California's top energy regulator rolls with power company executives behind the scenes
Inside a legislative hearing room at the state capitol, things were beginning to get uncomfortable. Roughly five weeks had passed since a Pacific Gas & Electric Co. pipeline explosion killed eight and leveled an entire San Bruno neighborhood, and this California Senate committee hearing was an early attempt to get answers.
San Bruno residents who lost loved ones in the deadly explosion huddled in the front row, their eyes fixed on company representatives and agency bureaucrats as they spoke. At the back of the room, a band of immaculately dressed PG&E executives and utility lawyers sat clustered together.
Richard Clark, director of the consumer protection and safety division of the California Public Utilities Commission (CPUC), fielded questions from visibly frustrated state legislators. Sen. Dean Florez (D-Shafter) wanted know why the CPUC hadn't done anything when PG&E ignored an impaired section of the ruptured pipeline even after it was granted $5 million to fix it.
"Did the PUC do any accounting when you gave them $5 million?" Florez demanded. "Do we just give them money and cross our fingers and hope they fix it? Is that what we do? Until some terrible tragedy occurs?"
Sen. Mark Leno (D-San Francisco) said the CPUC needed to step it up and start practicing serious hands-on oversight. He recalled a tragedy that occurred in 2008 when a gas leak in Rancho Cordova triggered a pipeline explosion, killing one person and injuring several others. Although an investigation determined that PG&E was at fault, the CPUC hadn't yet gotten around to fining the company.
"We've got a pattern here," Leno said. "And we're not doing anything differently."
Less than three weeks after CPUC staff members were grilled in Sacramento, Michael Peevey — president of the CPUC and the top energy official in the state — boarded an airplane for Madrid. He was embarking on a 12-day travel-study excursion, with stops in Sevilla and Barcelona, sponsored by the California Foundation on the Environment and the Economy (CFEE).
Peevey's wife, California Sen. Carol Liu (D-Glendale), was along for the trip. So were two other state senators, several members of the state Assembly, CPUC commissioner Nancy Ryan, and a host of representatives from the energy industry. The group included executives from Chevron, Mirant (now GenOn, the owner of the Potrero power plant), Covanta Energy Corporation, Shell Energy North America, and engineering giant AECOM. High-ranking executives of the state's investor-owned utilities also participated, including Fong Wan, the senior vice president of energy procurement for PG&E.
Although strict rules normally govern commissioners' interactions with parties that have a financial stake in the outcomes of commission rulings, there wasn't anything especially unusual about Peevey traveling internationally with a group that included representatives from the same companies his regulatory commission oversees. CFEE trips happen every year. The nonprofit has footed the bill to fly groups of regulators, legislators, and utility executives to prime vacation destinations like Italy, Brazil, and South Africa in recent years, excursions organizers say are critical for educating top-level stakeholders about worldwide best practices for sustainable systems. However, groups such as The Utility Reform Network (TURN) have decried CFEE trips as "lobbying junkets."
As PG&E and the CPUC both work to win back the public's confidence after their latest deadly failure, it's worth analyzing whether their relationship — shaped by vacations together at exotic locales — has grown too cozy.
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