Michael Peevey
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Stephen Pickett

On March 26, 2013, Michael Peevey, then president of the California Public Utilities Commission, and Stephen Pickett, then an executive vice president of Southern California Edison, had a secret huddle at the Bristol Hotel in Warsaw, Poland. Two years later, in February of this year, Edison filed an extremely late notice of this ex parte meeting acknowledging that at the covert session, Peevey, a former president of Edison, "initiated a communication on a framework for a possible resolution" of how ratepayers and utilities would split the bill for the failure of power generators at the San Onofre nuclear station.

Today (April 10), those notes were made public in a suit that San Diego attorneys Mike Aguirre and Mia Severson have filed against Edison and the utilities commission. The hearing on the suit is April 16. The notes clearly show how Peevey and Pickett were plotting to force ratepayers to pick up a huge portion of the expenses for the failure.

The notes appear to be mostly Pickett's, who was sketching out Edison's plans to have the ratepayers pick up $5 billion of the tab. At the end of the notes are Peevey's thoughts, apparently in his handwriting. Aguirre and Severson say Edison stockholders, not ratepayers, should pick up the tab, because the San Onofre failure was clearly a result of management blunders, which should not be shouldered by ratepayers.

The company that did the engineering, Mitsubishi Heavy Industries, is battling Edison over who is to blame. In the Warsaw notes, Pickett appears to be saying that in any settlement between Edison and Mitsubishi, Edison's desires should be be considered first and customers' second. The notes also state that customers should have responsibility for replacement power but should get certain insurance recoveries.

According to the notes, decommissioning costs should "remain in rates through time of decommissioning." That means customers would be stuck with the costs until the decommissioning task was completed. Later, the commission's Office of Ratepayer Advocates and the Utility Reform Network (TURN) proposed this, along with Edison and San Diego Gas & Electric. It is remarkable how the Warsaw pact outline is almost exactly what was eventually decided, purportedly after consultation with the Office of Ratepayer Advocates and TURN.

Basically, the deal sketched out between Peevey and Pickett was what was foisted on ratepayers. Commissioner Mike Florio made some minor tweaks but generally followed the Warsaw pact. Peevey is now under both state and federal investigation for this secret meeting, among other things.

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Comments

Anon92107 April 11, 2015 @ 4 a.m.

Don, your excellent investigative reporting proves that Peevey, Pickett and Brown must be arrested for gross criminal negligence including threats to public safety and the California economy.

San Onofre came far too close to being California's Fukushima, can you imagine having to shut down I5 and the area around SONGS? When you add this to Peevey and PG&E's gas pipeline murders, the out of control CPUC and California state government must be totally overhauled.

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Don Bauder April 11, 2015 @ 7:15 a.m.

Anon92107: I agree that there should be criminal penalties in this highly smelly arrangement. CPUC deliberations are supposed to be public; this one was completely secret.

State and federal investigators are theoretically working on the case. My fear is that this will be stalled and stalled and stalled until it peters out. The AG is running for Senate. She doesn't want to cross Gov. Jerry Brown, a good friend of Peevey. Federal investigators don't have a heavyweight team on this.

You just wait. This investigation will slowly die as ratepayers are raped to cover mistakes made by management. Hopefully, enough utility ratepayers will remember what happened so that some will raise hell. But it will make no difference. Sorry to have to report this. Best, Don Bauder

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Anon92107 April 11, 2015 @ 11:43 a.m.

Don, I no longer believe in democrats or republicans, they both enable themselves to kill with impunity, including innocent people and Democracy.

Interesting that Brown and Peevey are 1961 Berkeley graduates, so it is no surprise that Berkeley has failed the people of California by creating a welfare program where professors and administrators are constantly proving themselves to be detached from the mundane needs of humanity and more attached to immediate profitability.

It is no longer possible to tell the difference between politicians and university intellectuals.

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Don Bauder April 11, 2015 @ 12:19 p.m.

Anon92107: Peevey and Brown have been friends for a long, long time, but I don't know that they were friends at Berkeley. Best, Don Bauder

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danfogel April 11, 2015 @ 1:40 p.m.

don bauder I don't know about Peevey, but I am pretty certain that Brown only did his senior year at Berkeley

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Anon92107 April 11, 2015 @ 2:12 p.m.

danfogel, for what it's worth, Wiki says Brown got his B.A. at Berkeley in 1961. I was there at the same time, the world has changed most incredibly since then, and we are leaving the worst possible legacy for our newest generations because we failed to protect the long-term future of the planet for them.

We had the best education, opportunities and lives in history, but we allowed our political, intellectual and economic leaders to plunder paradise in California, and around the world, enabling global warming, violence and inequalities that are now completely out of control.

Brown, Peevey and Berkeley are worst case examples of what went wrong.

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Don Bauder April 11, 2015 @ 4:50 p.m.

Anon92107: Cal-Berkeley has been a victim of the cultural decline you cite. Ditto my alma mater. I went to the University of Wisconsin. The nitwit who is governor of that state wants to cut something like $300 million out of the UW budget at the same time something like $200 million of taxpayer money will go to the Milwaukee Bucks pro basketball team for an arena. This is insanity. Best, Don Bauder

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Anon92107 April 12, 2015 @ 3:11 a.m.

Don, what we keep proving is that while humans have the best brains of any animal on the planet, we are the dumbest thinkers.

On Big Bang Theory, Leslie Winkle says it best when she keeps calling Sheldon Cooper a "Dumbass."

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Don Bauder April 12, 2015 @ 6 p.m.

Anon92107: As my father used to say, there are more horses' asses than there are horses. Best, Don Bauder

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danfogel April 12, 2015 @ 8:35 a.m.

anon92107 According to his official bio. Brown spent a year at the University of Santa Clara, left to attend Sacred Heart Novitiate, a Jesuit seminary and in1960,left there and enrolled at UC Berkeley for his senior year. That was my only point, that he spent only 1 yr at Berkeley. I suspect that with him being at Berkeley for only one year, it had more of an effect on him rather than the other way around, which is what you seem to suggest.

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Anon92107 April 12, 2015 @ 11:10 a.m.

danfogel, thanks for the clarification. I no longer have any respect for the Berkeley establishment. They have totally failed to learn from the lessons of history by creating a welfare program where professors and administrators are constantly proving themselves to be detached from the mundane needs of humanity and more attached to immediate profitability.

If Socrates came back today, he would see that we still fail at truth and morality and probably ask for another cup of hemlock.

But I am most thankful that I met and married my most wonderful classmate, life doesn't get any better than that.

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Don Bauder April 14, 2015 @ 8:36 p.m.

Anon92107: Socrates would definitely disapprove of today's world. Best, Don Bauder

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Don Bauder April 12, 2015 @ 6:08 p.m.

danfogel: Brown's religious background is interesting. In the late 1980s and early 1990s, Edison was trying to take over SDG&E. Peevey, as an exec vp of Edison, was in charge of the raid. I used to debate Peevey on TV, radio, and in front of audiences. Time after time, he would mention his background at religious schools, obviously to impress the audience; that made me gag because I knew he was not telling the truth in points he was making.

So Brown and Peevey may have religious backgrounds in common. Their politics are also similar. So I assume that, whenever they became friends, they had those things in common. Best, Don Bauder

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Anon92107 April 13, 2015 @ 3:31 a.m.

Don, hopefully they'll be able to share a jail cell and pray together for the people they killed in San Bruno and threatened with radiation in Orange County as a result of their hellaciously felonious corruption.

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Don Bauder April 14, 2015 @ 8:38 p.m.

Anon92107: Did you say prey together or pray together? The first is more apt. Best, Don Bauder

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Anon92107 April 15, 2015 @ 4:12 a.m.

Don, I had the same thought, it was just too easy, because it is true. You said it better than me anyway.

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danfogel April 13, 2015 @ 8:04 a.m.

Peevey received his B.A. in economics from Berkeley in 1959. He completed his Masters work in 1961. I don't know that someone finishing a Masters Economics program would have been in the same circles as a senior finishing his Bachelors program in Classics.

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Don Bauder April 14, 2015 @ 8:39 p.m.

danfogel: They could have swilled whiskey at the same saloon. Best, Don Bauder

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danfogel April 14, 2015 @ 9:04 p.m.

don bauder. Of course, anything is possible. But my point was this. Anon92107 seems to be suggesting that CalBerkely is somehow responsible for the decline of America, if not the entire western world, by producing the kind of people that turn out like Peevey and Brown. So the point, actually 2 of them, are that being at the same university for one overlapping year doesn't mean they necessarily knew each other, thereby establishing a pathway to the corruption/ignorance that was to come, and point 2, that in being there in 1961, anon92017 was there at least 1 year when Peevey was there and possibly as many as 6. That means that A- he could have been acquainted with 1 or both of them also, and B- he was subject to the same influences while there as both Peevey and Brown were. Since he seems to be placing part of the blame on Berkeley for influencing Brown and Peevey, why should we assume that he/she was immune from the same influence.

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Anon92107 April 15, 2015 @ 4:23 a.m.

danfogel, Holy Cow, I feel like I'm dealing with Sheldon Cooper of Big Bang Theory:) I'll just stick with the fact of life that Berkeley professors and administrators are constantly proving themselves to be detached from the mundane needs of humanity and more attached to immediate profitability.

Plus the fact that historians Will and Ariel Durant concluded, after over 40 years of research and Book of the Month Club publications, that civilizations fail because politicians and intellectuals fail to deal with the challenges of change. Berkeley Ivory Tower dwellers are still proving that.

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danfogel April 15, 2015 @ 8:05 a.m.

anon92107 Thank you for illustrating my point so eloquently. The true fact of life here is that the point of view you profess in this, and in many, if not most, of your posts, your "facts of life", are nothing more than your opinions. The fact that Peevey and Brown were both at Berkeley means nothing more than the fact that you were there at that time also. I didn't go to Berkeley, I went to school in San Diego. But I do personally know people who did, and they are quite proud of the fact that they earned their degrees there. You are of course entitled to your opinion of Berkeley. As I said, I didn't attend. But that said, in my mind the list, the very,very long list of Nobel laureates, Turing Award laureates, National Medal of Science and National Medal of Technology, Gödel, Wolf, and Fields winners tells me they must be doing something right. And that doesn't even include the various people who have won Pulitzers, Academy awards, Emmys, the authors, athletes, members of academia..the list goes on and on of people who are Berkeley grads who have not only excelled in their chosen field, but in many cases helped make the world a better place. You have your own opinion and I respect your right to express it, though I have never read anything by anyone who has expressed such an unpropitious view of the world as you do. You must be a blast at parties. Oh well, to each their own.

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Don Bauder April 11, 2015 @ 4:45 p.m.

danfogel: We could easily look that up. Best, Don Bauder

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MURPHYJUNK April 11, 2015 @ 8:06 a.m.

arrest both of them, and use the police tactic of whoever sings first gets a reduced punishment.

they would probably be ratting out a lot of names up and down the chain of command just to save their smarmy hides.

1

Don Bauder April 11, 2015 @ 8:22 a.m.

Murphyjunk: This one started at the top, but it did go down the chain of command to a certain extent. Florio slightly changed the ideas that Peevey and Pickett had sketched out far in advance.

Think about it. The decision had been made in Poland in 2013. Then the CPUC held many hearings, pretending it was objectively deciding what to do. It was all a ruse -- the decisions had already been made. Best, Don Bauder

2

MURPHYJUNK April 11, 2015 @ 8:35 a.m.

there has to be more involvement than just the PUC guys, the investigation ( if allowed to proceed unhindered ) will go from the top down, and sideways too. ( probably the reason it will be squelched before some politicians get named)

1

Don Bauder April 11, 2015 @ 12:21 p.m.

Murphyjunk: The investigators need to have a big enough staff to go from the top down and also sideways. And I don't believe they are adequately staffed. Best, Don Bauder

0

Don Bauder April 11, 2015 @ 7:37 a.m.

AlexClarke: Yes, there appear to be RICO violations. But as I report above, this one will be buried. Best, Don Bauder

1

MURPHYJUNK April 11, 2015 @ 8:08 a.m.

it appears they are being given lots of time to destroy/fabricate evidence before they are hauled in on charges.

2

Don Bauder April 11, 2015 @ 8:28 a.m.

Murphyjunk: A law firm has been hired to decide what documents to hand over to Aguirre and Severson. One of the lawyers is being paid $882 an hour.

You just wait. Documents won't be handed over. The CPUC will claim the basic documents are privileged. So a judge will be able to kill the suits, as the CPUC covers up everything.

With the revelation of the secret Warsaw pact, CPUC and Edison can hardly claim that the decision to rape ratepayers was made through a deliberative process. But if they don't turn over the documents, what can the public do? I have a suggestion for ratepayers: RAISE HELL! Best, Don Bauder

3

MURPHYJUNK April 11, 2015 @ 8:37 a.m.

I have a suggestion, sic the feds on them and confiscate all the info before its gone or tampered with. ( if its not too late already)

( I wonder if the $882 per hour lawyers get a break on their elect bill for all the power their paper shredders use ? )

1

Don Bauder April 11, 2015 @ 12:22 p.m.

Murphyjunk: I wish I had thought of that paper shredder line. Congratulations for coming up with it first. Best, Don Bauder

2

MURPHYJUNK April 11, 2015 @ 12:37 p.m.

probably only one of the few things that are printable that comes to mind about this situation.

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Don Bauder April 11, 2015 @ 4:53 p.m.

Murphyjunk: I admire your restraint in describing this ratepayer ripoff. Best, Don Bauder

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monaghan April 11, 2015 @ 1:04 p.m.

I like the Murphyjunk's paper shredder and excellent line about "whoever sings first gets a reduced punishment." I also like the Reader photo of Michael Peevey going to hell and wish someone would splice an image of Governor Jerry Brown alongside his buddy. Finally, Don Bauder's prediction that all this will come to nought for lack of adequate prosecution staff is deeply depressing. Nonetheless, ratepayers owe crusading attorneys Mia Severson and Mike Aguirre a vote of thanks for their work on our behalf.

4

MURPHYJUNK April 11, 2015 @ 2:39 p.m.

Jerry is in the pict, just on his knees in front of Peevey. out of sight.

1

Don Bauder April 11, 2015 @ 4:58 p.m.

Murphyjunk: Reader art employees get credit for that photo of Peevey descending into the underworld. I didn't know about it until I saw it. Best, Don Bauder

1

Don Bauder April 11, 2015 @ 4:56 p.m.

monaghan: It's obvious that the CPUC the colluding utilities, Edison and San Diego Gas & Electric, and law firms are trying to break Aguirre and Severson financially as punishment for bringing out the truth. Best, Don Bauder

0

dwbat April 12, 2015 @ 7:54 p.m.

Like this? Looks like a "hot" bromance!

None

0

Don Bauder April 13, 2015 @ 7:13 a.m.

dwbat: I like it a lot. Best, Don Bauder

0

dwbat April 13, 2015 @ 12:38 p.m.

And here's some slightly-changed lyrics to "Side by Side" as sung by Brown and Peevey:

Oh! We both got barrels of money We're never ragged nor funny But we'll travel along Miming a song Side by side I don't know what's a-comin' tomorrow Maybe it's indictment and sorrow But we'll travel the road Mining our lode Side by side Through all kinds of weather What if arrests should fall Just as long as we're together It really doesn't matter at all All investigations died, and departed We'll be the same as we started Just traveling along Never found wrong Side by side

1

Wabbitsd April 11, 2015 @ 9:41 p.m.

Don, is there any fund set up where people could send money to support Aguirre and company, do you know?

0

Don Bauder April 12, 2015 @ 6:13 p.m.

Wabbitsd: I am not aware of any group specifically set up to help finance Aguirre and Severson. There are several groups fighting the CPUC's corruption in this matter. Best, Don Bauder

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monaghan April 14, 2015 @ 10:36 a.m.

Dwbat -- Wonderful that you could produce this image of co-conspirators who are screwing the people of San Bruno who lost neighbors and three dozen homes to the PG&E gas explosion two years ago. The guys depicted going to hell are (L to R) Michael Peevey, former head of the California Public Utilities Commission, and his very good friend, Governor Jerry Brown.

0

dwbat April 14, 2015 @ 12:29 p.m.

It wasn't that difficult to do. Just basic Photoshop 101.

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Don Bauder April 14, 2015 @ 8:45 p.m.

dwbat: I will sign up for Photoshop 101. Best, Don Bauder

0

Don Bauder April 14, 2015 @ 8:44 p.m.

monaghan: The flames are courtesy the San Diego Reader art department. Best, Don Bauder

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dwbat April 14, 2015 @ 10:57 p.m.

And I extracted the Brown headshot from a photo where he was kissing his wife (after winning reelection).

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MURPHYJUNK April 15, 2015 @ 10:38 a.m.

so, did the rate payers pay for the booze and hookers at their fiasco at the Bristol Hotel in Warsaw?

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Don Bauder April 16, 2015 @ 6:39 p.m.

Murphyjunk: We know of no booze and hookers at the Bristol. However, the telltale emails show us that Peevey has a fondness for wine, particularly when a utility is providing it. Best, Don Bauder

0

eastlaker April 15, 2015 @ 11:51 a.m.

Speaking of scripts, when will the James Bond series use Peevey for a model of evil genius? Or should there be a new series, with Peevey as the anti-hero? Is there any evidence that Peevey once acted in a way that would benefit the greater good, or has he always been strictly the 'looking out for number one' kind of guy?

I ask this, because I do think he will find a place somewhere in the collective consciousness, and it won't be a place of honor.

1

Don Bauder April 16, 2015 @ 6:41 p.m.

eastlaker: Peevey championed alternative energy. That's how he endeared himself to environmentalists. But I always doubted his sincerity in that. There is no question that his main objective while heading the CPUC was making sure the utilities achieved fat profits at the expense of ratepayers. Best, Don Bauder

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dwbat April 15, 2015 @ 5:52 p.m.

With that smirk on his face, he just LOOKS like a slimy crook.

1

Don Bauder April 16, 2015 @ 6:46 p.m.

dwbat: His fingers are sticky, too, but you can't see that in the photo. Best, Don Bauder

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Don Bauder April 16, 2015 @ 6:47 p.m.

eastlaker: He does have a conscience. He just left it behind some days when he was at the CPUC. Best, Don Bauder

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Don Bauder April 16, 2015 @ 6:45 p.m.

Murphyjunk: To say Peevey has no conscience is to label him a sociopath. I would not do that -- ever. He just championed the utilities and their profits and didn't give a hoot for ratepayers. Best, Don Bauder

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MURPHYJUNK April 17, 2015 @ 10:32 a.m.

"He just championed the utilities and their profits and didn't give a hoot for ratepayers"

sounds a bit like a lose definition of a sociopath to me.

0

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