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State audit: California's energy regulator open to improper influence from utilities, contractors

Crews work in December 2015 on stopping the gas leak at the Aliso Canyon facility near Porter Ranch. (Dean Musgrove / Associated Press)
Crews work in December 2015 on stopping the gas leak at the Aliso Canyon facility near Porter Ranch. (Dean Musgrove / Associated Press)

California’s energy regulator doesn’t guard against the appearance of improper influence from utilities when making decisions, fails to fully disclose important communications and skirts state rules when handing out contracts, according to a new state audit released Thursday.

The audit of the California Public Utilities Commission reveals at greater depth the agency’s problems in recent years as its faced significant criticism over its handling of the 2010 natural gas pipeline explosion in San Bruno, negotiations surrounding the 2013 shutdown of San Onofre nuclear power plant and last year’s Aliso Canyon gas leak.

Auditors found two dozen cases in which CPUC didn’t follow state rules before awarding contracts without competitive bids, $2.4 million in unexplained contract spending and no evidence that the agency monitored performance in nearly a third of the 60 contracts it reviewed.

“The shortcomings we noted in CPUC contracting practices resulted from a lax control environment that the CPUC has allowed to persist,” the audit said. “This lax environment is characterized by outdated guidance to staff, the absence of supervisory review, and a lack of training for key staff members.”

For years, state lawmakers have been trying to pass legislation to overhaul the agency. But last month, the main bill in a reform package died after the bipartisan coalition and agency support for the deal wavered. Some changes that were passed, including greater disclosure of agency communications, aim to address problems found by the auditor.

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