September 29, 2016, San Francisco—Public outrage over back room deals at the California Public Utilities Commission culminated today in the approval of legislation that limits meetings between utilities and regulators, establishes new disclosure requirements for contacts between Commissioners and self-interested Wall Street and industry representatives, and increases penalties for violations.
TURN-sponsored SB 215, (Mark Leno, D-San Francisco and Ben Hueso, D-San Diego), finally signed into law by Governor Brown today, aims to clean up the corrupt process that has allowed the utility industry’s preferred access to CPUC Commissioners and their advisors in the past. Both PG&E and SoCal Edison have been caught making back-door deals, and have been penalized for their unreported “ex parte” communications. Those communications came to light through investigations into the fatal PG&E gas explosion in San Bruno and Edison’s botched steam tube replacement at the San Onofre Nuclear Generations Station, which led to the closing of the plant.
“Today’s reforms are a vital first step toward restoring public confidence in the CPUC’s ability to decide crucial issues fairly, without bias or undue influence,” said Matt Freedman, staff attorney at TURN. “SB 215 includes a series of meaningful reforms that close loopholes utilities have taken advantage of in the past, and limits the opportunities for private interests to seek special favors behind closed doors. 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.”
Key provisions of SB 215 (Contact TURN for a complete list):
- Ban the practice of unreported ‘one-way’ or ‘listening mode’ communications between Commissioners and parties.
- Ban the practice of ‘judge shopping’ by utilities.
- Require representatives of credit rating agencies and Wall street investors to be subject to all ex parte
- Establish a new requirement for Commissioners and their advisors to disclose and describe any ex parte communications.
- Establish new standards and an independent process for determining when a Commissioner or Administrative Law Judge (ALJ) should be disqualified due to bias or prejudice.
- Allow the CPUC to impose a complete ban on ex parte meetings in ratesetting or quasi-legislative proceedings.
- Empower the Attorney General to bring an enforcement action in superior court and seek sanctions against any Commission employee who violates the ex parte
- Authorizing the CPUC to assess penalties for ex parte violations equal to the financial benefits received by the violator if they exceed the maximum penalty that would otherwise apply.