Revolving door between PG&E and CPUC must shut

State Sen. Leland Yee introduced legislation Tuesday to stop the revolving door of employees between the California Public Utilities Commission and the utility companies that it regulates.

Yee’s bill would require a waiting period of two years after a CPUC commissioner leaves the commission before he or she can work as a lobbyist for an agency regulated by the CPUC. It would also prohibit the CPUC from appointing a commissioner or hiring an executive employee who has worked in the previous two years for a regulated agency. The current waiting period for lobbying the CPUC by ex-CPUC employees or commissioners is one year.

While Yee’s bill is a step in the right direction, a five-year waiting period would be more effective in severing the umbilical cord between regulator and regulated. That severance is critical because lives are at stake. Eight San Bruno residents are dead in part because of lax CPUC oversight of PG&E’s shoddy safety practices.

As The San Francisco Examiner revealed last summer, several current and former CPUC officials have intimate connections with the energy utilities they are supposed to regulate. Commission President Michael Peevey is a former CEO of SoCal Edison. The agency’s top lawyer, Frank Lindh, worked at PG&E for 16 years. Delaney Hunter, a former CPUC government affairs chief, became an energy lobbyist in 2008. Former Executive Director Steve Larson left the CPUC in 2007 to work at a natural gas company. Ex-Commissioner Jessie J. Knight now leads San Diego Gas & Electric.

CPUC officials deny there is a conflict of interest, pointing out that the CPUC has imposed more than $500 million in fines on utilities in the past 10 years.

“We’re a long way from being a ‘cozy regulator,’” said CPUC Executive Director Paul Clanon.

This is hard to believe, particularly when a yearlong National Transportation Safety Board investigation of the San Bruno explosion concluded that lax oversight contributed to the disaster.

When CPUC staff discovered problems, as they did in an audit months before the San Bruno blast, they failed to bring the utility before the commission for months. And then the commission often did nothing.

NTSB Chairwoman Deborah Hersman said PG&E “exploited weaknesses in a lax system of oversight” and regulators placed “blind trust in an operator that doesn’t deserve that trust.”

The CPUC should indeed be a regulatory fox scrutinizing utility hen houses. It appears what we’ve had instead is a hen guarding a hen house — while the public gets plucked.

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