Edison Seeking to Limit PUC’s Police Powers

Southern California Edison is trying to change state laws to severely restrict the Public Utilities Commission’s investigative powers, following the agency’s allegations that the massive 1996 Calabasas fire started on a utility power pole.

That blaze scorched 13,900 acres in the Santa Monica Mountains, hospitalized seven firefighters and left one with burns over 70% of his body.

The chair of the Assembly Utilities and Commerce Committee on Tuesday called it “audacious and outrageous” for the giant utility to attempt to get even with a state regulatory agency for doing its job and protecting the public.

“This is like criminals saying they don’t like how law enforcement treats them so we should take away their guns and badges,” said Assemblywoman Diane Martinez (D-Monterey Park).

Last year, the state orchestrated a massive seizure of Edison documents. Edison executives, still angry over the raid that saw 50 law enforcement officers serve criminal search warrants on its Rosemead headquarters, made no secret of the utility’s intentions when it met recently with top PUC enforcement officials.

“Edison came in here and told us this was in retaliation because we went along on that raid,” said Larry McNeely, an enforcement director for the PUC. “They told us point-blank: ‘We want to make sure this never happens again.’ ”

Gary Schoonyan, who heads Edison’s San Francisco office, acknowledged that he had met with McNeely and expressed the utility’s concern over the raid. But he said the aim of restricting the agency’s police powers is to force a public debate about whether PUC investigators should have the power to serve search warrants and make arrests.

McNeely said Schoonyan made it clear that “they want to repeal our powers altogether.”

The Los Angeles County district attorney’s office in April declined to prosecute Edison after deciding that criminal negligence could not be proved. But the office stated in a 12-page analysis of the case that Edison’s equipment had caused the fire.

Edison is concerned that the PUC’s position might lead to an expansion of empowered investigators who lack proper training and oversight.

“We may be more sensitive to this because of [the raid],” said Julie Miller, an Edison lawyer. But, she added, no adequate safeguards exist to prevent the PUC from introducing evidence seized during an “illegal arrest.”

Edison’s attack on the PUC involves an otherwise innocuous piece of legislation introduced by Martinez that would update and clarify certain sections of state law. Known in legislative parlance as a “cleanup” bill, such actions are virtually never opposed because they rarely deal with substantive policy matters that would attract controversy.

On Tuesday, Edison proposed its own amendment to further restrict the PUC’s police powers.

“Schoonyan told us that Edison’s general counsel was very upset by the raid and wanted to teach us a lesson,” McNeely said. “That’s what this is really about.”

Consumer advocates are watching the bill closely.

“The PUC has to have that enforcement power, no question about it,” said Lenny Goldberg, lobbyist for The Utility Reform Network. “If this is an effort to weaken that, this would be a real problem for consumers.”

The bill, now out of the Assembly, is tentatively scheduled to be taken up next Tuesday by the Senate Energy, Utilities and Communications Committee. “We’re going to watch it like a hawk,” said Randy Chinn, a consultant to the committee.

PUC investigators have had police powers since 1986, though they rarely have exercised them. At first, they dealt mostly with consumer and railroad issues, but lately they have handled cases involving telecommunications companies’ cheating consumers and, most recently, utility safety violations.

All PUC investigators are required to pass the state’s accredited training for peace officers. And as a matter of policy, the agency takes its criminal cases to district attorneys.

PUC investigators have worked criminal fraud cases with the consumer fraud section of the Los Angeles city attorney’s office. “They’re very competent investigators who primarily put together white-collar cases,” said Don Kass, a supervising deputy city attorney.

Kass said the PUC investigators recently brought a case to his attention involving a fraudulent billing practice called “cramming,” in which telephone customers in the San Fernando Valley were repeatedly charged for services they never ordered.

Jenny Ross, a deputy district attorney who convicted Pacific Gas & Electric in Nevada County on 739 criminal counts of the same charges Edison faced last year, called the bill “flagrant retaliation.”

“Essentially what Edison is saying is, ‘We want to be free to violate the law without having to worry about the PUC.’ It’s very disturbing,” Ross said. “I would hope that the Legislature would see it for what it is.”

The threat alone disturbed the bill’s author.

To launch an assault on a regulator in this fashion, Martinez said, “is unconscionable.”

“Instead of owning up that they hid evidence, Edison wants a blanket removal of the [PUC’s] policing authority,” she said. “I cannot fathom a corporation acting this way.”