Amid protest, a call for a more ethical Public Utilities Commission

'This has nothing to do' with investigation of former PUC President Michael Peevey, organizer of fete says

The new head of the beleaguered Public Utilities Commission vowed Thursday to forge  changes at the powerful regulatory agency "to ensure more ethical behavior" by commissioners and high-ranking staff.

"Ethical behavior is paramount for everyone in this organization, top to bottom," President Michael Picker said at a morning meeting at the PUC's San Francisco headquarters. "But unless it's clear that the leadership of the organization is resolved to act ethically, then the organization will not follow the high standards we expect of ourselves."

Picker's remarks were greeted with applause at the meeting. Hours later, a group of fewer than a dozen protesters gathered in San Francisco's financial district to shame attendees at a "celebration" of the public service career of Picker's predecessor, Michael Peevey.

Peevey, 77, left office Dec. 31, after two six-year terms as president. He retired under pressure amid an ongoing corruption scandal surrounding criticism that the PUC regulators were too cozy with industry, particularly the state's largest utility, Pacific Gas & Electric. 

Protesters said they were outraged by the testimonial dinner. "I am appalled that all these people who have financial interests in front of the PUC, the California Energy Commission and the California Air Resources Board are here to celebrate someone who likely violated the law," former PUC Commissioner Loretta Lynch said.

Lynch served as PUC president before Peevey. The two regularly tangled at public meetings as the PUC confronted the California energy crisis of 2000-01.

Peevey, utility executives and some top-ranking PUC officials are the focus of investigations by the U.S. Department of Justice and the California attorney general's office, which served a search warrant last month on Peevey's La Canada Flintridge home.

The warrant indicated that law enforcement was looking for evidence of bribery, obstruction of justice and improper contacts between utility lobbyists and Peevey. 

Neither Peevey nor his wife, state Sen. Carole Liu, were seen entering the event at the historic Julia Morgan Ballroom on the 15th floor of the Merchant Exchange Building. Many of the guests apparently evaded the protesters by entering through an underground garage.

Organizer Don Solem, a Marin County public relations expert, defended the gala, emceed by former San Francisco Mayor Willie L. Brown Jr.

"Obviously, there's an investigation underway," Solem said, "but this has nothing to do with that."

Peevey, he said, did much to help the state weather the energy crisis and develop wind, solar and other clean sources of renewable power.

marc.lifsher@latimes.com

Twitter: @MarcLifsher

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