Davis Names Former Edison Chief to PUC

To a chorus of protests from consumer groups, Gov. Gray Davis on Tuesday appointed Michael R. Peevey, a former head of Southern California Edison, to the state panel that oversees utilities.

Peevey, 64, an economist and entrepreneur who made millions of dollars during the state’s failed deregulation effort, was named to the California Public Utilities Commission, effective Saturday.

“With more than three decades of experience in the energy and environmental industries and academia, Michael Peevey brings a broad background of knowledge to the PUC,” Davis said in a statement. “His insight on the ever-changing electricity market will be invaluable to the commission as it makes decisions about California’s energy future.”

Peevey served as a special energy advisor to Davis during the energy crisis, acting as intermediary with utilities and the energy industry.

He replaces Republican Richard Bilas, who resigned last week and whose term expires at the end of the year. Peevey’s appointment gives Davis four commissioners on the five-member panel.

Davis’ appointees, especially PUC President Loretta M. Lynch, have not always moved as fast as he wanted or in the direction he wished.

Peevey said he has a good working relationship with Davis. “To the maximum extent possible, I want to work in concert with him.”

But consumer groups that had urged Davis not to appoint someone with connections to the energy industry or utilities were angered.

“Gov. Davis has once again placed the power industry ahead of the public,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights in Santa Monica. “It’s outrageous that the governor would make someone with such long-standing ties to the energy industry one of the state’s chief energy regulators.”

Matt Freedman, an attorney with the Utility Reform Network, said consumer groups also fear that Davis eventually will strip Lynch of the PUC presidency and bestow it upon Peevey.

“We think that would be a disaster for consumers,” Freedman said.

Peevey, who is recovering from lung cancer surgery, said it is unfair to stereotype him because of his associations and past jobs.

“I am doing this thing at some sacrifice to me because I feel I can represent the public interest in good fashion,” he said. “I want to see the economy in California improve, rates come down, and I want to enhance and promote green energy.”

Associations of energy providers and large industrial users immediately hailed the appointment of Peevey, whose experience ranges from utility executive to chief of an energy-saving software company.

“He knows how the real world works, which would be a welcome change at the PUC,” said Jan Smutney-Jones, executive director of the Independent Energy Producers Assn.

D.J. Smith, consultant and lobbyist for several energy interests who has known Peevey for more than 15 years, said, “He is very independent. I don’t expect him to agree with my clients on every issue. But I would much rather deal with someone who understands the issues, which are arcane, complex and controversial.”

Peevey, a UC Berkeley graduate and father of three, is married to Assemblywoman Carol Liu (D-La Canada Flintridge).

He left Edison in 1993. He then did consulting work for about 18 months before starting an energy service company, New Energy Ventures in Los Angeles. He sold it for about $100 million in 1999 to AES Corp. He sold his AES stock for about $12 million.

Peevey said he disposed of other energy holdings to avoid any conflicts with his wife’s job as lawmaker. And he sold additional stocks, including Enron Corp. stock, last year before signing on as an advisor to Davis.

PUC spokeswoman Terrie Prosper said the commission was pleased that the governor acted so quickly to appoint a successor.

And Henry Duque, the lone Republican on the panel, said he has known Peevey since his days at Edison and praised him as a “sound businessman. He understands what businesses do.”

Consumer groups accused the Davis’ office of timing the appointment so that it would get lost in election news. But Steve Maviglio said the governor’s office wanted to act quickly because of the business before the commission.