Hearings planned on PUC, Edison roles in San Onofre settlement

Hearings planned on PUC, Edison roles in San Onofre settlement
An independent audit found problems with the California Public Utilities Commission's hiring of private law firms in connection with investigations on how the commission handled the San Onofre nuclear power plant's emergency shutdown in 2012. (Allen J. Schaben / Los Angeles Times)

A key lawmaker is jumping into controversy at the Public Utilities Commission over cronyism and improper contacts between power companies and regulators — and this time it also involves the shuttered San Onofre nuclear plant.

Assemblyman Anthony Rendon (D-Lakewood), chairman of the powerful Utilities and Commerce Committee, plans to hold oversight hearings, beginning next month, into allegations of wrongdoing at the 1,000-person PUC.


"It's alarming and something we need to take a look at," he said. "We're going to do a thorough investigation and try to get to the bottom of things."

Until recently, much of the PUC criticism has involved ties with the state's largest utility, San Francisco-based Pacific Gas & Electric Co. But now scrutiny is being drawn to Southern California Edison in Rosemead, which owns the nuclear plant along with San Diego Gas & Electric Co.

The California State Assn. of Electrical Workers, a statewide union umbrella group in Sacramento, asked Rendon to "initiate a vigorous investigation and review" of contacts between San Onofre's principal owner, Edison, and Michael Peevey, the two-term PUC president who stepped down at the end of last year.

A legal and financial settlement approved unanimously by the PUC in November called for customers of Edison and San Diego Gas & Electric to pay $3.3 billion of the $4.7-billion total cost of permanently closing the plant near San Clemente. Part of the legislative focus, Rendon said, will be on that settlement.

In response, Edison in a statement accused the association of "raising and mischaracterizing" issues related to the PUC and San Onofre to gain bargaining leverage in ongoing labor negotiations.

Nevertheless, the company said it would "continue to welcome and respond to questions from regulatory and legislative bodies."

Rendon, who represents southeastern Los Angeles County, said he's particularly committed to government openness.

"The issue of oversight and accountability is something my office takes seriously," he said. He noted that council members from five cities in his district in recent years were convicted of corruption and spent time in prison.

Rendon said he was partially spurred to hold hearings after he and Assembly Speaker Toni Atkins (D-San Diego) received letters late Friday from the electrical workers umbrella group seeking the San Onofre probe.

The union group said its request was prompted by last week's disclosure by Edison of the details of one such meeting between a former vice president and general counsel and Peevey during a March 2013 energy conference at a Warsaw hotel.

"The recent revelation that the chief legal counsel for SCE conducted secret clandestine meetings with the president of the CPUC in Poland casts a long and dark shadow over the entire ... settlement and demands a thorough investigation by your committee," wrote Richard Samaniego, the electrical workers' secretary-treasurer. "This revelation coupled with the ... settlement favorable to SCE has seriously eroded the public's trust."

The union official also told lawmakers he wants to know why ratepayers are not receiving a larger share of any future legal settlements with the manufacturer of the steam generators, Mitsubishi Heavy Industries.

He also asked the legislators to look into stock sales by Edison executives around the time of the San Onofre settlement. Thirdly, he asked whether the company acted properly in plans to replace hundreds of information technology workers with contract workers from India.

"All these ethically questionable actions by a California regulated utility ... demand that your committee not only investigate these serious matters but utilize your full subpoena powers in order to provide answers to ratepayers and the public," Samaniego wrote.

Edison countered the union charges, saying it believes that the Warsaw hotel conversations between its executive and Peevey were permitted by law and the final San Onofre settlement was backed by major consumer advocates.

The utility also defended its management stock sales as fully compliant with company policies and U.S. Securities and Exchange Commission regulations.

Peevey's discussions and emails with executives at Edison and Pacific Gas & Electric are being reviewed in separate investigations by the U.S. attorney's office in San Francisco and the California attorney general's office, according to a search warrant served Jan. 27 at Peevey's home in La Cañada Flintridge.

The activities of Peevey are expected to be at the center of the inquiry. Peevey has denied any wrongdoing and has not been available for comment since his departure.

The union move to turn up the political heat on Edison is "huge news," said Michael Aguirre, a San Diego consumer attorney, representing ratepayer organizations that question the fairness of the San Onofre settlement.

"One of the most significant allies that the utilities have had are their very important unions," he said. "Now those unions are recognizing that they are victims of the same wrongdoing."

Having the unions call for a legislative inquiry "gives a lot of political coverage to elected officials to do what's right," Aguirre said, "because they are Democrats and very much aligned with the union."

Aguirre wants the PUC to throw out the settlement and reopen a curtailed investigation into whether Edison is responsible for the design, installation and failure of $680-million steam generators that forced the utility to permanently close the nuclear plant in June 2013.

Rendon's March hearings aren't the only effort by the state Legislature to put its mark on the unfolding PUC scandal. Sen. Mark Leno, an activist Democrat from San Francisco, has introduced a bill that would limit the power of Peevey's successor presidents at the commission and would strengthen internal oversight of safety and management functions.

Twitter: @MarcLifsher