PUC Reforms Still Needed After PG&E Blast In San Bruno, Lawmakers Say

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California lawmakers say they will push for extensive reforms — including a possible amendment to the state Constitution — after efforts to revamp the troubled agency failed in the recently concluded legislative session.

Pressure to overhaul the PUC has intensified after several key reforms came up short. The state agency, whose lax oversight of PG&E played a key role in the deadly San Bruno explosion, has been scarred by multiple scandals, including revelations of cozy ties to, and improper communications with, the state’s major power companies, including PG&E.

“This is too big of an issue to let go,” said state Sen. Jerry Hill, a San Mateo Democrat whose district includes the San Bruno neighborhood leveled in the 2010 gas pipeline blast. “It’s clear we are going to move forward with legislation and continue the reforms that have been started.

“The PUC may have become too big to succeed.”

One key measure would have forced the PUC to concentrate primarily on oversight of electricity and gas utilities. The bill called for a process to strip the agency of its authority to regulate transportation companies such as Uber and Lyft, as well as telecommunications companies. The legislation was authored by Assemblyman Mike Gatto, D-Los Angeles. Gatto’s district includes Southern California Gas’ Aliso Canyon storage facility, where a massive leak forced the evacuation of more than 8,000 homes last October.

“I was profoundly disappointed about the way things went down in the Legislature on my bill,” said Gatto, who is being termed out in December. “We need a regulator that can concentrate on the things that mean the most to public safety, to the loss of life and limb, a regulator that is more focused and more accountable.”

In April 2015, the PUC imposed a $1.6 billion penalty on PG&E for its role in the San Bruno explosion, in which eight people were killed. Last August, a federal jury found PG&E guilty on six criminal charges for illegal actions before and after the blast, including one count of obstructing federal investigators.

The disclosure of tens of thousands of emails revealing improper contact between the PUC and key PG&E executives has painted a picture of an agency that maintained cozy ties and a network of back-channel communications with the utility.

The independent state auditor has criticized the PUC for allowing itself to become too closely tied with the state’s biggest power companies — PG&E, Southern Cal Edison and Sempra Energy. Separately, the state Fair Political Practices Commission is investigating the California Democratic Party for its role in a series of decisions by the PUC.

Other disclosures have raised questions about how the PUC crafted a settlement in which ratepayers, and not shareholders of Southern California Edison, would pay for 70 percent the $4.7 billion cost to close the San Onofre nuclear power plant in San Diego County.

“The PUC is country club, and it’s a country club that goes back decades,” said former PUC Commissioner Loretta Lynch, a vocal critic of the agency’s oversight of the state’s utilities.

Lynch also said she believes that Gov. Jerry Brown meddled in legislative deliberations to the extent that major reforms died in the last legislative session.

“I have no doubt that the governor’s fingerprints are all over the coffin of the major PUC reforms that failed,” Lynch said.

If the Legislature can’t pass reforms, a push may be undertaken to place a constitutional amendment on the ballot for California voters to consider, Gatto said.

“I have been approached by like-minded reformers with resources to place a more comprehensive set of reforms on the ballot,” Gatto said. “The breach of the reform agreement and the manner in which it was thwarted has only reconfirmed the need for genuine regulatory reform in California.”


George Avalos is a business reporter for the Bay Area News Group.

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