James Hunter

Monday, July 6, 2015

CPUC, More Search Warrants issued! June 6, 2015

More Search Warrants issued......................How much has CPUC actions cost us (ratepayers)?

Utility Company
Total Cost
Cost to Ratepayers
San Bruno pipeline failure
2.2 billion
$1.6 billion
San Onofre Nuclear Plant shutdown
4.7 billion
$3.3 billion

6.9 billion
$4.9 billion

It appears that ex-President Peevey has tried to give the utilities $4,900,000,000 windfall by charging ratepayers, for their mistakes. Another way to view this is $4,900,000,000 / 37,000,000 million California population or:

for every man, woman and child in California. 

Keep in mind we already paid for maintaining the nuclear plant and the pipeline, now they want us to pay again to fix them again? PG&E wanted a tax break in addition on the "penalty that was imposed". What other utility "friendly" terms been privately been negotiated between CPUC and the Utilities? Don't forget the 10 class A Public Water Utilities are also supposed to be "regulated by CPUC", including the San Jose Water Company.

Another example of how the CPUC management and Commissioners continue to respond was the discrimination inherent in the drought rules, approved for San Jose Water Company
"A state agency representing consumers (ORA Office of Ratepayer Advocates" said Tuesday that it will try to overturn strict water conservation rules that took effect this week for 1 million residents of San Jose and neighboring Silicon Valley communities, on the grounds that they violate state law by imposing penalties on homeowners but not businesses or apartment owners."
"We think they are discriminatory, unfair and unreasonable," said Danilo Sanchez, program manager at the Office of Ratepayer Advocates. "They need to put some kind of burden on their commercial and industrial customers. We want to make sure that all customers are treated in a fair and equitable way."
You should be aware that over a 1,000 protests were sent by SJWC customers, which the Rami Kahlon, Director of Water & Audit division admitted were ignored.
"More than 1,000 people sent the PUC protest letters claiming the rules were unfair, said Rami Kahlon, director of the PUC's Division of Water and Audits in San Francisco.Kahlon said the PUC staff denied the protests because it's giving the private water companies it regulates wide latitude crafting the rules, with the main goal being that they hit water conservation targets the state has assigned them." 
Blogger comment: Reality is the State Board of Water Resources recommended SJWC and San Jose City Water require a 20% reduction in water use. The 30% was somewhat arbitrarily decided by Santa Clara Valley Water District as the required reduction, based on concerns about ground subsidence, of 17 feet water level drop at a measurement well. 

In addition Mr. Danilo Sanchez, CPUC ORA responded in an email, to me:
"Hi Mr. Hunter, you have 10 days from the date you received the disposition letter from the Division of Water and Audits.  The Office of Ratepayer Advocates will be submitted a request for review.  However, we don’t know how long it will take the Division of Water and Audits to draft a resolution that would be put forth to the Commission for a vote."
CPUC ex-President/Commissioner Peevey left his position in December 2014, but his legacy apparently lives on and on!. His departure was closely followed both the State of California and Federal Attorneys offices launching an investigation into Mr. Peevey's activities related to PG&E (San Bruno gas pipeline) and other CPUC staff. The investigation also searched his Mr. Peevey's home office removed computers, notes and accessed his email. Several senior management staff were terminated by PG&E. To date the public announcements have indicated a serious bias appears to have tainted CPUC decisions, in favor of the utilities needs, rather than ratepayers.

On July 6, 2015 search warrants were served on both CPUC, San Francisco office and Southern California Edison, office outside Los Angeles. Click to see search warrants and list of individuals email and other sources of information regarding the unpublished ex parte "private discussions ex-President Peevey had with Edison management about having ratepayers pay 70% of SONGS (over $3.3 billion), San Onofre Nuclear Plant shutdown costs.

Since Mr. Peevey's departure his Chief of Staff Carol Brown apparently reverted to her position as an ALJ (Administrative Law Judge), then moved to the Division of Water & Audit and has apparently retired, but is also named in the search warrant served on CPUC. Current commissioner and and senior management are named, read the search warrant and see over two dozen who are named.

The dance goes on at CPUC, how long is it going to be and how many more dollars will it cost us?
"For many years before scandal broke, the PUC under Peevey and several predecessors maintained a steady pattern favoring the interests of regulated, privately owned corporations over those of the consumers they serve.This pattern extended from pricing to maintenance and safety concerns, from easy OKs of power plant siting to lack of concern over nuclear safeguards at the now-closed San Onofre Nuclear Generating Station and the Diablo Canyon nuclear power station. It has cost consumers billions of dollars over decades, costs that climb each day.This has been achieved via a sort of kabuki dance, where utilities routinely ask far more in rate increases than they know they’re entitled to. The PUC responds by cutting the requests, still giving utilities larger increases than reality justifies. Then both the commission and the companies brag about being “consumer-friendly.”The dance went on unchecked for decades, legislators paying virtually no heed. The lawmakers also routinely rubber-stamped appointees to the commission named by current Gov. Jerry Brown and predecessors like George Deukmejian, Pete Wilson, Gray Davis and Arnold Schwarzenegger."
The initial issuance of search warrants and the subsequent second round of warrants is the opportunity to push Sacramento to re-organize CPUC, so that it represents it's customers, us the ratepayers and regulates in a fair and ethical manner the utilities. It's taken decades to reach the current state of loss of public trust in CPUC. It's probably also impossible to completely re-coup or reverse the excessively favorable decisions biased, in favor of the regulated utilities.

Several suggestions have been made to institute an Inspector General function or a separate consumer oversight committee, in either case making ORA stronger to better represent ratepayers, with reporting outside CPUC management would be a really good starting point.


  1. I would love to know the link between the board members of the water company and the super pacs they fund. After all it is election season and $9.5 mil is a drop in the proverbial presidential bucket.

    1. That's quite a research project! Since many "donations" are passed through third-parties. The impact the class A water utilities would want to have an effect on are state and local elections, rather than national.