Brown Signs Bills Aimed at Reforming Utility Regulators

Lawmakers have been trying to reform the California Public Utilities Commission ever since a deadly explosion killed eight people in San Bruno six years ago. Federal investigations put the blame squarely on PG&E, exposing a pattern of negligence at both the utility and its state regulators.

On Thursday, Gov. Jerry Brown signed a suite of reforms into law that set new disclosure rules for the regulatory agency, but fell short of the package proposed in June, the governor's office said.

The reforms included stricter rules for when regulators must disclosure communications with interested parties in rate-setting proceedings.

Some of these communication, known as ex parte communications, became controversial after a PG&E executive lobbied CPUC Commissioner Mike Florio and then-CPUC President Michael Peevey’s chief of staff regarding the appointment of a judge in a case pending before the commission.

That executive, Brian Cherry, repeatedly pushed for an administrative law judge he felt would be more likely to rule in the company’s favor. A host of other email exchanges between PG&E executives and high-ranking regulatory officials documented social engagements, frequent information sharing, and plans Peevey and Cherry made to visit together and drink wine on holiday getaways.

While three PG&E executives were fired for the emails, CPUC staff have either left or been disciplined. Only state lawmakers can remove CPUC commissioners.

Democratic state Sen. Mark Leno of San Francisco, who helped author the legislation, said that current CPUC rules would permit such communications and don't require commissioners to report them.

"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," Leno said in a statement.

Last week, the California state auditor released a report, saying that "the CPUC has failed to fully disclose important communications between commissioners and external parties.”

The auditor singled out another scandal, from when Peevey met with a Southern California Edison executive in Warsaw, Poland, and discussed the San Onofre shutdown settlement.

Brown said in a signing message that there were still more reforms necessary and called on the CPUC to take on these reforms. They include appointing an ethics ombudsman, establishing a Web portal to receive public complaints and creating a more streamlined process for releasing information to the public.

"These important reforms cannot wait another year. To that end, I am calling on the Commission to use its existing authority to take immediate action," Brown said in a statement.

Bay City News contributed to this report.