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Shut up! Shut up!

Edison admits secret huddle with Michael Peevey on San Onofre

Michael Peevey
Michael Peevey

This afternoon (February 9), Southern California Edison belatedly filed a document with the California Public Utilities Commission, admitting that the company met secretly with former commission president Michael Peevey.

At the secret meeting, Peevey suggested the framework for the San Onofre settlement that will cost ratepayers $5 billion as a result of the closing of the San Onofre nuclear plant.

Edison said it "respectfully submits this late-filed Notice of Ex Parte Communications." How late? The secret meeting was on March 26, 2013, at the Bristol Hotel in Warsaw, Poland. Peevey met with Edison's executive vice president of external relations, Stephen Pickett.

"The meeting was initiated by Mr. Peevey," revealed Edison. "In the course of the meeting, Mr. Peevey initiated a communication on a framework for a possible resolution" of the then-pending subject of how shareholders of Edison and Sempra, co-owners of the nuclear plant, and ratepayers would split the bill for the closing of the plant. Much later, the CPUC's office of ratepayer advocates, Edison, San Diego Gas & Electric, and the The Utility Reform Network (TURN) came out with the so-called compromise that will cost ratepayers $5 billion.

Many months after the secret conclave, San Diego attorney Mike Aguirre asked Peevey at a public meeting if he had played any role in the decision-reaching process over San Onofre. Peevey blew up, denied that he had, and told Aguirre to "Shut up! Shut up!" Peevey growled that he didn't have to "answer your goddamned questions!"

It is important that, as president of the CPUC, Peevey has been caught telling a falsehood about his role in the deal that — unless it is reversed — will pinch ratepayers for mistakes that were made by Edison's management. Aguirre and others argue that shareholders, not ratepayers, should pay for management mistakes.

Edison admitted this afternoon that Pickett took notes during the meeting, but Edison "does not have a copy of those notes." Obviously, Pickett has to be put under oath and asked if he knows what happened to the notes.

Edison argued in today's confession that "an ex parte notice was not filed at that time because it was believed that (a) Mr. Pickett's update on [San Onofre] restart efforts was permissible and not reportable, and (b)...the substantive communications on a framework of the [San Onofre situation] was made by Mr. Peevey to Mr. Pickett, and not from Mr. Pickett to Mr. Peevey."

By this admission, Edison is hanging its former president, Peevey, who had no business as a regulator dictating terms of an action that he later voted on.

"This vindicates opponents of the so-called settlement in which ratepayers will be forced to pay up to $5 billion for the San Onofre closing," says Aguirre. The settlement will have to be reconsidered, he says. Also, "this requires a criminal investigation."

There is already a criminal investigation of Peevey. Aguirre says that Edison filed this belated document with the CPUC as a result of the attorney general's raid of Peevey's home, in which his computer and other documents were seized. The search warrant for the raid mentioned papers related to the San Onofre deal.

Peevey's supporters are scheduled to toast him at a soiree February 12 at the Merchant Exchange Building, 465 California, San Francisco. Aguirre, his law partner Maria Severson, and Ray Lutz of Citizens Oversight will speak at a press conference in front of the building from 5 to 7 p.m. With Edison's new revelation today, there is a possibility that the meeting hailing Peevey will be canceled, although no one has mentioned that yet.

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Michael Peevey
Michael Peevey

This afternoon (February 9), Southern California Edison belatedly filed a document with the California Public Utilities Commission, admitting that the company met secretly with former commission president Michael Peevey.

At the secret meeting, Peevey suggested the framework for the San Onofre settlement that will cost ratepayers $5 billion as a result of the closing of the San Onofre nuclear plant.

Edison said it "respectfully submits this late-filed Notice of Ex Parte Communications." How late? The secret meeting was on March 26, 2013, at the Bristol Hotel in Warsaw, Poland. Peevey met with Edison's executive vice president of external relations, Stephen Pickett.

"The meeting was initiated by Mr. Peevey," revealed Edison. "In the course of the meeting, Mr. Peevey initiated a communication on a framework for a possible resolution" of the then-pending subject of how shareholders of Edison and Sempra, co-owners of the nuclear plant, and ratepayers would split the bill for the closing of the plant. Much later, the CPUC's office of ratepayer advocates, Edison, San Diego Gas & Electric, and the The Utility Reform Network (TURN) came out with the so-called compromise that will cost ratepayers $5 billion.

Many months after the secret conclave, San Diego attorney Mike Aguirre asked Peevey at a public meeting if he had played any role in the decision-reaching process over San Onofre. Peevey blew up, denied that he had, and told Aguirre to "Shut up! Shut up!" Peevey growled that he didn't have to "answer your goddamned questions!"

It is important that, as president of the CPUC, Peevey has been caught telling a falsehood about his role in the deal that — unless it is reversed — will pinch ratepayers for mistakes that were made by Edison's management. Aguirre and others argue that shareholders, not ratepayers, should pay for management mistakes.

Edison admitted this afternoon that Pickett took notes during the meeting, but Edison "does not have a copy of those notes." Obviously, Pickett has to be put under oath and asked if he knows what happened to the notes.

Edison argued in today's confession that "an ex parte notice was not filed at that time because it was believed that (a) Mr. Pickett's update on [San Onofre] restart efforts was permissible and not reportable, and (b)...the substantive communications on a framework of the [San Onofre situation] was made by Mr. Peevey to Mr. Pickett, and not from Mr. Pickett to Mr. Peevey."

By this admission, Edison is hanging its former president, Peevey, who had no business as a regulator dictating terms of an action that he later voted on.

"This vindicates opponents of the so-called settlement in which ratepayers will be forced to pay up to $5 billion for the San Onofre closing," says Aguirre. The settlement will have to be reconsidered, he says. Also, "this requires a criminal investigation."

There is already a criminal investigation of Peevey. Aguirre says that Edison filed this belated document with the CPUC as a result of the attorney general's raid of Peevey's home, in which his computer and other documents were seized. The search warrant for the raid mentioned papers related to the San Onofre deal.

Peevey's supporters are scheduled to toast him at a soiree February 12 at the Merchant Exchange Building, 465 California, San Francisco. Aguirre, his law partner Maria Severson, and Ray Lutz of Citizens Oversight will speak at a press conference in front of the building from 5 to 7 p.m. With Edison's new revelation today, there is a possibility that the meeting hailing Peevey will be canceled, although no one has mentioned that yet.

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Comments
27

Crooks all. The entire PUC should be disbanded and all employees fired. Everyone who had anything to do with SONGS should be prosecuted including all executives of the utility companies. They all belong in jail. Further Edison and all other utility owners of SONGS should be sized and put into public ownership. The stockholders should be stripped of all stock. Oh well one can only dream.

Feb. 9, 2015

AlexClarke: Peevey, his onetime top assistant (since moved to another post), and another commissioner, Mike Florio, should face criminal charges. It seems that Peevey is a cinch for criminal charges, unless the usual politics intervene. (Peevey is a close friend of Jerry Brown. Kamala Harris wants to run for U.S. Senate and will want Brown's enthusiastic support. On the other hand, winning this case will help her get elected to the Senate. She is on the horns of a dilemma.)

I agree that the CPUC should be cleaned out. Peevey's former assistant, who was helping PG&E in its judge-shopping over San Bruno, became an administrative law judge. How can she remain there? How can Florio, who gave assistance to PG&E in its efforts to get a friendly judge, remain on the commission. Or remain out of prison?

Remember, too, that Aguirre had this internal plot all figured out. He challenged Peevey and the administrative law judge about the collusion. So they denied him and his law partner, Maria Severson, any intervenor fees. Aguirre went to court to get fees and was quickly rejected. He cannot be quickly rejected anymore. On appeal, the courts cannot just dismiss this. It's out in the open. The whole subject of intervenor fees has to be scrutinized. Intervenors, including UCAN, got fees for very little work because they licked Peevey's boots.

Peevey was head man for 12 years. The people around him picked up the corruption from him. You are right: a new broom sweeps clean. Best, Don Bauder

Feb. 9, 2015

What's that out on the clothes line? Why it's Michael Peeve hung out to dry.

Feb. 9, 2015

MichaelValentine: Would you want such smelly laundry hanging next to your yard? Best, Don Bauder

Feb. 9, 2015

Part of the reason that Peevey could get away with his corrupt acts can actually be linked to the events of 9/11, when the FBI devoted most of its resources towards fighting terrorism.

I could never understand how Peevey could behave so corruptly for so many years, until I thought about the Formal Complaint I filed against AT&T back in July 2001.

My Formal Complaint was going well prior to the time that Peevey showed up.

The CPUC Judge had scheduled three days of cross-examination. I had photographed AT&T internal documents which proved AT&T was knowingly using defective phone lines in my neighborhood, as well as at my premises. It would have been a simple matter to ask AT&T why they were using defective phone lines to my premises, to prove that AT&T was violating public utility laws each and every day since 1996.

After Peevey showed up, the Judge called me, to tell me that there would be no cross-examination, and that the Formal Complaint would all be done in writing. When I asked the Judge why, she told me it was not her Decision.

Needless to say, the CPUC ignored the evidence I provided, and Ruled in favor of AT&T.

When I went to the FBI, the FBI told me it had limited resources. It wasn't until after the San Bruno fire that the FBI contacted me, to ask about the corruption at the CPUC.

I do believe Peevey, and others, will go to prison. It is just a matter of time.

I am thankful for the work of Mr. Aguirre, Ms. Severson, the City of San Bruno, and of course, Don Bauder for making Peevey's corrupt behavior, more public.

Please see my website for photographs of the AT&T documents. www.APhoneNumberForThePresident.com

Feb. 9, 2015

mikeknell: I am not surprised by your story. It's so typical of the way the CPUC has operated since Gray Davis put Peevey in a dozen years ago. I kept hearing about the corruption, but couldn't pin it down. Now it has been broken wide open. Best, Don Bauder

Feb. 9, 2015

Don, I have been trying to understand the corruption at the CPUC for the last twelve years.

For some reason, I could not comprehend that the Commissioners themselves were the reason for the corruption. Perhaps it was because the Commissioners were only appointed to work for 6-years per term, and there were many CPUC employees who had worked there for ten or more years.

I initially believed it was the long-time employees who were corrupt, and that they could hide the corruption from the unknowing Commissioners. Now, because of the emails, I know better. The question I now have is, Who Appointed these corrupt officials?

Feb. 9, 2015

I'm not defending Peevey, but Aguirre may have well written this article himself. I see no attempt to reach Peevey or the utilities or the commissions for comment. Mr. Bauder, you're smarter than this. Please do more than just reword what Aguirre tells you and add your own memories of Aguirre moments. I'd also suggest to the Reader's editors that they assign different reporters to cover this story. There's too much back-scratching between reporter and source here, and it's been going on for years. It's not necessarily impropriety, but the appearance of impropriety.

Feb. 9, 2015

I have been waiting for over twelve years, for Peevey's corrupt behavior to be exposed.

From my point of view, Mr. Bauder has been one of the few reporters to consistently report the behavior of Peevey.

Is Mr. Aguirre getting too much exposure by Bauder? Not from my point of view.

Watch the video of Mr. Aguirre talk in front of the Commissioners, explaining how Peevey writes the checks for the intervener fees, and why the so-called consumer groups, who bow down to Peevey, get paid by Mr. Peevey.

From the video, it easy to understand why TURN was such a spineless critic of the CPUC, especially since Commissioner Florio (who previously worked at TURN), believes he can now behave like Peevey.

Feb. 9, 2015

mikeknell: TURN has played ball shamelessly with Peeve's CPUC and piled up a lot in intervenor fees for doing so. Now TURN has been exposed, as UCAN was earlier. Best, Don Bauder

Feb. 9, 2015

petezanko. Peevey has never answered any of my attempts to reach him at the CPUC. The CPUC itself does not answer my queries or requests for information. I gave up going to them some time ago.

Back-scratching? This is a helluva story and other media are picking it up. I hardly have a monopoly on Aguirre's information, and never have. I do admire somebody who takes on the establishment. Best, Don Bauder

Feb. 9, 2015

Then again, considering what a thin-skinned bully Aguirre is, as evidenced by his suing the other, lesser paper in town for hurting his feelings, maybe Bauder's just afraid of a guy who couldn't break 10 percent in the mayoral race...

Uh-oh, I think I just got myself sued...

Feb. 9, 2015

petezanko: There was a reason Aguirre sued City Beat. You should be able to figure it out. Remember, the suit was dropped quickly. Best, Don Bauder

Feb. 9, 2015

The Onion-Tribune has a good take on this story... "The meeting took place in March 2013 in Warsaw at the luxury Bristol Hotel, where Peevey and former Edison executive Stephen Pickett talked for about 30 minutes about ways to resolve shutdown issues."

Their coverage, with two photos of the luxury hotel, may leave the casual reader with only a vague memory of some James Bond type intrigue, and little awareness of the cost of this adventure for local ratepayers.

I'm reminded of the outrageous ripoff, years ago, perpetuated against us by Enron and other conspirators. When will Californians stand up and scream "I'm mad as hell and I'm not going to take it any more!"

Feb. 9, 2015

swell: Yes, I understand the U-T story is quite good. I looked for it on the web and could only find a wire service story that was pretty bad -- missed the point completely. I don't think the writer understood the gravity of what Edison was confessing. I am looking forward to seeing Jeff McDonald's story tomorrow (Tuesday). Best, Don Bauder

Feb. 9, 2015

swell: I read Jeff McDonald's story today (Tuesday) and tip my hat to him. It is an excellent piece of journalism. Best, Don Bauder

Feb. 10, 2015

I would bet there were plenty of dinners out where policy ( officialdom's term for screwing the public) was discussed and decided upon.

Once the little worm Peevey starts to name name to save his scrawny butt, a lot of big shots will go down ( or so we can hope)

Feb. 10, 2015

Murphyjunk? Scrawny butt? He has consumed too many steaks and too much wine at utilities' expense to have any scrawny parts in his frame.

You make an excellent point: what about other meals and hush-hush meetings he has had? We already know about secret meetings he had with PG&E when he and his minions were trying to get the utility off easy on financial punishment for the San Bruno explosion. Best, Don Bauder

Feb. 10, 2015

could it be the difference between a dinner meeting and "secret" meeting is the latter involves booze and hookers ?

Feb. 10, 2015

Murphyjunk: I have never heard a word about hookers. So let's not raise the point. The lavish overseas junkets at the expense of the utilities, and the sumptuous dinners accompanied by lots of wine are enough. Best, Do Bauder

Feb. 10, 2015

"I have never heard a word about hookers" thats the secret part ( for now)

Feb. 11, 2015

Helen Rowe Allen: I have been writing for the Reader for almost a dozen years. If you want to go back and read some past columns and blog items, they are right here. Just go to the bottom of the page to find past articles. Many thanks. Best, Don Bauder

Feb. 10, 2015

Barbara Stevens: Credit for that art should go to the Reader's Robert Mizrachi. Best, Don Bauder

Feb. 10, 2015

Thank you Don, for a great article as usual. For readers that get this far, they can find out about the rally in SF on Thursday here: http://www.copswiki.org/Common/ProsecutePeeveyRally

Feb. 10, 2015

raylutz: A big turnout is important -- otherwise officialdom will think that there is only a small group of people watching Peevey's misdeeds closely. Best, Don Bauder

Feb. 10, 2015

Poland?

That's a long way to go from CA to have a meeting.

Weren't some of the CIA black sites in Poland? Perhaps Poland has laws which make it easier to keep secrets. Or am I making connections that aren't there?

Feb. 11, 2015

The UT carries an editorial in the 2-11-15 condemning Peevey. So the "problem" is not Don Bauder "following" Michael Aguirre.

"Peevey's arrogance and sense of infallibility led him to conclude that rules were for other people."

This is Don Bauder' s fault?

It is one thing to raise rates on consumers but inexcusable to endanger public safety at San Bruno and SONGS. I believe that only full discovery of all documents followed by examination under oath can expose the truth. I told this to PUC at a public comment session at Costa Mesa regarding the unfair settlement st SONGS. The PUC wanted to avoid hearings on the issue of whether Souhern California Edison acted prudently in the operation of SONGS. For one thing, this culture of placing profits over safety endangered 8.5 million residents who cannot flee a meltdown.

I am of the opinion that attorneys are prohibited from meeting ex parte with "decision-makers" by Rule 5-300(c) Rules of Profesdional Conduct unless the conduct is in writing and served on all other parties. Rule 5-300 (c) defines "decision -maker." Cal. 1984-82 and Cal. 1977-43 are ethics opinions that extend these rules to administrative hearings.

The PUC procedures are inadequate to protect the public. As stated by the UT editorial, "Who knows what - if anything - relevant to the shutdown that Peevey might have said to then-Edison lawyer Stephen Pickett in their 30-minute meeting that March at Warsaw's Bristol Hotel.

Utilities will recover 70 percent of the 4.7 billion cost of San Onofre's shutdown from ratepapers. Peevey did not directly benefit from that settlement that we know of pending further investigation.

Attorneys must avoid ex parte contacts with decision-makers unless the contact is in writing with a copy to all other parties. Peevey has no power to absolve ethical lapses by lawyers. The Supreme Court of California and the State Bar decide these matters, not the PUC.

I know that ex parte contacts in Environmental Law is the hot topic in seminars. This is a classical example of why attorneys have this prohibition. Such contacts should be avoided by attorneys. Judges do not allow these contacts without the express permission of all parties. Such contacts undermine the integrity of the administrative process.

Feb. 11, 2015

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