Davis names Michael Peevey new power regulator

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The Associated Press State & Local Wire

SACRAMENTO: Gov. Gray Davis appointed a former Edison International and Southern California Edison executive Tuesday as the newest member of the Public Utilities Commission, the state agency that regulates Edison and other investor-owned utilities.

Economist and former Edison president Michael R. Peevey was picked to replace Richard Bilas at the PUC, a week after Bilas announced he was resigning to care for his ailing wife and because of policy frustrations.

Davis appointees hold four of the five commission seats, which could help Davis promote his energy policies as the state attempts to settle a $10 billion power-buying debt and resolve its flawed attempt at deregulating its electricity market. The remaining GOP-appointed commissioner is Henry Duque.

The California Chambers of Commerce praised Peevey’s appointment, saying he would bring a “balanced and fair approach” to the regulatory commission.

Peevey’s “broad and diverse experience will provide the PUC with an appreciation of the needs of residential consumers, business consumers and regulated entities,” said Allan Zaremberg, the business group’s president.

But several consumer advocates blasted the decision, saying Peevey has conflicts of interest that could harm the state’s utility customers. “Mike Peevey is a former Edison executive. He used to head a company that consults for the private power companies that price gouged in California,” said Doug Heller of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

Michael Shames, president of Utility Consumers Action Network in San Diego, called Peevey “the ultimate insider. “Mr. Peevey’s appointment sends the absolutely wrong signal to the public about the future of regulation in California,” Shames said.

Some commissions have members from related industries to lend their insight, but regulatory commissions shouldn’t pull from the businesses they oversee, said Bill Ahern of Consumers Union. “The constitutional regulatory commission has to have people who are open-minded and know they’re supposed to protect ratepayers,” he said.

Consumers Union and 13 other consumer and environmental groups wrote Davis last week to ask that he “please, please not appoint someone from the utilities,” Ahern said. “And to please meet with us before making a decision.”

Democratic state Sen. Debra Bowen, chairwoman of the Senate Energy Committee, said the timing of the announcement – on California’s primary election day – “strikes me as an unusual time to make an appointment to fill such an important vacancy.”

Peevey, who will have to be confirmed by the Senate, will have to prove he will represent the public and not just his former utility, Bowen said.

Ahern said he and Peevey “knocked heads a lot” when Ahern was a consumer advocate and Peevey headed Edison. “He’s professional to work with,” Ahern said. “Nice guy, terrible policy.”

Peevey’s term begins Saturday and lasts the remainder of Bilas’ term, which ends at the end of this year. He also has been chief executive of TruePricing Inc., a technology company focused on helping large companies and government institutions track their energy costs. From 1995 to 2000, he was president of NewEnergy Inc., the nation’s largest energy service provider. He led Edison between 1990 and 1993.

“His insight on the ever-changing electricity market will be invaluable to the commission as it makes decisions about California’s energy future,” Davis said in a statement.

A legal settlement negotiated in secret by the Davis administration last year helped Edison avoid bankruptcy by maintaining record high electric rate hikes for the next several years and forgoing shareholder dividends. Before the settlement, Davis spent months lobbying the Legislature to buy Edison‘s transmission lines to help the utility stay financially stable.

Peevey also advised Davis during the energy crisis last spring, working without pay to secure long-term energy contracts to stabilize California’s power supply.

After review by PUC counsel, Peevey will resign from any position and divest any holdings that might constitute a conflict of interest, the statement said. Peevey holds both bachelor’s and master’s degrees in economics from the University of California, Berkeley, and is married to Assemblywoman Carol Liu, D-La Canada Flintridge.

Davis also announced Tuesday the appointment of John L. Geesman as a member of the Independent System Operator governing board. The ISO manages the state’s power grid, and has come under fire from critics for working too closely with lawmakers when making energy decisions.

Since 1985, Geesman has been the managing director of fixed income banking for RBC Dain Rauscher Incorporated in San Francisco. Since 2000, he has served as chair of the Managed Risk Medical Insurance Board, also as a Davis appointee.

Geesman also is former president of the board of directors for San Francisco-based consumer advocacy group The Utility Reform Network and a member of the Sierra Club. He earned a bachelor’s degree from Yale University and a juris doctor degree from Boalt Hall, University of California, Berkeley.

Associated Press Writer Karen Gaudette contributed to this report.


On the Net:

The California Public Utilities Commission: http://www.cpuc.ca.gov

The California Independent System Operator: http://www.caiso.com

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