REGULATOR, EDISON HAD ‘REGULAR’ CHATS -- Emails reveal calls with PUC member Florio, whose contacts with PG&E prompted recusal

Union Tribune (2015-03-03) Jeff Mc Donald

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REGULATOR, EDISON HAD ‘REGULAR’ CHATS

Emails reveal calls with PUC member Florio, whose contacts with PG&E prompted recusal

By Jeff McDonald5:05 a.m.March 3, 2015

The state utility regulator who recused himself from future Pacific Gas & Electric business after his behind-the-scenes emails were released publicly has taken part in similar back-channel discussions with Southern California Edison, newly obtained records show.

In one email obtained by U-T San Diego, California Public Utilities Commission member Michel Florio referred to his “ ‘regular’ Wednesday 1:30 call” with Edison officials.

In another, he discussed a rate-setting case with a company executive while the application was still pending — even after the Edison representative raised questions about whether the communication was allowed.

“Thank you Akbar — I was just trying to follow through on the training you’ve given me over the years!!” Florio responded to Edison Vice President Akbar Jazayeri in 2012. “I don’t see an ex parte problem as we’re just working out numbers on a technical level.”

Commissioners are not supposed to have so-called ex parte communications about pending applications, as they are supposed to make impartial decisions based on documents and testimony in the public record.

If they do have private conversations of any substance on a pending matter, the discussion must be disclosed within three days.

Florio did not respond to repeated requests about his emails to Edison, the majority owner of the failed San Onofre nuclear power plant that is costing ratepayers $3.3 billion in costs from its premature closure.

Commission spokeswoman Terrie Prosper said the Edison emails to and from Florio were not improper because they were not meant to influence the commissioner.

“The communications you cite are regarding our oversight of the company, not about lobbying,” she said. “The calls mentioned were during the immediate aftermath of the (San Onofre) outage and ended when the CPUC opened a proceeding.”

Edison spokeswoman Maureen Brown also said the “regular” Wednesday calls were organized to discuss the San Onofre steam generator failure that shut the plant in January 2012. She also noted that Jazayeri specifically asked Florio if discussions about the rate hike were allowed.

“Only after Commissioner Florio told him that the rules permitted such communication did Mr. Jazayeri provide the information requested,” Brown said.

The emails show Jazayeri sent a spreadsheet attachment 13 minutes after Florio said it would not be a problem. The material outlined company rate forecasts for the 2013 and 2014 calendar years (calling for increases) before the application had been approved.

The Florio-Edison emails are the most recent records released by the commission under the California Public Records Act.

They and previously released correspondence show commissioners and other regulators in frequent, casual and often friendly dialogue with utility officials they are appointed to oversee.

The new batch was released Thursday to former San Diego City Attorney Michael Aguirre and his law partner Maria Severson, who are suing the commission over San Onofre shutdown costs.

Aguirre said the emails make it clear that ratepayers and consumer advocates have “no chance” of receiving an impartial hearing by commissioners who interact so closely with utilities.

He noted that Florio and former commission President Michael Peevey voted to approve the agreement charging ratepayers $3.3 billion out of $4.7 billion of shutdown expenses after the plant stopped producing electricity and after they had multiple private discussions with company officials.

“The reason you don’t want one-sided presentations is you don’t get to the truth,” Aguirre said. “The commissioners were completely misled on San Onofre. They can’t make good decisions by hearing half the story.”

Sen. Jerry Hill, D-San Mateo, said Florio should know better than to communicate with utility officials in private, because before his commission appointment he spent years at The Utility Reform Network, a San Francisco consumer advocacy nonprofit.

“For someone who had been with TURN for over three decades, this shows how long the line has been crossed and how pervasive this problem has been,” said Hill, whose district includes the site of a PG&E pipeline explosion that killed eight people in 2010.

Hill said Florio should no longer vote on any applications Edison has pending before the commission.

“I’ve been willing to give him the benefit of the doubt along the way,” Hill said. “He claims he’s realized the error of his ways, but I don’t know. It’s now becoming a greater question.”

The latest Edison emails are similar to the conversations Florio and Peevey had with PG&E officials after the 2010 explosion in San Bruno.

The city of San Bruno filed a lawsuit to secure access to those public records, which eventually prompted Peevey to step down and led Florio to recuse himself from considering PG&E-related applications going forward.

Agents from the state Attorney General’s Office executed a search warrant at the commission’s San Francisco headquarters in November, seizing boxes of materials and data.

State investigators also searched Peevey’s Los Angeles area home in January. Among the items collected that day were “RSG notes on Hotel Bristol stationary,” an apparent reference to the ill-fated replacement steam generator project that caused the permanent closure of San Onofre.

Days after U-T San Diego reported that the criminal investigation was expanding beyond PG&E to include San Onofre, Edison filed notice of an ex parte meeting that Peevey held with one of its executives at the Hotel Bristol in Warsaw, Poland.

The utility said it only recently had received information, leading company lawyers to think the conversation should have been disclosed two years earlier. One of the new emails shows Florio may also have been comfortable at casual meetings with parties that have business before the commission.

According to a June 2014 email, Florio was invited to a July 18 “Energy policy discussion, wine and dinner” at the home of consultant Eric Woychik, whose clients include Southern California Edison.

Also invited were Edison senior manager Mark Martinez, TURN attorney Matthew Freedman and Michael Shames, the former head of San Diego’s Utility Consumers’ Action Network.

Neither Woychik nor Shames responded to questions about the gathering. Freedman said no one from Edison — or any utility — attended.

“It was a social gathering, and we did not discuss any issues relating to cases pending before the CPUC,” Freedman said.

The utilities commission awarded Shames $163,000 in “intervenor” fees, paid to those who advocate on behalf of the public, in December. Freedman is seeking almost $290,000 in San Onofre-related fees from the commission.

Prosper said there was nothing untoward about the dinner.

“Talking about long-term industry trends and scrupulously avoiding ex parte on pending cases is allowed,” she said. “No utility staff attended, though one was invited.”

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