Davis’ PUC pick jolts consumer activists

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Contra Costa Times

WALNUT CREEK, Calif.: In a move that sent angry consumer activists racing for their fax machines, Gov. Gray Davis named former Southern California Edison President Michael Peevey to the state Public Utilities Commission on Tuesday.

Davis “inexplicably appointed an avowed opponent of regulation to be one of the state’s top utility regulators,” the Utility Reform Network said in a release.

But in a move that seemed to typify the confusing and long-running scramble for control of California’s energy future, Davis paired Peevey’s appointment with another that seemed designed to blunt criticism from activists. Davis picked former TURN board chairman John Geesman, a San Francisco investment banker and 13-year Orinda resident, for the governing board of the California Independent System Operator.

With California’s experiment in electricity industry restructuring in a shambles, utilities, power sellers, consumers and taxpayers are scrambling to sort out billion of dollars in residual claims and obligations from the recent energy crisis.

In that framework, the appointment of Peevey, 64, a Democrat and former adviser to Davis, could be a key move, with the potential to redirect a five-member PUC that _ although composed of three Davis appointees _ has sometimes been at odds with the governor. Peevey replaces Republican Richard Bilas, who resigned, and will serve out a term that runs through December. Peevey, who is married to Assemblywoman Carol Liu, D-La Canada/Fruitridge, and lent $217,000 to her 2000 campaign, will receive an annual salary of $114,000.

Peevey left Edison in 1993 and headed up an energy-selling unit of AES Corp., a large power supplier and trader. Davis cited Peevey’s “three decades of experience in the energy and environmental industries and academia” and “insight on the ever-changing electricity market.”

Business groups lined up to back Peevey, including the California Business Roundtable and the state Chamber of Commerce, which predicted he would bring a “balanced and fair approach” to the commission. A spokesman for PG&E, which is regulated by the PUC and faces PUC opposition to its plan to reorganize its bankrupt utility unit, said company policy precluded comment.

But an anti-Peevey backlash formed even before his appointment. The Foundation for Taxpayer and Consumer Rights warned Monday that Peevey’s “appointment would be disastrous for consumers.”

Consumers Union, which had urged appointment of someone “free of any conflict or taint from the utilities or the energy companies,” said after Davis’ announcement that Peevey was “exactly the kind of nomination that we were urging the Governor to avoid.”

The appointment of Geesman made fewer waves. He will join current TURN lawyer Mike Florio on the five-member board of the ISO, which acts as the traffic cop for the state’s electricity transmission grid. Board members aren’t paid.

Geesman, who headed the state Energy Commission during the administration of Gov. Jerry Brown, now chairs the Power Exchange, a bankrupt energy market created by California as part of the 1998 industry restructuring. Geesman said he has known Davis since 1973, when they worked together on the campaign of former Los Angeles Mayor Tom Bradley, and had occasionally contributed to his campaigns.

The ISO’s profile rose during the energy crisis, as it scrambled to line up power to avert rolling blackouts. But doubts loom about the ISO’s future role. PG&E has asked the Federal Energy Regulatory Commission to reconstitute the ISO board, whose members were all appointed by Davis. Federal regulators are also pushing to meld California grid operations into a multi-state network. Those efforts received a boost Monday, when the U.S. Supreme Court affirmed federal regulators’ authority to set rates and rules for most of the nation’s high-voltage transmission grids. Both nominations require confirmation by the state Senate.


KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

(c) 2002, Contra Costa Times (Walnut Creek, Calif.).

Visit the Contra Costa Times on the Web at http://www.cctimes.com

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