Meeting links CPUC probe to San Onofre -- Edison discloses it met at luxury hotel in Poland with former regulator

Union Tribune (2015-02-10) Jeff Mc Donald

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More Info: California Public Utilities Commission, Coalition To Decommission San Onofre, Shutdown Diablo, Shut San Onofre, Stop The Unfair Settlement

Meeting links CPUC probe to San Onofre

Edison discloses it met at luxury hotel in Poland with former regulator

By Jeff McDonald5:44 p.m.Feb. 9, 2015

Hotel Bristol, Warsaw

Southern California Edison belatedly disclosed on Monday that a company executive met privately with former regulator Michael Peevey in Poland two years ago to discuss the San Onofre nuclear power plant and the resulting investigation into its failure.

The meeting took place in March 2013 in Warsaw at the luxury Bristol Hotel, where Peevey and former Edison executive Stephen Pickett talked for about 30 minutes about ways to resolve shutdown issues.

The Bristol Hotel is the same hotel referenced in notes seized from Peevey’s home last month by state agents investigating corruption within the California Public Utilities Commission, of which he was president until Dec. 31.

The disclosure indicates that Edison and its San Onofre plant in north San Diego County have a role in the influence-peddling scandal that has confronted the commission for months.

Until now, the investigation appeared to be focused on Peevey’s dealings with Pacific Gas & Electric, which fired several executives last year after publicly released emails exposed close ties to Peevey during an investigation of a pipeline blast that killed eight people in San Bruno.

U-T San Diego reported last month that materials seized in the raid of Peevey’s Los Angeles area home on Jan. 27 included “RSG notes on Hotel Bristol stationary,” an apparent reference to replacement steam generators — the fatally flawed project that led to the plant’s early closure.

It was not clear which of the many Bristol hotels across the world might have been involved, but the new Edison disclosure identifies Warsaw.

The notes taken from Peevey’s house may have been Pickett’s summary of his meeting with Peevey. According to Edison’s disclosure, Pickett took notes from the meeting in Warsaw, and Peevey kept them.

Pickett “took notes at Mr. Peevey’s direction,” Edison spokeswoman Maureen Brown said Monday. “He gave the notes to Mr Peevey at Mr. Peevey’s direction.”

Communication between utilities and the commission that regulates them, if it takes place outside the normal public process, is supposed to be reported within three days to a list of all interested parties. In this case, Edison made the disclosure 686 days after the meeting.

Peevey did not disclose the meeting at the time it happened either. Utilities commission spokeswoman Terrie Prosper said he was not required to.

Edison said in a statement that Peevey approached Pickett during an industry event in Poland, not the other way around.

The company said it did not report the conversation initially because it did not rise to a level of substantive communication. But that determination changed last week, after U-T Watchdog published the search warrants and noted that the hotel notes were among the items seized.

Edison said it decided to report the conversation “based on further information received from Pickett.”

“While Mr. Pickett does not recall exactly what he communicated to Mr. Peevey, it now appears that he may have crossed into a substantive communication,” the company wrote. “Based on Mr. Pickett’s recounting of the conversation, the substantive communication on a framework for a possible resolution ... was made by Mr. Peevey to Mr. Pickett, and not from Mr. Pickett to Mr. Peevey.”

The company also cited a spirit of reform from new commission President Michael Picker, in explaining why the disclosure is now being made.

The Edison filing Monday confirms that Peevey discussed the project months before settlement discussions between Edison, minority owners San Diego Gas & Electric and several consumer groups began. Peevey was the top executive of Edison before taking over the commission.

The settlement negotiations culminated with a proposal that utility customers pay more than $3.3 billion of the $4.7 billion in costs for premature closure of the plant, which was shut down after leaking radioactive water.

The utilities commission approved the settlement proposal in November, a few weeks before Peevey resigned.

Consumer groups who were excluded from the settlement talks between 2013 and 2014 have opposed the settlement as a bad deal for ratepayers. They seized on the Edison filing Monday, saying it suggests that the deal was reached in secret long before the public knew anything about it.

“This shows that Peevey was involved in the settlement, contrary to his representations,” said former San Diego City Attorney Mike Aguirre, who is now suing to overturn the multibillion-dollar agreement.

“This undermines the settlement approval of the CPUC and necessitates an investigation by the criminal authorities into whether an illegal agreement was made to settle to the case,” he said.

“And they did it in Poland.”

Aguirre tried to confront Peevey about improper communications with Edison executives at a public hearing last year, and Peevey grew angry and refused to answer the question.

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

Matthew Freedman of The Utility Reform Network, one of the consumer groups that agreed to the settlement deal last April, said Monday he was bothered by the Edison filing but defended the agreement he helped negotiate.

“It was a long process to get to a place we felt was reasonable,” he said. “I’m very unhappy to hear about this (but) nobody forced me to agree to anything.

“I don’t take orders from Mr. Peevey’s office and I didn’t make any deals with him.”

Peevey, who is married to state Sen. Carol Liu, served 12 years as commission president.

The utilities commission has been the subject of intense criticism since last summer, when thousands of publicly released emails showed that Peevey regularly communicated with utility executives he was in charge of regulating.

U-T Watchdog reported last monththat the communications were far more extensive than previously understood, publishing a series of emails Peevey exchanged with Edison executives.

The emails showed Peevey regularly communicated with Edison officials, arranged agenda items for them and met them for dinner and drinks. In one particular email, an Edison executive called Peevey “such a dear” and “a great friend.”

State and federal authorities have launched separate investigations into possible criminal conduct.

In addition to the hotel meeting notes seized from Peevey’s home last month, agents took multiple computers, notes, a thumb drive and six years’ worth of day planners.

Peevey is to be the guest of honor at a dinner in San Francisco on Thursday, as reported last week by U-T Watchdog. Scores of utility industry leaders and political appointees of Gov. Jerry Brown will celebrate his years of public service.

The $250 per plate fee for the event at San Francisco’s Julia Morgan Ballroom will benefit the University of California.

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