NBC Bay Area
CPUC president Michael Peevey answers questions from the Investigative Unit after snubbing lawmakers for a conference in wine country
By Tony Kovaleski, Liz Wagner, Jeremy Carroll and Kevin Nious
NBC Bay Area Investigative Unit
The embattled president of the California Public Utilities Commission recently ignored the call to answer tough questions by state senators in Sacramento and instead decided to attend a conference at an exclusive Napa resort and a reception at an upscale winery in St. Helena, both of which were captured on hidden camera by the NBC Bay Area Investigative Unit.
Michael Peevey was asked to appear before the Senate Budget and Fiscal Review subcommittee on April 25 to justify keeping the job he has held for the past decade. The senate hearing was in response to growing conflict over a confidential report, uncovered by the Investigative Unit, which raises questions about the CPUC’s commitment to safety and its relationship with utility companies the agency regulates.
“The governor needs to replace the president of the Public Utilities Commission,” Sen. Jerry Hill said in an interview with NBC Bay Area last month. “The current president has been there for many years and he has had a very cozy relationship with the utilities, which this report indicates.”
Hill’s call for change at the CPUC was recently echoed by two lawmakers.
“I think the question is, who should be leading this organization so the people of California are safe,” San Jose assemblywoman Nora Campos said at a recent legislative hearing.
At that same hearing Los Altos assemblyman Richard Gordon added, “I have come to the point where we need serious change in the leadership of the PUC to bring change.”
After calling for his job two weeks ago, Hill wrote Peevey a letter formally requesting his presence at the subcommittee hearing. The letter states, “For all the shortcomings under your leadership at the CPUC over the last ten years as documented by independent reports… it’s critical that you testify…to justify your continued appointment as the president of the California Public Utilities Commission.”
Instead of addressing the conflict, Peevey kept a prior engagement at the Silverado Resort and Spa in the heart of Napa. According to the agenda, the conference was about clean energy, and Peevey was scheduled to give a short five to seven minute presentation for the non-profit organization, California Foundation for the Environment and the Economy (CFEE).
Before the conference started, at around 11 a.m.—the same time he was expected in Sacramento—NBC Bay Area’s hidden cameras spotted Peevey mingling with guests in the resort conference center. The day officially started at noon, with a catered lunch after invited guests such as a representative from Pacific Gas & Electric and, somewhat ironically, more than two dozen Sacramento lawmakers, checked in at the event. Peevey gave his presentation at 1:30 p.m.—two and a half hours after he was scheduled to speak in Sacramento.
After four hours of conference sessions Peevey boarded a luxury bus and drove through the Napa Valley to the next event on the agenda—a reception and dinner at St. Helena’s exclusive Merryvalewinery. For more than three hours, Peevey ended his day inside the facility along with more than 100 guests.
Following the reception, NBC Bay Area’s Chief Investigative Reporter Tony Kovaleski met Peevey outside the winery to ask questions about his priorities, and the confidential report. Below is a transcript of a part of the conversation:
Tony Kovaleski: You were asked to speak to senators today about the safety of your PUC. Instead you spent your day here in Napa.
Michael Peevey: No, that’s not true.
Kovaleski: What is the message you sent by coming here to Napa instead of going to speak to the senate?
Peevey: You are very antagonistic you know. You are reading a script.
Kovaleski: Sir, I am not reading a script. I want to give you an opportunity to respond.
Peevey: But your questions are the wrong questions.
Kovaleski: You spent time here with the utilities you are paid to regulate.
Peevey: There’s no utilities here that I know of.
Kovaleski: PG&E was here. We saw them on the list.
Peevey: Oh, there may have been one person, I don’t know.
Kovaleski: That report said your agency is too cozy with utilities. Is that true?
Peevey: No. Stop. That’s one person who said that. That’s not what the report said. There was no conclusion in the report. It was an interview with various individual employees of the Public Utilities Commission.
Kovaleski: Sir, you have been asked by lawmakers to step down. Lawmakers have said you should be fired. Should you be fired, sir?
Man with Peevey: No, he shouldn’t be fired. They don’t have the authority.
(Peevey starts to walk away).
Peevey: You poor son of a b****. You have a job to do. It’s pathetic what you are doing. It’s pathetic.
(Peevey gets into a car).
Kovaleski: Sir, should you answer to lawmakers when they ask to speak with you? What’s the message you sent tonight by coming here?
(Car drives away).
NBC Bay Area asked to speak with Peevey about the confidential report prior to the conference in Napa, but did not receive a response to that request from the CPUC. The CPUC did provide a written statement about the report:
The CPUC has made safety an underlying principle in all its actions. As we work to instill a corporate culture in our regulated utilities that embraces safety as a tool and an enhancement to their mission, we must ensure we do the same at the CPUC. We have hired consultants to help us in our process of culture change across all the industries we regulate. As part of these efforts, our consultants conducted an informal survey of internal employees to see what they think safety means, how they see their role in safety, and how they think we can do better as an agency. The report is the result of the informal survey; it is not an analysis of our safety culture or conclusions by our consultants, but a reporting-back of what some employees said in informal focus groups. As the report says, “This report is not an evaluation of the objective truth of those views and perceptions.” We will use the results of the report to help us define what we need to change, develop strategies and actions to implement the changes, and ensure accountability as the process continues.
This is not the first time Peevey has snubbed lawmakers for an all-expense paid event. He was asked to speak at an assembly committee meeting in 2011, but reports indicate he accepted a free trip to Sweden that was funded by the Swedish government and the California nonprofit, The Energy Coalition. When asked by reporters in April about his confidence in the leadership of the CPUC, Gov. Jerry Brown said Peevey is “well-experienced.”
“He’s flawed like everyone else in this building,” Brown said, “but he has a lot of knowledge and he has great commitment.”
State Sen. Jerry Hill, D-San Mateo, has challenged both Pacific Gas and Electric and the agency that governs it, the California Public Utilities Commission, to step up and make the state’s gas delivery system safer after the San Bruno pipeline explosion and fire that killed eight in 2010.
Over the years, Hill has crafted legislation to make both PG&E and the CPUC more accountable to the public while also safeguarding it.
But numerous reports, especially an internal “Safety Culture” document released last week, indicates that the CPUC has placed less importance on safety than it should have.
Now, Hill has a new challenge for the CPUC — have your president sit down with lawmakers this Thursday to answer questions related to fiscal responsibility and safety issues.
The CPUC president is Michael Peevey, appointed to the post more than 10 years ago by then governor Gray Davis.
Hill calls Peevey a “dictator” who can only be ousted from his job by Gov. Jerry Brown or a two-thirds vote in the Legislature.
“It would be nice to be able to question him,” Hill told the Daily Journal yesterday.
Hill invited Peevey to testify at the Senate Budget and Fiscal Review Subcommittee this Thursday.
“All concur that there is a problem at CPUC. It appears to be out of control,” Hill said about National Transportation Safety Board, Legislative Analyst’s Office and internal CPUC reports.
The confidential internal CPUC report released last week quoted numerous employees of the organization who said safety was not a priority or that the commission did not want to levy fines for safety violations against utilities such as PG&E.
“If we were enforcing the rules, we would not have to worry about a safety culture. If we were holding the utilities accountable and doing what we were supposed to be doing, San Bruno would never have happened,” one employee was quoted as saying in the “Safety Culture” document.
Hundreds of millions of dollars were also misallocated by the CPUC, Hill contends.
Please continue @:
State Sen. Jerry Hill announced Wednesday that he is proposing a law that would severely curb the financial authority of the president of the state Public Utilities Commission.
The Peninsula legislator is a leading critic of the CPUC and its longtime president, former utility CEO Michael Peevey. Hill’s district includes San Bruno’s CPUC regulated PG&E blast site.
Hill said during a press event Wednesday at the CPUC headquarters in San Francisco that he’s introducing legislation to put a stop to these abuses.
He said he wants a new law that would prohibit the CPUC from doling out hundreds of millions of utility ratepayer dollars to foundations, third-party nonprofits and for-profit organizations, unless first reviewed through the California Energy Commission.
“President Peevey, has in fact made a habit of finding ways to extract money from customers and regulated entities and inject it into the unregulated nonprofits when he then controls,” Hill said.
A blistering attack by the City of San Bruno, ratepayer advocates and Assemblyman Jerry Hill called into question the California Public Utility’s appointment of Sen. George Mitchell and his law firm DLA Piper as mediators in the PG&E explosion and fire settlement.
Mayor Jim Ruane of San Bruno, Thomas J. Long, Legal Director of consumer advocacy group The Utility Reform Network (TURN), and Karen Paull, Acting Legal Counsel, The Division of Ratepayer Advocates (DRA) all stood in front of the CPUC this morning and lambasted the “unholy and cozy alliance” between regulator CPUC and the regulated Pacific Gas & Electric Co.
The City of San Bruno and consumer advocates signed a letter demanding the CPUC rescind the appointment of Sen. Mitchell immediately because the CPUC went behind their backs in appointing the mediator to oversee the talks and presented evidence that CPUC and PG&E had ex-parte contact in making the decision. The groups objected to the choice of mediator and said they should have been consulted before regulator CPUC appointed the mediator.
The California Public Utilities Commission had announced Monday that it had appointed former U.S. Senator George Mitchell to serve as mediator in the talks.
San Bruno City Manager Connie Jackson and attorneys with San Francisco and the consumer groups said the CPUC had notified PG&E before it appointed Mr. Mitchell, but didn’t notify San Bruno, San Francisco, or ratepayer advocates and officials.
“The unilateral announcement by the CPUC Monday that it had selected a mediator without consulting any of the parties at the negotiating table is consistent with the cozy and unholy relationship between the CPUC and PG&E. This action is symbolic of the broken, dysfunctional and dishonest relationship between PG&E and the CPUC, the agency that is supposed to be the watchdog and protector of the public’s interest,” said Mayor Ruane of San Bruno.
“San Bruno is rightly concerned that the DLA Piper law firm has previously represented utilities–and that the firm was selected unilaterally by the CPUC and PG&E without the participation of any other party, which goes against the fundamental principles of mediation,” said Mayor Ruane at the press conference today.
“It also is of deep concern to us that DLA Piper has a lengthy list of corporate clients, including Southern California Edison, which the current chairman of the CPUC, Michael Peevey, once headed, according to news media reports about the appointment.
“In order for any mediation to succeed, the mediator will have to assure all the parties to our satisfaction that they have no conflicts, that they can be an unbiased mediator, and that the process will be open, transparent and fair,” Mayor Ruane said.
Please continue @:
Related story, please see @: