Gov. Jerry Brown signed five bills Thursday aimed at reform for the California Public Utilities Commission and called on the agency to take additional steps to impose changes of its own.
“These important reforms cannot wait another year,” Brown said in a statement announcing his support for the package of bills. “To that end, I am calling on the commission to use its existing authority to take immediate action. Together, these administrative reforms and legislative acts will bring much needed improvement to the commission.”
The signings came almost a year after Brown vetoed six bills that would have imposed a different set of reforms on the commission, which oversees power companies, telecommunications firms, passenger carriers and other public services. He said those bills contained contradictory provisions and did not work as a package.
Brown’s action this week follows a report last week by the California State Auditor that found the commission has not guarded against the appearance of improper influence in its decision-making and failed to fully disclose important communications between its regulators and external parties.
The legislation signed by the governor requires commissioners to disclose and report private, or ex parte, communications with utility executives and other interested parties in rate-setting cases.
Some consumer groups called for an outright ban on such communications but the governor supports strong disclosure in the interest of not stifling important stakeholder voices.
The new laws also require more information to be made publicly available, establish the position of safety advocate and authorize the Attorney General’s Office to bring enforcement actions in Superior Court against commission employees who violate ex parte rules.
The laws also call for future commission meetings to be scheduled around the state so more people can attend.
The reform package that made it to the governor’s desk excluded certain provisions of an agreement reached in June, when Brown and key legislators announced a deal to fundamentally restructure the commission.
In addition to steering many commission responsibilities to other state agencies, the agreement called for Superior Court review of commission denials of public records requests. It also called on the commission to work to relocate tons of nuclear waste from the San Diego County coastline.
Even though those proposals won the initial support of Brown and top lawmakers, they did not make it through the statehouse.
The governor’s signature on five commission-reform bills was largely welcomed by lawmakers and consumer advocates, although some feel more needs to be done.
“The reforms approved by the governor today will ensure commissioners disclose their private meetings with utility executives and will result in heavy penalties for those who violate the rules,” said Sen. Mark Leno, D-San Francisco, who co-wrote one of the bills Brown signed.
“The changes included in SB 215 will help keep the CPUC focused on the public’s ratepayer and safety interests, and I am pleased we were able to find common ground with the governor in pursuit of enhanced transparency and accountability,” Leno said.
Jamie Court, president of the Santa Monica advocacy group Consumer Watchdog, was skeptical of Brown’s approach.
“This is a shameful ruse that pretends, in the face of mountains of Public Records Act evidence, that there is separation of powers between the Governor’s Office and the PUC,” Court said.
Brown had several suggestions for the CPUC. He said the commission should appoint an ethics ombudsman to help promote compliance with regulations and best practices. The governor also said the commission should develop a reorganization plan to transfer some duties to other agencies, post more information on the Internet, improve its coordination with other state agencies and streamline the release of public records.
The commission said it shares the commitment of the governor and lawmakers to improve its operations.
“We will continue our efforts to transform into an agency that is dedicated to safety, transparency and accountability to the people of California,” spokeswoman Terrie Prosper said.
Assemblyman Mike Gatto, D-Los Angeles, who introduced a plan to dismantle the utilities commission after Brown vetoed the reform bills last year, was unconvinced that regulators would adopt stricter rules of practice on their own.
“The public will certainly be watching whether the PUC heeds the call to implement the reforms proposed,” Gatto said. “But if it was so easy for the PUC to reform itself from the inside, then the question becomes why hasn’t it already.”
The California Public Utilities Commission has been under criminal investigation since 2014, when thousands of emails were released showing that regulators and utility executives routinely met to discuss business pending before the panel, sometimes trading favors. No charges have been filed.
One such meeting between former President Michael Peevey and a Southern California Edison executive involved an undisclosed draft deal to assign costs for the failed San Onofre nuclear plant in San Diego County. The men met at a luxury hotel in Poland. Eventually, utility customers were assigned 70 percent of the $4.7 billion in costs, a decision that has since been reopened amid criticism.
The Utility Reform Network, a San Francisco consumer group that fights to reduce electricity rates, said improvements to the ex parte reporting rules will help level the playing field in future proceedings.
“Although these reforms are not as comprehensive as the ones vetoed by the governor last year, they provide the CPUC with an opportunity to demonstrate a commitment to transparency and ethical practice,” staff attorney Matthew Freedman said in a statement.
