PUC Pick Could Face Conflicts
More than any recent appointee, Gov. Gray Davis’ latest choice for the Public Utilities Commission has a financial and professional history that could pose conflicts in his new role.
Michael Peevey takes a seat on the powerful PUC today, even as he rearranges his investments and cuts business ties in order to serve as a regulator without being forced to recuse himself from agency actions. Just this week, Peevey resigned from his position as chairman of a Pasadena energy company he founded 18 months ago.
In picking Peevey to replace Republican Richard A. Bilas, who resigned suddenly from the PUC last week, Davis heralded Peevey’s three decades of experience in the energy industry.
But consumer advocates say that Peevey’s interest in issues facing the PUC will not disappear no matter what he does to disentangle his business connections. His former business associates will have matters before the PUC, critics note, and Peevey thus will be making important decisions that affect onetime colleagues, customers and the like.
A key vote Peevey will soon face on the PUC, for example, involves businesses seeking to buy electricity from non-utility energy companies of the sort that he once ran.
“He’s going to be voting on things that affect the interests of his former customers,” said Harry Snyder, senior advocate for Consumers Union. “The people who paid him, bought his energy services in the past, will have billion-dollar issues in front of the PUC, and Mike Peevey will have one of the five votes affecting his customers’ interests.”
Peevey founded a company, New Energy Ventures, to compete for electric utility customers in California’s new era of deregulation. He sold the company in 1999 for roughly $100 million.
Peevey accused his critics of “stereotyping” him by assuming that because he is a former president of Southern California Edison he will be somehow biased as a regulator.
“If you carry their argument to the logical extreme,” Peevey said, “because I was a utility executive I shouldn’t be on the commission because I’ll be one-sided. Pretty soon the only people you get appointed are dispassionate with no experience. I think you need a cross-section of people to bring various expertise.”
With a varied career that ranges from U.S. Department of Labor economist to California State University trustee, Peevey, 64, said he accepted the PUC job out of a sense of public duty.
His stint lasts until the end of the year, when he could be appointed to a full six-year term. Taking the job has involved some personal sacrifice, Peevey said.
He resigned Friday as chairman of TruePricing Inc., the Pasadena power technology company he helped create 18 months ago.
He has also resigned from the board of directors of Excelergy Corp., a Massachusetts developer of software for energy companies. And he said he is now combing investments to purge stock that could pose a conflict to a regulator of electric utilities, private water companies and telecommunications companies.
Peevey, a Democrat, said he sold off energy stocks before January 2001, when he agreed to serve as an unpaid energy advisor to Davis. He helped the governor accelerate power plant construction, establish conservation programs and draft financial rescue plans for Edison and Pacific Gas & Electric.
“I didn’t want to be accused of anything even though I was a volunteer,” said Peevey, who did not publicly disclose his financial interests as the state’s paid energy consultants were required to do.
Recent amendments to financial disclosure forms filed by his wife, Assemblywoman Carol Liu (D-La Canada Flintridge), show that Liu sold more than $100,000 of PG&E; stock in March 2000 and more than $100,000 of Edison stock in August 2000.
The forms also show that Liu and Peevey purchased more than $10,000 worth of Enron stock last June and sold it two months later.
TruePricing, where Peevey served as chairman until Friday, has business pending before the state’s relatively new public power agency, the Consumer Power and Conservation Financing Authority. The agency was created as a result of last year’s electricity crisis, and it is authorized to spend $1 billion on energy conservation efforts.
Last fall, TruePricing submitted a proposal to the power authority seeking state financing for the installation of meters and computer software it had developed. The equipment would allow small businesses such as a restaurant to track electricity consumption hour by hour.
The TruePricing proposal and 10 others will be considered by the public power authority board on Friday. The power authority is chaired by S. David Freeman, who worked alongside Peevey when both served as unpaid energy advisors to Davis last winter.
