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Loretta Lynch, former president of P.U.C., says it is a “corrupt, co-opted agency

State utility regulator re-examines secret meetings

San Onofre
San Onofre
San Bruno gas pipeline explosion

By now, savvy folks know that the California Public Utilities Commission has to clean up its act — thoroughly. Commissioners and staff members used illegal, back-channel communications with Southern California Edison to fleece ratepayers over costs of closing the San Onofre nuclear plant. Similarly, commission members were secretly helping Pacific Gas and Electric in its attempt to get a light penalty for its negligence leading to the 2010 San Bruno gas pipeline explosion that killed eight people and incinerated a neighborhood.

But the commission is not giving itself a thorough bath. It’s taking a cowboy bath at best.

Example: at the same time that the utility regulator was not turning over documents requested in a search warrant from the state’s attorney general, it was gathering legal opinions on how it could restore public confidence. Hmmm...

Strumwasser report

The utilities commission paid the law firm of Strumwasser & Woocher to make recommendations on the ex parte (one-sided) meetings between regulatory officials and utilities that led to the anticonsumer actions over San Onofre and San Bruno. It also had a staff lawyer, Ed O’Neill, prepare a report on both the secrecy and necessity of bringing efficiency to the decision-making process. O’Neill, who had worked for the commission before representing energy and telecom firms, was hired to “modernize” the commission’s decision-making process.

This “modernizing” involved suggested changes in the California Bagley-Keene Open Meeting Act, even though the original purpose of that act was to sacrifice efficiency in favor of the public’s knowledge of and participation in commission decisions.

Generally speaking, the Strumwasser recommendations are considered sound. The report said that in cases involving rate-setting, current ex parte practices “systematically favor the interest of utilities and other well-funded parties.” (Given the San Onofre and San Bruno slime, the report could hardly have said anything else.) The report recommended that substantive ex parte communications in cases involving the setting of rates should be prohibited.

Bill Powers

“Strumwasser wrote a good report,” says Bill Powers of San Diego’s Powers Engineering. “It shows how the formal decision-making process is corrupted by the free-wheeling heavy hitters, the utilities. The system is stacked against the little guy, and the only defense for the little guy is sunlight” — openness, transparency.

Says Mindy Spatt of the Utility Reform Network of San Francisco, “The commission has been mired in scandal and corruption because these backdoor meetings have been allowed. It is time to shut the door,” and the Strumwasser report should be helpful in accomplishing that. Her group is in favor of banning ex parte huddles in any matter involving rate-setting.

Bagley-Keene Open Meeting Act softened

But then there is the report by O’Neill. On June 22 in Sacramento, Timothy Sullivan, the new executive director of the commission, held a workshop for those with an interest in commission procedures and decisions. O’Neill was a speaker. “The Bagley-Keene Act discourages deliberation,” said Sullivan, summing up O’Neill’s points. The act’s provisions “hinder decision-making and deliberation.… [They] have stifled any deliberation.” Sullivan admitted that “lack of trust is a major problem” for the commission, but Bagley-Keene won’t restore that trust, O’Neill insists. Sullivan called for “a workable balance between openness and transparency, on the one hand, and the need for effective and efficient regulatory proceedings, on the other hand.”

Balderdash. One critic says O’Neill is looking for ways to “get around having independent [administrative law] judges and ex parte rules” so that rates can be jacked up “without public and expert scrutiny.” (For example, after the San Onofre closing, former commission president Michael Peevey managed to shut down a required study by an expert, then blindfolded and fleeced the public in his ex parte meeting in Poland with an Edison executive. Peevey is under criminal investigation.)

O’Neill would eliminate the role of independent administrative law judges except in minor cases. Thus, commissioners could “meet with utilities, including Edison, Sempra, and [Pacific Gas and Electric] unfettered by any ex parte rules, make deals, have discussions in closed-door meetings,” and plot to rape ratepayers, says this critic. O’Neill would have the chief administrative law judge serve at the pleasure of the commission — a blatant conflict of interest.

Joseph Como, acting director of the Office of Ratepayer Advocates within the commission, says, “Commissioners don’t have a compelling reason, as fact gatherers or decision-makers, to entertain ex parte meetings.… [T]here are better tools than ex parte meetings” — for example, consulting with the 800-person staff, which is often isolated from commissioners, and with administrative law judges, “the first line of knowledge.”

Utilities Commision “Corrupt, co-opted”

Loretta Lynch

Loretta Lynch, former president of the commission, says the regulatory body now is a “corrupt, co-opted agency that makes decisions behind closed doors.” It “does what it wants” no matter what administrative law judges say. For example, the commission is spending more than $5 million on attorneys to represent the commission in state and federal investigations. But an indictment of a state agency is out of the question. Thus, she asks, “Is the [commission] trying to help Peevey by hiring criminal defense lawyers? Are they impeding the investigations?”

Lynch says the O’Neill and Strumwasser studies are “not bad,” except to the extent they are repetitive. “All these attempts at reform…might be a good start, but they are certainly not a finish until commissioners read the law, follow the law, and do not break the law.”

Edison controls SoCal regulators

Mike Aguirre

The so-called reform attempts “don’t attack the core problem, which is utilities providing funding to the decision makers — free trips, dinners, contributions, employment opportunities down the road,” says Mike Aguirre, San Diego attorney who is fighting the predations of Edison and the commission. He says that O’Neill calls the use of the defective parts at San Onofre an accident that can’t be blamed on anyone. “The steam generators failed in a year. They were supposed to last 40 years. Nobody’s fault?” The report is “pabulum and tranquilizers.”

The Southern California legislators “that Edison controls” will block any meaningful reform legislation, says Aguirre. “Ex parte is not the problem. It is a symptom of the problem. There will be backroom deals unless we have strict enforcement of open meeting laws.”

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Will San Diego survive a fall without classical music?

Just as symphony, Mainly Mozart, La Jolla Music Society were getting stronger
San Onofre
San Onofre
San Bruno gas pipeline explosion

By now, savvy folks know that the California Public Utilities Commission has to clean up its act — thoroughly. Commissioners and staff members used illegal, back-channel communications with Southern California Edison to fleece ratepayers over costs of closing the San Onofre nuclear plant. Similarly, commission members were secretly helping Pacific Gas and Electric in its attempt to get a light penalty for its negligence leading to the 2010 San Bruno gas pipeline explosion that killed eight people and incinerated a neighborhood.

But the commission is not giving itself a thorough bath. It’s taking a cowboy bath at best.

Example: at the same time that the utility regulator was not turning over documents requested in a search warrant from the state’s attorney general, it was gathering legal opinions on how it could restore public confidence. Hmmm...

Strumwasser report

The utilities commission paid the law firm of Strumwasser & Woocher to make recommendations on the ex parte (one-sided) meetings between regulatory officials and utilities that led to the anticonsumer actions over San Onofre and San Bruno. It also had a staff lawyer, Ed O’Neill, prepare a report on both the secrecy and necessity of bringing efficiency to the decision-making process. O’Neill, who had worked for the commission before representing energy and telecom firms, was hired to “modernize” the commission’s decision-making process.

This “modernizing” involved suggested changes in the California Bagley-Keene Open Meeting Act, even though the original purpose of that act was to sacrifice efficiency in favor of the public’s knowledge of and participation in commission decisions.

Generally speaking, the Strumwasser recommendations are considered sound. The report said that in cases involving rate-setting, current ex parte practices “systematically favor the interest of utilities and other well-funded parties.” (Given the San Onofre and San Bruno slime, the report could hardly have said anything else.) The report recommended that substantive ex parte communications in cases involving the setting of rates should be prohibited.

Bill Powers

“Strumwasser wrote a good report,” says Bill Powers of San Diego’s Powers Engineering. “It shows how the formal decision-making process is corrupted by the free-wheeling heavy hitters, the utilities. The system is stacked against the little guy, and the only defense for the little guy is sunlight” — openness, transparency.

Says Mindy Spatt of the Utility Reform Network of San Francisco, “The commission has been mired in scandal and corruption because these backdoor meetings have been allowed. It is time to shut the door,” and the Strumwasser report should be helpful in accomplishing that. Her group is in favor of banning ex parte huddles in any matter involving rate-setting.

Bagley-Keene Open Meeting Act softened

But then there is the report by O’Neill. On June 22 in Sacramento, Timothy Sullivan, the new executive director of the commission, held a workshop for those with an interest in commission procedures and decisions. O’Neill was a speaker. “The Bagley-Keene Act discourages deliberation,” said Sullivan, summing up O’Neill’s points. The act’s provisions “hinder decision-making and deliberation.… [They] have stifled any deliberation.” Sullivan admitted that “lack of trust is a major problem” for the commission, but Bagley-Keene won’t restore that trust, O’Neill insists. Sullivan called for “a workable balance between openness and transparency, on the one hand, and the need for effective and efficient regulatory proceedings, on the other hand.”

Balderdash. One critic says O’Neill is looking for ways to “get around having independent [administrative law] judges and ex parte rules” so that rates can be jacked up “without public and expert scrutiny.” (For example, after the San Onofre closing, former commission president Michael Peevey managed to shut down a required study by an expert, then blindfolded and fleeced the public in his ex parte meeting in Poland with an Edison executive. Peevey is under criminal investigation.)

O’Neill would eliminate the role of independent administrative law judges except in minor cases. Thus, commissioners could “meet with utilities, including Edison, Sempra, and [Pacific Gas and Electric] unfettered by any ex parte rules, make deals, have discussions in closed-door meetings,” and plot to rape ratepayers, says this critic. O’Neill would have the chief administrative law judge serve at the pleasure of the commission — a blatant conflict of interest.

Joseph Como, acting director of the Office of Ratepayer Advocates within the commission, says, “Commissioners don’t have a compelling reason, as fact gatherers or decision-makers, to entertain ex parte meetings.… [T]here are better tools than ex parte meetings” — for example, consulting with the 800-person staff, which is often isolated from commissioners, and with administrative law judges, “the first line of knowledge.”

Utilities Commision “Corrupt, co-opted”

Loretta Lynch

Loretta Lynch, former president of the commission, says the regulatory body now is a “corrupt, co-opted agency that makes decisions behind closed doors.” It “does what it wants” no matter what administrative law judges say. For example, the commission is spending more than $5 million on attorneys to represent the commission in state and federal investigations. But an indictment of a state agency is out of the question. Thus, she asks, “Is the [commission] trying to help Peevey by hiring criminal defense lawyers? Are they impeding the investigations?”

Lynch says the O’Neill and Strumwasser studies are “not bad,” except to the extent they are repetitive. “All these attempts at reform…might be a good start, but they are certainly not a finish until commissioners read the law, follow the law, and do not break the law.”

Edison controls SoCal regulators

Mike Aguirre

The so-called reform attempts “don’t attack the core problem, which is utilities providing funding to the decision makers — free trips, dinners, contributions, employment opportunities down the road,” says Mike Aguirre, San Diego attorney who is fighting the predations of Edison and the commission. He says that O’Neill calls the use of the defective parts at San Onofre an accident that can’t be blamed on anyone. “The steam generators failed in a year. They were supposed to last 40 years. Nobody’s fault?” The report is “pabulum and tranquilizers.”

The Southern California legislators “that Edison controls” will block any meaningful reform legislation, says Aguirre. “Ex parte is not the problem. It is a symptom of the problem. There will be backroom deals unless we have strict enforcement of open meeting laws.”

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Comments
32

secret meetings that the public is aware of that is.

who can trust these scum bags any longer ?

Sept. 30, 2015

Murphyjunk: The CPUC is not to be trusted until there is a wholesale housecleaning. And that may never come. Best, Don Bauder

Sept. 30, 2015

Are you telling us that there is NO WAY to bring the individual knaves, charlatans, crooks, and thieves to account for their crimes and torts?

Sept. 30, 2015

too bad someone does not spot them out in public and give them some street justice.

Sept. 30, 2015

Murphyjunk: Street justice is exactly what we don't need. It would be counterproductive. Best, Don Bauder

Oct. 1, 2015

Yes, Don, you are right. But what MJ says WILL happen once the hoi polloi has no alternative, and even on a smaller scale given the psychology of nutcases out there.

Oct. 1, 2015

Twister: This is the danger: all-out revolution. We came close during the riots of the 1960s. What if CEOs are no longer safe in their offices or homes? That day could come. Those who could stop the day from coming are the CEOs themselves and the boards of directors that set CEO pay. But they haven't learned yet. Best, Don Bauder

Oct. 2, 2015

i wouldn't hesitate to tell them what I think if them if I were to see them out in public.

Oct. 4, 2015

Twister: Oh, there is a way. But as long as the big utilities keep feeding money to our politicians, the decision-makers are not going to travel that way. Nor will the courts touch this corruption unless the public really gets heated up, forcing the media to cover the regulatory thievery even better. Best, Don Bauder

Oct. 1, 2015

You have just validated my take of the injustice system. And "the public." And the media. It used to be the latter's job to heat up the former, and expose the privileged.

Oct. 1, 2015

Twister: So you remember. A newspaper's mission was to comfort the afflicted and afflict the comfortable. That is no longer true. Best, Don Bauder

Oct. 2, 2015

Twister: The three stockholder-owned utilities -- Edison, Sempra, and PG&E -- pass so much money to politicians that reform is extremely difficult, if not impossible. Also, right now, a person can't sue the CPUC in superior court; the matter has to go straight to the appellate panel which may not take the case.

The CPUC and the three investor-owned utilities are thoroughly corrupt and there is some doubt that they can be reformed.

Money talks. Why must it nauseate? Best, Don Bauder

Oct. 2, 2015

SCE Caused A Nuclear Near-Miss At San Onofre and the CPUC is not only letting them away with it by shutting down its state mandated INVESTIGATION before it even gets started but is trying its best to make ratepayers foot the multi-billion dollar bill, instead of the shareholders of SCE (and SDG&E who is also a 20% owner)!

The San Onofre Replacement Steam Generator (RSG) Project was designed by a team of both MHI and SCE engineers with SCE having the final say and it was their licensed CA Engineers that put their "chop" on them, which means that SCE "designed" them, the rest is finger pointing. In fact SCE told MHI that everything about the project was to be approved by them first and that HMI was not to talk to anybody including the NRC without getting the OK from SCE.

This was done in order to get the RSG's built quickly without a full NRC 50.90 review which would have included a public review process.. By using the NRC 50.59 process (aka Like-For-Like) SCE told the NRC and everyone else that it was going to be an identical exchange, so no technical reviews were required. We now know this was false and can even point out a nuclear industry trade article where SCE's engineer and a MHI engineer bragged about all the changes they made, anyone of which should have required a full 50.90 review. NRC Region IV that OK'd this 50.59 replacement got all kinds of egg on their face and it pointed out that their NRC inspectors were too cozy with SCE, since the RSG failed soon after being installed, thanks to both their faulty unproven design and also how they were being operated by SCE!

Improving like-for-like RSGs

https://s3.amazonaws.com/s3.documentcloud.org/documents/347889/col-nrc-tech-paper.pdf

Oct. 1, 2015

Con't. 2 The operation of these RSG's outside their NRC approved specifications will be THE KEY issue that will convince everyone that their failure is completely SCE fault (since ratepayers had nothing to do with their operation) and everyone knows what operating "over the red line means"!

Another reason why SCE must turn over their operational records is that the data will prove that SCE's operators were "experimenting" by adjusting the operational parameters in an attempt to figure out how to get the RSG to work without them causing internal "noises". In fact the 9,747 steam generator tubes tightly packed inside each of the RSG were striking each other and/or their supports as the tubes vibrated, causing "tube wear". This was very dangerous because if one or more tubes failed the high pressure radioactive reactor core coolant inside them would "flash" to steam and escape into the atmosphere! The NRC still assumes that not more than a single tube can fail at a time, which San Onofre proved is an invalid assumption since after the entire RSG system was shut down, a number of tubes failed in situ (in-place) testing. Until the "root cause" of San Onofre is determined other US steam generator may also be at risk, since a "cascade" of tube failures could easily vent so much of the reactor coolant, so fast from the reactor core, that it could cause a meltdown of the reactor!

Having followed this closely since 01/31/12, I can say that we were very, very lucky to not have had a nuclear incident and/or even a nuclear accident at San Onofre despite all the "feel good" talk from SCE. If the "leak" had occurred during a large earthquake along with some other things, while both Unit 2 and Unit 3 were online, we could have had a SoCal Fukushima, which would have easily exceeded the Trillion Dollar Eco-Disaster Japan is now dealing with!

For much more see: #SanOnofreGate — The new hashtag that will allow you to keep up to date on the ongoing investigation into the multi-billion $ SCE-CPUC ripoff.

Parts of the above were previously posted: http://m.sandiegoreader.com/news/2015/aug/06/ticker-judge-spanks-edison/#c190175

Oct. 1, 2015

CaptD: And the fact that we came close to a nuclear accident should scare the wits out of those living near San Onofre. The seriousness of this situation was deliberately concealed by the CPUC and Edison. An investigation was required by law but the CPUC and Edison, in collusion, avoided those laws. Up to now, they have gotten away with it. Best, Don Bauder

Oct. 2, 2015

The effects of a nuclear accident will affect far more than those living close.

Oct. 2, 2015

Twister: True. Read up on Fukushima Daiichi. Best, Don Bauder

Oct. 2, 2015

CaptD: Correct. The closing of San Onofre was completely, 100 percent the fault of management. Ratepayers should be picking up none of the tab.

The same is true of the 2007 fires and SDG&E. The utility is to blame. The ratepayers are not. The cost should be 100 percent borne by shareholders. Best, Don Bauder

Oct. 1, 2015

Don - RE: "pabulum and tranquilizers" I feel that statement is far too kind since the Utilities stand to save multi-billions of dollars because the CPUC is making it far too easy for SCE to get away with GRAND THEFT, since they not the ratepayers designed the defective RSGs that failed almost as soon as they were installed (less than 2 years for Unit 2 and less than 1 year for Unit 3 (because SCE operated Unit 3 RSGs "over their NRC approved redline" in the hopes of maximizing their thermal output and PROFITS.

The almost-new SanO RSG’s had more damaged and/or plugged tubes than the rest of the US power plants combined, which is unprecedented in the history of the U.S. Operating Nuclear Fleet. http://sanonofresafety.files.wordpress.com/2011/11/steamgeneratortubesplugged1.pdf Credit: SanOnofreSafety.org

Q. If you pay a professional driving service to maintain and drive your vehicle, who is to blame if they put an engine in your vehicle and it fails or they have an accident? A. You or them? Hint: SCE and the CPUC thinks it should be you.

Oct. 1, 2015

CaptD: Correct: Edison and Sempra shareholders should pay 100 percent of the costs of the shuttering of San Onofre. SDG&E/Sempra should pay 100 percent of the uninsured costs of the 2007 fires. Best, Don Bauder

Oct. 1, 2015

" Don Bauder Oct. 1, 2015 @ 7:52 p.m.

CaptD: Correct. The closing of San Onofre was completely, 100 percent the fault of management. Ratepayers should be picking up none of the tab.

The same is true of the 2007 fires and SDG&E. The utility is to blame. The ratepayers are not. The cost should be 100 percent borne by shareholders. Best, Don Bauder"

Well, yes, I think they should, especially in the first case.

HOWEVER, given that someone living in a historically hazardous area my not only fail to keep himself "fire-safe," and the leaders consistently repeat the same errors of misallocation and stubborn refusal to approach the issue intelligently, even scientifically, no starter of fires in a fire-prone region is wholly guilty.

Tw

Oct. 1, 2015

Twister: So if the utility is not 100 percent guilty, what percentage would you assign it? Best, Don Bauder

Oct. 2, 2015

I would be delighted to find the utility 100 percent guilty.

I would not hit some teenager with the same penalty. Or even some frightened, inept hunter.

But if you persist in failing to do what is necessary AND FEASIBLE to protect yourself from an inevitable fire, should some poor dolt who did something stupid 20 miles away be fully responsible for your loss?

Oct. 2, 2015

Twister: Your point is a good one. People who build or buy homes in the middle of the forest are knowingly taking on fire risk. Ditto for those at the peak of a hill surrounded by forest. Best, Don Bauder

Oct. 2, 2015

Ray Lutz: Rendon was talking a good game, but not acting one, even before he got into the running for speaker. I agree: meaningful reform is probably not possible in the immediate future. San Bruno and San Onofre have awakened the public to the corruption, but it may take more.

Incidentally, keep doing a good job in putting the pressure on. Best, Don Bauder

Oct. 2, 2015

Joe Holtzman: Both you and Ray Lutz would like to see the investor-owned utilities broken up into municipal utilities. However, a ganglion of complications would frustrate the achievement of that. Best, Don Bauder

Oct. 2, 2015

Too bad Lutz is on Facebook. I won't sign up for Facebook.

Tw

Oct. 2, 2015

Twister: You won't sign up for Facebook. I am not smart enough to figure it out. I depend on my wife to tell me when things of familial importance show up on Facebook. Best, Don Bauder

Oct. 2, 2015

Don — After spending hundreds of millions of dollars (all funded by SoCal ratepayers) in hiring Engineering Consultants from around the world and performing 170,000 tube inspections, SCE was still unable to convince the NRC Office of Nuclear Reactor Regulations, the NRC AIT Inspectors, the NRC Atomic Safety Licensing Board and many in the public of their technical adequacy, not to mention incorrect conclusions of both the SCE Unit 3 Tube Leak Root Cause Evaluation and the Unit 2 Restart Service Report. In plane english, they were told that their engineering reports were just junk and they better provide some answers to the NRC that made sense. Things were so bad that the NRC also "took their keys away" when they told SCE, don't even think about restarting your Unit 2 reactor without getting specific permission from us.

Not wanting to get stuck with being found responsible for their own multi-billion dollar faulty designed San Onofre replacement steam generator project and their operational debacle, SCE had to come up with a quick solution. That solution was provide by the CPUC Chairman Michael Peevey, who agreed to a one sided secret SCE San Onofre "Settlement," whose details were all in SCE favor. With their "get out of jail card free" in their pocket, it was just a matter of some PR "smoke and mirrors" for SCE to use their pre-planned exit strategy to publicly announce the retirement and decommissioning of both San Onofre Unit 2 & Unit 3.

Behind the "smoke and mirrors" and unknown by most observers was that they did this for four very important reasons:

1) Hide all their design mistakes for both Unit 2 and Unit 3 that resulted in "unprecedented" tube damage in the almost new replacement steam generators.

2) Hide their experimental operation of Unit 3 "over its redline" which resulted in what is known as in plane fluid elastic instability (that caused the Unit 3 radioactive leak in the first place) and had never before occurred anywhere in the world, in an operational reactor steam generator. Said another way, SCE destroyed their own new toy...

3) Hopefully stop both the California mandated CPUC investigation as well as several NRC Investigations into SCE's wrongdoing.

4) Gain immediate access to the multi-Billion dollar San Onofre decommissioning fund, which will provide an income stream for decades to come.

SCE was feeling pretty smug about this "deal" since many inside both the CPUC and the NRC were also directly involved in what I call #SanOnofreGate *.

===> Now what SCE fears the most is about to happen, despite their best efforts, the truth is going to come out and it will come out very soon. Stayed Tuned!

  • *The new hashtag that will allow you to keep up to date on the ongoing investigation into the multi-billion $ SCE-CPUC ripoff.
Oct. 3, 2015

Donna Gilmore: I will have to check out that Anaheim experience. It might make a good master's thesis for someone. Best, Don Bauder

Oct. 4, 2015

Richard Martin: A couple of decades ago, the idea of an investor-owned utility going nonprofit would have been heresy. But utilities have become so greedy that it is no longer considered radical. Best, Don Bauder

Oct. 4, 2015

I suspect that a Master's would be a demotion for CaptD, who seems to have it nailed. I honestly don't know what a hashtag is.

Martin also has it nailed. As long as there is a cap on expenditures for propaganda and "executives." And other ways of money-laundering. They don't call them No Good Organizations for nothin'.

More good reasons for looking into the Mondragon concept.

Tw

Oct. 5, 2015

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