Power for the people
California’s utilities crisis won't end without reform of the PUC (Third in a series examining the performance of electric utilities in California)
By John Grula 05/03/2012
The state agency that ostensibly regulates and oversees the operation of California’s electric, gas and water utilities, the Public Utilities Commission (PUC), is expected to soon release a final report on the dismal performance of Southern California Edison (SCE) during and after the severe windstorm that struck Pasadena and surrounding communities the night of Nov. 30, 2011.
As reported in earlier installments of this series (Dec. 29 and Feb. 9), whereas only 10 percent of Pasadena Water and Power (PWP) customers lost power during the windstorm, the blackout rate in the surrounding communities served by SCE approached 100 percent. SCE also took much longer to restore service to all of its customers than did PWP. Primary oversight of community-owned, not-for-profit PWP is the responsibility of the Pasadena City Council. In the case of investor-owned, for-profit SCE, oversight and regulation is the responsibility of the PUC.
It will be interesting to see how much of the PUC’s final report also addresses SCE’s dismal performance before the windstorm, which was arguably even worse than during and after the disaster. I’m referring to SCE’s shoddy maintenance of its infrastructure (some of which even SCE admits is at least 60 years old), serious violations of state laws that prohibit the overloading of power poles with wiring and equipment and its failure to upgrade its infrastructure the way PWP has done by putting a large percentage of its primary power distribution lines underground.
SCE’s poor performance is traceable to its putting profits ahead of people and the interests of its stock shareholders above those of its customers. In sharp contrast, PWP is not driven by profit, and its customers come first. It is not beholden to any stock shareholders.
But there is a larger story here and a lesson to be learned for the entire state of California. Approximately 76 percent of California’s 38 million residents receive their electricity from one of two investor-owned, for-profit utilities: SCE, which provides power to 14 million people in Southern, Central and Coastal California, and Pacific Gas & Electric (PG&E), which serves 15 million people in Northern California. Both SCE and PG&E are now embroiled in major scandals involving negligence and dereliction of duty.
Everyone in the San Gabriel Valley area who lived through the Nov. 30/Dec. 1 windstorm knows SCE has big problems. However, perhaps forgotten by many locals is the horrific gas explosion in the Bay Area city of San Bruno on Sept. 9, 2010. On that day, a leak in a 30-inch PG&E gas pipeline caused an explosion and inferno that killed eight people, injured dozens more and destroyed 38 homes.
According to the San Francisco Chronicle, PG&E was warned in a Feb. 13, 2009 letter from the PUC that it was failing to apply adequate safety procedures to its gas pipeline system. Later, an Aug. 30, 2011 National Transportation Safety Board report placed the blame squarely on PG&E and said the explosion was caused by substandard and poorly welded pipe that should have been detected by the company when the pipe was originally laid in the ground in 1956. A PUC report issued earlier this year also found that PG&E violated numerous state and federal safety laws leading up to the San Bruno gas-pipeline disaster and failed to inspect the line for flaws, according to the Chronicle.
Why has the PUC, despite its issuance of warning letters and after-the-fact reports, not done a better job of providing oversight and regulation of SCE and PG&E? Part of the problem is that like many state agencies, it is underfunded and understaffed. But there is a deeper problem which has received little attention.
In his recent exposé, “PUC chief: Fox watching the henhouse,” columnist Thomas Elias revealed that the man who has been the head of the PUC for the last nine years, Michael Peevey, is a former president of SCE. Not only is this a blatant example of a corrupt revolving door and a clear case of conflicting interests, but Elias went on to disclose that less than a year after the San Bruno disaster, Peevey and his wife, Democratic state Sen. Carol Liu of La Cañada Flintridge, went on a 12-day “travel-study” junket to Spain with a senior vice president of PG&E. But wait, there’s more. According to the Pasadena Star-News, in the past four election cycles (2004, 2006, 2008 and 2010) SCE, its affiliates and employees contributed $35,050 to Sen. Liu’s re-election campaigns.
Of course, she’s not the only one. During the same period, Assemblyman Anthony Portantino (D- La Cañada Flintridge) received $14,050 from SCE. Sen. Bob Huff (R-Walnut) received $3,310, and the list goes on. Now we have a better idea of why the PUC and California legislators have not been more effective in riding herd on SCE and PG&E. Until we replace Michael Peevey and get independent leadership of the PUC (PWP General Manager Phyllis Currie would be a great choice) and the corrupting influence of corporate money out of our political system, we will continue to have more San Brunos and more windstorm-related blackouts.
John Grula, PhD, is affiliated with the Southern California Federation of Scientists.