Legislation Would Reform Agency Rocked by Scandal

State Sen. Mark Leno (D-San Francisco) spoke recently at a Covered California press conference in San Francisco. He’s sponsoring a new bill to reform and restructure the troubled California Public Utilities Commission, in the wake of recent revelations.

State Sen. Mark Leno (D-San Francisco) is sponsoring a bill to “help rebuild public trust” in the scandal-plagued California Public Utilities Commission. The commission has been engulfed in controversy around back-channel communications between CPUC and PG&E officials, and allegations about overly cozy relations between the regulator and the regulated utility.


In a statement earlier Thursday, Leno said the commission’s mission is to protect consumers, “but it has lost sight of that goal.”

The new bill, Senate Bill 215, is designed to make “systemic changes within the Commission so it can move forward with more ethical governance,” Leno said in that statement.

The following is an edited version of a Q&A interview with Leno on Thursday afternoon, hours before a highly controversial private celebration of the career of former CPUC president Michael Peevey, who is under investigation by state authorities for his role in the burgeoning scandal.

What inspired SB 215?

It’s becoming common knowledge that the CPUC has lost its way. With the lack of transparency embedded in its current governance, public trust is weakened. There are more problems than I could take the time to point out: the San Bruno explosion, the debacle at the San Onofre nuclear plant, and the revelation of the 65,000 emails (documenting back-channel communications between CPUC and PG&E officials in recent years).

What does the bill do?

It has three different aspects. First is limiting the power of the commission’s president. It’s very uncommon to have such a lack of democracy in a commission like this. Its president now has the power to directly manage the commission’s staff, and the full commission should manage the agency and vote on assignments in any proceedings. Next is setting more reasonable standards and procedures for determining if a commissioner should be recused from participating in decisions. The third part involves ex parte communications. It would clarify and update some of the rules about when ex parte communications — one-sided communications between the regulator and regulated entities — are allowed and not allowed. These emails document that this has been a serious problem.

What led to the current situation with the CPUC? Why did it take this long for some of these problems to become public?

I can’t claim to be an expert historian on the CPUC, it’s been incremental. A culture gets created over time with a wink and a nod and suddenly It’s the way things are done. Then you’ve got a problem and we have to get to the core of it, systemic faults in the government structure.

SB 215 is sponsored by The Utility Reform Network, known as TURN. How did that come about?

Our office has worked with TURN for many years, on gas pipeline safety and other issues. We have a good working relationship and decided to team up to do this bill.

To what extent have the recent problems been due to structural issues and to what extent have they involved the individuals involved, either commissioners or staffers or both?

If you’ve got problems with governance structure, an individual or two or three can certainly exacerbate the problem. There is a new president and new staff leadership. That’s good news. But we don’t want to repeat history and a major change in governance shakes up the culture. Everyone knows it’s a new day.

Any comments on the Michael Peevey dinner tonight?

If you’re a survivor of the San Bruno explosion I can only imagine this would not sit well. Minimally with all of the recent revelations, the timing could certainly be better.

Do you expect Gov. Brown to support this legislation?

It’s a little early in the process for us to know. Conversations with the Administration will begin a little later in the legislative process.

San Francisco Business Times


by Chris Rauber