in cash and stock since joining the board four years ago, Consumer Watchdog said today in a new report.
“Ever since Jerry Brown took office in 2011, energy services holding company Sempra and its regulated subsidiaries have benefited from decisions by state regulators that favor Sempra’s bottom line over public safety and reasonable utility rates,” wrote Consumer Advocate Liza Tucker in Consumer Watchdog’s new report, Power Play: How The Governor’s Sister Made A Million Dollars From Sempra While Brown Appointees Let Sempra Bilk Ratepayers For Billions. Click here to read the report: http://www.consumerwatchdog.org/sites/default/files/resources/power_pla…
“Sempra’s market capitalization has almost tripled to $28 billion, and its stock price has risen 117 percent. Sixty four percent of that increase in capitalization came in the wake of the company naming Brown’s sister Kathleen to its board in 2013. For her service to Sempra, Kathleen Brown has earned more than $1 million in cash, stock and other benefits.”
For the Power Play report, see here: http://www.consumerwatchdog.org/sites/default/files/resources/power_pla…
“The state’s other two investor-owned utilities, Edison International and Pacific Gas & Electric have also seen growth—but not as spectacular as Sempra’s. Over the past five years, Sempra reports that it has delivered total shareholder returns of 112 percent, compared with 64 percent nationally for the Standard & Poor’s 500 Utilities Index.
“The Brown Administration’s favoritism toward Sempra, including its willingness to overlook a serious threat to public health at Aliso in allowing the facility to reopen without knowing what caused the blowout and without performing proper seismic and other tests, has protected the company’s value while helping Kathleen Brown become a millionaire.
“Under Brown, Sempra has had a particularly sweet financial run, despite falling demand for natural gas in California. Sempra’s regulated utility subsidiary, San Diego Gas & Electric, pushed through, with PUC approval, unnecessary fossil fuel power purchase agreements from new power plants costing some $4.4 billion over two decades.”
Among the report’s findings:
•State regulators greenlighted the re-opening of Aliso Canyon although no seismic study or environmental report has been completed while the cause of the biggest methane well blowout in the U.S. remains unknown. The facility is not needed for energy reliability, but its reopening means that Sempra will be allowed to charge ratepayers $200 million for a new gas compressor station plus field maintenance of tens of millions of dollars while storing gas for commercial customers who play the market for deals.
•Under Brown, state regulators are considering a massive, 47-mile-long $600 million gas pipeline to run from Riverside County to the Mexican border that would enable Sempra to export liquefied natural gas to Asia, but would provide virtually no benefit to its core residential and small commercial customers who would pay $2.1 billion over the life of the pipeline, whether it serves them or not. The project would cross about 15 miles of land zoned for single or multiple family use and the PUC has the right to invoke eminent domain, if necessary.
•Governor Jerry Brown’s regulators have taken decisions and reversed negative decisions to favor Sempra shareholders over its ratepayers. They have approved fossil fuel power purchase contracts that will be paid for by SDG&E ratepayers that are not needed to meet electricity demand, slow the transition away from fossil fuels, and worsen global warming. This extra generating capacity more than doubles the amount needed to meet San Diego’s typical power demand annually.
•Sempra’s ratepayer-financed projects that are of no benefit to them raise questions about the relationship between the company’s fortunes, any future compensation for Kathleen Brown tied to Sempra’s stock price, and the approvals for fossil fuel infrastructure by Governor Brown’s appointees. More than half of Kathleen Brown’s Sempra board compensation is in the form of “phantom” stock that follows the movements of the real stock and pays out any profits. At a designated time, the cash value is distributed. This form of compensation links the financial interests of recipients with the interests of shareholders.
For more information on Governor Brown's relationship with energy companies and investor owned utilities, see Consumer Watchdog's other report, Brown's Dirty Hands: http://www.consumerwatchdog.org//dirtyhands
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