Southern California Edison Joins PG&E in Expanding PUC Scandal

Thursday, February 12, 2015
Former PUC President Michael Peevey

When hundreds of well-wishers gather today to honor Michael Peevey, former head of California’s Public Utilities Commission (PUC), they will have something more to talk about than his 12 years of service and the escalating scandal over cozy relations with Pacific Gas & Electric (PG&E) before and after the deadly San Bruno gas pipeline explosion.

Earlier this week, Southern California Edison (SCE) disclosed that Peevey met with then-Edison executive Stephen Pickett in Warsaw, Poland, in March 2013 to talk about the troubled San Onofre nuclear power plant that has since been permanently shuttered. State law requires that contacts made between utility officials and government regulators outside normal business channels be immediately reported.

Edison said in a statement it didn’t think the meeting was important enough to report at the time, but they reconsidered when knowledge of the meeting surfaced after investigators for the state Attorney General’s office raided Peevey’s home last month.

The commission has come under fire for the perception that state regulators are partnering with utilities, rather than overseeing them, to the public’s detriment. That view was buttressed by the release of e-mails between the PUC and PG&E that revealed inappropriate exchanges, including discussions about the selection of a judge to hear the proposed $1.4-billion penalty over San Bruno lapses.

Most of the recent focus on Peevey and the PUC has focused on San Bruno, where a 2010 blast killed eight people and leveled a neighborhood. Subsequent investigation found the utility did not keep proper records of whether pipelines were safe and wasn’t performing required tests, all under the watchful of the PUC.

Peevey’s meeting with Edison in Poland occurred months before a settlement was hashed out over the abrupt and premature closure of San Onofre in San Diego County that cost consumers $3.3 billion of the $4.8 billion cost.

The two reactors at San Onofre were initially closed in January 2012 when a leak of radioactive steam was discovered. Subsequent testing found hundreds of eroded steam tubes, damaged by vibration caused by new steam generators. Edison said the problems were unknowable and unpredictable when generators were upgraded in 2010 and 2011.

Subsequent investigations showed that to be incorrect. Edison blamed Mitsubishi Heavy Industries for design flaws; and Mitsubishi blamed computer problems and bad math for the misdesigned equipment. There is evidence that both knew the design was problematic.    

Peevey is a former president of Edison.

Chris Rauber at the San Francisco Business Times reported that the $250-a-plate soiree honoring Peevey for “a lifetime of service to California” will be attended by many of the state’s most influential political operatives, but no one from PG&E. The party list was set before the Edison revelation and Rauber didn’t say whether they would be represented.

The event at the Julia Morgan Ballroom in San Francisco’s Merchant Exchange Building is hosted by former Assembly Speaker and ex-S.F. Mayor Willie Brown. “This tribute dinner by his friends and colleagues is designed to show our gratitude and recognition of Mike's many accomplishments and years of service,” co-host Susan Kennedy told the Business Times. Kennedy was Governor Arnold Schwarzenegger’s chief of staff and a former PUC commissioner.

Kathleen Brown, the governor’s sister, will be in attendance, along with California High-Speed Rail Authority Chairman Dan Richard and Michael Picker, Peevey’s replacement at the PUC.

–Ken Broder


To Learn More:

Controversial Former CPUC President to Be Feted in San Francisco Thursday (by Chris Rauber, San Francisco Business Times)

Meeting Links CPUC Probe to San Onofre (by Jeff McDonald, U-T San Diego)

SCE Reports Private Contact in 2013 with PUC Head Peevey (by Marc Lifsher, Los Angeles Times)

Southern California Edison Files Notice with State Utilities Commission, Announces Strengthened Policies Governing Contacts with the Commission (Southern California Edison)

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