Energy Daily
California Gov. Gray Davis, in a public snub of a state official who has not always followed his wishes, announced New Year’s Eve that he was replacing the vocal president of the state’s public utilities commission and adding another former aide to the five-member rate-making panel.
Commission Chairman Loretta Lynch, increasingly a target of criticism by Davis (D), has been replaced by Michael Peevey, who has been serving as interim commissioner on the California Public Utility Commission (CPUC) until the end of 2002. Davis announced he would appoint Peevey to a full six-year term and designated him as president.
Peevey’s appointment in March 2002 to the CPUC was challenged by some consumer advocacy groups because of his ties to Edison International, parent company of utility Southern California Edison, and his previous backing for deregulation of California’s power markets.
Groups such as The Utility Reform Network and the Foundation for Taxpayer and Consumer Rights (FTCR) claimed Peevey would be too friendly to the interests of big business, after having served as president of both the Southern California Edison and its parent company, as well as president of NewEnergy Inc.
“Making Mike Peevey the head of the PUC is like asking Kenneth Lay to run the [Securities and Exchange Commission],” FTCR’s senior consumer advocate Doug Heller said in a December 31 release. “After what the energy industry did to California, it is shocking that Davis would give an energy company executive such a prominent position. Not only has Davis failed to place an independent consumer voice on the commission, he is letting the energy industry run the agency.”
Peevey’s position is subject to confirmation by the state Senate. FTCR is urging state senators-who did not have a chance to approve Peevey’s previous appointment as an interim commissioner-to reject the nomination.
In addition to naming the new president, Davis announced the appointment of Susan Kennedy to complete the five-member commission. Kennedy has served Davis as a cabinet secretary since 1999. Previously she served as communications director for Sen. Dianne Feinstein (D-Calif.) and executive director of the California Democratic Party.
Kennedy replaces former Commissioner Henry Duque, who was the last remaining commissioner serving on the CPUC appointed by former Gov. Pete Wilson (R). Kennedy is also serving a full six-year term.
Lynch, who once served in the governor’s office, drew Davis’ wrath after she pushed through a 30 percent increase in retail rates in March 2001, following the state’s power market meltdown. The CPUC has also come under attack from the governor and the state’s treasurer for delaying action needed for a huge state bond sale to recoup power-buying expenses during 2001.
However, Lynch has been allied with the governor in serving as a tireless critic of the Federal Energy Regulatory Commission at numerous congressional hearings.
Lynch issued a statement Tuesday saying it was “a privilege” and “a challenge” to head the agency-and that she was staying on the commission. “It is the governor’s prerogative to choose the president of the PUC. But I will continue to fight for consumers and for California’s families and businesses and as a commissioner,” she said.
She was initially tapped to serve as CPUC president in March 2000. Her term expires in 2005.
