Big fine for back room conversations with CPUC

4 December 2015 by Steve Blum

That’s one hell of a dinner tab.

Talking to the wrong person at the wrong time at the California Public Utilities Commission can be very expensive. Yesterday the CPUC imposed a $17 million fine on Southern California Edison (SCE) for, among other things, not reporting private conversations with former CPUC president Michael Peevey and current commissioner Mike Florio, nor an email sent to all five commissioners.

Under state law and CPUC rules, anyone who’s involved in particular kinds of business with the commission is required to file a formal report of any private conversation or other exchange – known as ex parte communications – with a commissioner or top level staff.

According to the decision approved yesterday, SCE executives made a habit of having off the record conversations with Peevey. Including one at a conference in Poland where SCE’s then-executive vice president Stephen Pickett claimed to have merely listened as Peevey dictated terms of a deal regarding the San Onofre nuclear power plant. Pickett took detailed and well organised notes – included as an exhibit in the decision – of the terms Peevey supposedly offered. Surprisingly detailed and well organised for what SCE tried to characterise as an informal, and purely one-way communication.

Although Peevey, and potentially others, face possible criminal charges, there’s apparently no complementary requirement that requires similar disclosures by commissioner – SCE is being held completely responsible for failing to abide by CPUC rules. The ex parte rules would have been tightened up under a bill passed by the California legislature earlier this year, but it was vetoed by governor Brown.

The vote to impose the fine was four to nothing, with Florio understandably abstaining.