Mike Aguirre gets cussed out at CPUC

Union Tribune (2014-05-22) Morgan Lee

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More Info: Shut San Onofre, Stop The Unfair Settlement

The president of the California Public Utilities Commission swore and angrily refused to answer questions last week at an unusual hearing at which he was asked about communication with his former employer, Southern California Edison.

The president, Michael Peevey, was questioned by former San Diego City Attorney Mike Aguirre about his role if any in reaching a proposed settlement between utility companies and consumer advocacy groups regarding $4.7 billion of shutdown costs for the San Onofre nuclear power plant.

Aguirre asked Peevey if he had any meetings with Edison, the company he once headed, regarding the settlement.

Such contact would be inappropriate because Peevey and the commission are supposed to be impartial arbiters at public proceedings regarding whether the settlement is fair to all parties.

Aguirre is making the case that it's a bad deal for utility customers to cover $3.3 billion of the shutdown costs, as proposed in the settlement.

“I’m not here to answer your goddamned questions,” Peevey told Aguirre. “Now shut up — shut up!”

The utilities commission said this week that Aguirre’s questions were out of line at the hearing in San Francisco, where Peevey and Commissioner Mike Florio were listening firsthand to witness testimony regarding the proposed settlement.

“Mr. Aguirre made a series of improperly posed questions to the commissioners,” said spokeswoman Terrie Prosper. “To the extent President Peevey and Commissioner Florio chose to briefly respond to improperly posed questions, that was a choice; they had no duty to respond in that forum. The administrative law judge ruled the questions out of order.”

U-T Watchdog followed up, asking Peevey the same question regarding contact with Edison, to see if he might answer it outside the heated hearing. He declined an interview and released a statement that did not answer the question.

“The proposed settlement was conceived and agreed to by the settling parties without any knowledge by me of its contents,” Peevey said. “I remain focused on evaluating it on its merits. It is true, I was employed by Southern California Edison, but left that employ more than 20 years ago. My commitment since joining the CPUC more than 12 years ago is to serve the public interest by promoting safety and ensuring reliable utility service at reasonable rates.”

Peevey’s outburst came near the close of a three-hour evidentiary hearing May 14 on the settlement proposal, which would close the door on further investigations of what went wrong at San Onofre, which closed in January 2012 after tubes carrying radioactive water sprung a leak.

The five-member commission is likely to decide this summer whether the settlement is fair. Several consumer advocates that were excluded from negotiations are objecting, including Aguirre’s effort on behalf of one representative customer.

Last week’s evidentiary hearing on the proposed settlement began as a dry recitation of terms of the proposed settlement, with corroboration from sworn witnesses, including Southern California Edison President Ronald Litzinger.

At the outset of the hearing, Administrative Law Judge Melanie Darling told participants to “exhibit professional and courteous conduct,” invoking commission rules requiring the “respect due to the Commission, members of the Commission, and its administrative law judges.”

Aguirre set out to prove that the utilities, the commission and approved consumer groups orchestrated the settlement, purposely short-circuiting any examination of Edison’s conduct leading up to the engineering malfunction.

He asked Peevey whether he had communications with plant owners or consumer advocates about the settlement as it was negotiated over the past year.

Peevey answered specifically that he never talked about the settlement with Matt Freedman, the attorney for The Utility Reform Network, a San Francisco-based consumer group involved in the negotiations. He did not address anyone else he might have met with at TURN or Edison.

It was when Aguirre asked a follow-up question, again regarding Edison, that Peevey angrily declined to answer.

According to a transcript of the hearing, Aguirre responded by saying, “Really, that’s how you perform yourself?”

Judge Darling attempted to cut off the conversation, threatening to sanction Aguirre, but the two men exchanged further words for a minute.

“I don’t have to answer anything,” Peevey said to Aguirre, “... You come here and berate this place. That’s unfair and unreasonable on your part, and you know it.”

Aguirre shot back, “No. You are the one that should be ashamed.”

Ray Lutz, of the Coalition to Decommission San Onofre, witnessed Peevey’s shouting at the hearing.

“It was an unbelievable outburst that was completely unexplainable,” said Lutz, an opponent of the settlement agreement and an ally of Aguirre. “I think it is appropriate for these commissioners to be questioned about their interactions with the utilities as the settling parties.”

The commission requires disclosure of discussions regarding specific cases with commissioners and their advisers.

According to those disclosures, Edison officials met, held phone conversations or had email exchanges with commissioners or their staffs on seven occasions while settlement negotiations were underway, according to disclosure forms filed with the utilities commission.

A meeting on Dec. 4, 2013, brought together Peevey with Edison officials including the utility’s attorney in charge of the settlement negotiations. By Edison’s account, its conversations were about the early phases of the San Onofre cost investigation, with no mention of settlement discussions.

A week before the hearing, Aguirre asked for an order compelling Edison and other parties to the settlement to reveal any communications with the commissioners, their staffs and the administrative law judges overseeing the case.

A day after the hearing, Commission Judge Melanie Darling rejected the request, saying Aguirre never tried to directly obtain the records informally “in a good-faith effort” from Edison and TURN. She cited statements by the utility and consumer group that no responsive documents exist.

Aguirre says Peevey’s outburst at the May 14 public hearing raises questions about his impartiality.

“Instead of saying, ‘You know what, I never had any conversations with Edison, I’m good on that,’ instead he (Peevey) acts like someone who has something to hide,” Aguirre said.

Peevey worked at Edison until the mid-1990s, rising to the rank of president as a crucial point of contact with the utilities commission.

Appointed as commission president by Gov. Gray Davis in 2002, he went on to write the commission’s authorization of the steam generator replacement project at San Onofre — the same steam generators that malfunctioned, precipitating the plant’s closure.

Edison was cited by federal nuclear safety regulators in December for failing to properly check the design of the faulty steam generators that disabled San Onofre, without sanctions. The manufacturer of the steam generators, Mitsubishi Heavy Industries, was cited for flawed computer codes used in the design of the generators.

Fundamental causes and responsibility for the steam generator failures were to be addressed in phase three of a four-phase investigation by the utilities commission. The probe never got that far before it was put on hold in April in order to evaluate the settlement proposal.

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