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More stench from California's utilities commission

If state regulator worked with Wall Street, they worked against the public

Michael Picker and Michael Peevey
Michael Picker and Michael Peevey

San Diego attorneys Mike Aguirre and Maria Severson have put together a slide show that reveals how the California Public Utilities Commission courted Wall Street during the 12-year reign of commission president Michael Peevey, a former president of Southern California Edison who is now under criminal investigation.

It is important to know that the commission has no mandate to schmooze Wall Street.

"Its job is to determine if rates are reasonable," says Aguirre.

But I have observed through the years that when a big possible liability arises at one of California's investor-owned utilities — Sempra, Edison International, and Pacific Gas & Electric — the stock does not go down, and Wall Street securities analysts assure potential investors that California enjoys "constructive regulation," which is a euphemism for "pro-utility regulation."

Email evidence that commission president Peevey fostered a relationship with Wall Street

Working with emails provided to them, Aguirre and Severson noted how commissioners visited Wall Street to pitch analysts on how utility-friendly California regulation was at that time. Early on, the slide show reveals an email in which Peevey tells Gavin H. Wolfe, a managing director of investment banking at Bank of America/Merrill Lynch, that the then-newest commissioner, Michael Picker (now the president), was coming to Wall Street in 2014. Peevey asks Wolfe to set up Picker with luncheons and meetings with other Wall Street honchos.

Peevey says he wants Picker to learn Wall Street's views of California regulation. That is misleading. Subsequent slides suggest that Picker will be telling the Wall Street analysts how utility-friendly the CPUC is. The emails indicate that Picker met with dozens of securities analysts from brokerage houses, as well as analysts from hedge funds.

Aguirre suspects that during his 2014 trip, Picker told analysts that the commission decision forcing ratepayers to pick up the tab for 70 percent of the cost of the San Onofre decommissioning would not be reversed.

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Michael Picker and Michael Peevey
Michael Picker and Michael Peevey

San Diego attorneys Mike Aguirre and Maria Severson have put together a slide show that reveals how the California Public Utilities Commission courted Wall Street during the 12-year reign of commission president Michael Peevey, a former president of Southern California Edison who is now under criminal investigation.

It is important to know that the commission has no mandate to schmooze Wall Street.

"Its job is to determine if rates are reasonable," says Aguirre.

But I have observed through the years that when a big possible liability arises at one of California's investor-owned utilities — Sempra, Edison International, and Pacific Gas & Electric — the stock does not go down, and Wall Street securities analysts assure potential investors that California enjoys "constructive regulation," which is a euphemism for "pro-utility regulation."

Email evidence that commission president Peevey fostered a relationship with Wall Street

Working with emails provided to them, Aguirre and Severson noted how commissioners visited Wall Street to pitch analysts on how utility-friendly California regulation was at that time. Early on, the slide show reveals an email in which Peevey tells Gavin H. Wolfe, a managing director of investment banking at Bank of America/Merrill Lynch, that the then-newest commissioner, Michael Picker (now the president), was coming to Wall Street in 2014. Peevey asks Wolfe to set up Picker with luncheons and meetings with other Wall Street honchos.

Peevey says he wants Picker to learn Wall Street's views of California regulation. That is misleading. Subsequent slides suggest that Picker will be telling the Wall Street analysts how utility-friendly the CPUC is. The emails indicate that Picker met with dozens of securities analysts from brokerage houses, as well as analysts from hedge funds.

Aguirre suspects that during his 2014 trip, Picker told analysts that the commission decision forcing ratepayers to pick up the tab for 70 percent of the cost of the San Onofre decommissioning would not be reversed.

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Comments
32

No surprise that Gov. Brown has stacked the deck against ratepayers again with Picker, since he has been doing the same thing with Peevey for a very long time.

Back room deals with Wall Street have only cost CA ratepayers more, which is why we have some of the highest priced energy despite having some of, it not the best weather in the US.

These back room revelations are kept quiet because these Utilities own the Media (not counting the SD Reader) and they control most of the public debate about what is (and is not) discussed in America.

The SD Reader will become ever more important as all the local newspapers choose to report less about Big Corp.'s and those that own them.

Imagine how much more information we would have about #SanOnofreGate ** if local Media was able to report on it without worrying about SCE and SDG&E influence on them and our local elected Officials.

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

None

Feb. 25, 2016

CaptD: I appreciate your report, as I appreciate all your contributions to this blog. However, I must stand up for the Union-Tribune on this one. It has done an extremely good job covering the San Onofre rape of the ratepayer, and how it was engineered by Peevey and his former colleagues at Edison. I hope its excellent coverage continues now that it is owned by the parent of the Los Angeles Times. Best, Don Bauder

Feb. 25, 2016

Don — I know several of the UT reporters have tried to do even more but they have had trouble getting permission from management.

I hope you are right and now the UT will become a louder voice for ratepayer fairness.

I hope they and KPBS will also cover this story.

Feb. 25, 2016

The Koch Promotion Broadcasting System? Not likely.

I want to add my thanks for your substantive contributions, particularly on this subject. Virtue may be its own reward, but I'd buy you a drink if I could. I'll raise one (non-alcoholic) in your honor anyway.

Feb. 25, 2016

Flapper: The Koch Promotion Broadcasting System. Yes, an apt moniker. Best, Don Bauder

Feb. 26, 2016

CaptD: I certainly hope the U-T's excellent coverage of the rape of the ratepayer continues. Best, Don Bauder

Feb. 26, 2016

Sridhar Iyer 1: Remember that Peevey knows all about politics. Until he became an executive vice president at Edison, and ultimately president, he was a company lobbyist. The fact that this company would choose a president from among its lobbyists tells you all you need to know about Edison. Peevey's wife is a politician. Best, Don Bauder

Feb. 25, 2016

That disgusting slime has a wife? She's either to be pitied or rescued or both--or maybe stoned?

Feb. 25, 2016

Flapper: Peevey's wife, Carol Liu, is in the state senate. Best, Don Bauder

Feb. 26, 2016

Sridhar Iyer 2.: As president of the CPUC, Peevey acted like a dictator. He was not only running the CPUC (making illegal moves), but he was attempting to run the utilities, particularly Edison, by giving them advice on public relations, personnel relations (whom to promote) and the like. Best, Don Bauder

Feb. 25, 2016

Obviously, social mores have no effect on asocial creeps. As much as I detest laws, I suppose we need more of them, aimed directly at such "ethical" offenses as conflict of interest.

Obviously, our "justice" system is lacking where it counts.

Feb. 25, 2016

Flapper: Our weak justice system should be an issue in the upcoming election. If it is, it will only be because of the Republicans' refusal to vote on a Supreme Court nomination. Best, Don Bauder

Feb. 26, 2016

That a simple majority can determine the fate of a defendant at the Supreme Court level but a unanimous jury is required in the "lower" courts is a logical conundrum.

Feb. 26, 2016

Flapper: A unanimous decision is not required in some civil suits. If a unanimous decision were required at the Supreme Court level, very little would ever pass the court's muster. Best, Don Bauder

Feb. 26, 2016

In criminal cases the level of proof is beyond a reasonable doubt and requires unanimous agreement by jurors to convict. In civil cases the standard is preponderance of evidence and majority agreement must prevail for conviction.

Feb. 27, 2016

AlexClarke: Yes, the standards are "beyond reasonable doubt" in criminal cases and "preponderance of evidence" in civil cases. Best, Don Bauder

Feb. 28, 2016

"If a unanimous decision were required at the Supreme Court level, very little would ever pass the court's muster." Best, Don Bauder

Okay, you've supposedly got the best legal minds in the country on the Supreme Court. If they are intellectually honest, and reach "decisions" based on facts and a train of consistency, unanimous decisions should be the rule, not the exception. Otherwise it doesn't qualify as "supreme."

Feb. 26, 2016

Flapper: Yes, but the best legal minds don't agree with each other. Best, Don Bauder

Feb. 26, 2016

If only we had a Governor who wouldn't play patty cake with industry. Shall we elect another Democrat who fails to work for the people of California or a Republican who doesn't even have to pretend.

Our two party system has long since failed the public.

Feb. 26, 2016

Michael Valentne: Gov. Brown's coziness with the investor-owned utilities is disgusting. Otherwise, he doesn't seem to fraternize with business too much. Best, Don Bauder

Feb. 26, 2016

"Flapper: Yes, but the best legal minds don't agree with each other. Best, Don Bauder"

Then "legal" is a joke. A tool of the monarchy-democracy that erodes rather than enhances freedom.

Feb. 26, 2016

Flapper: I often tease lawyer friends who state that some position is "the law." There is no such thing as "the law." In any courtroom dispute, civil or criminal, one lawyer cites "the law," and the opposing lawyer cites "the law." The judge or jury decides what is "the law." Best, Don Bauder

Feb. 27, 2016

Strict Constitutionalist!

Feb. 27, 2016

Flapper: Note that if Republicans were actually strict constitutionalists, they would not be saying that there will be no vote for a Scalia replacement until after the election. Best, Don Bauder

Feb. 28, 2016

You got my point.

Feb. 28, 2016

Alex Clarke: I don't know that all of them could be prosecuted under RICO. Certainly Peevey, perhaps Florio. Best, Don Bauder

Feb. 28, 2016

John P. Harris: Yes, that is a smirk. However, don't count on Peevey's going to prison yet. He is a close friend of the governor, who is openly doing everything he can to thwart reform of the CPUC, including vetoing reform legislation and making sure that emails don't have to be turned over. Best, Don Bauder

March 1, 2016

Where's the public trust doctrine?

March 1, 2016

Flapper: With the CPUC, it's more like, "Where's the public trust?" Best, Don Bauder

March 2, 2016

So, Don, I just saw a headline yesterday that Pacific Gas and Electric has been fined $112 million for the explosion in San Bruno. Do you have any more info on that?

March 2, 2016

eastlaker: The last I read, the fine was much, much higher than that. That sum does not sound right. Best, Don Bauder

March 2, 2016

I am sure you are right. Need to find the story!

March 2, 2016

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