CPUC First: Commissioner Asked Not to Vote on Insider Contract
San Francisco--For the first time in recent history, a sitting California Public Utilities Commissioner has been formally asked to recuse himself from a vote. In an unusual motion filed late yesterday, The Utility Reform Network (TURN) and The Utility Consumers' Action Network (UCAN), California's established utility consumer advocacy organizations, jointly demanded that CPUC President Michael Peevey recuse himself from an upcoming vote on a controversial contract between Calpine and San Diego Gas & Electric. Normally, parties at the CPUC do not take this unusual step out of fear of Commissioner retaliation.
However, confidential evidence presented in this case revealed that Commissioner Peevey played a direct and decisive role in negotiating the deal between SDG&E and Calpine. His open support for the contract makes it impossible for him to provide the impartial decision-making required of CPUC Commissioners. Internal utility documents show that President Peevey and his proxies personally participated in negotiations between Calpine and SDG&E with the goal of compelling SDG&E to contract with Calpine. The contract was contested by a number of parties on the grounds that SDG&E didn't need the power, the prices and terms were not good for consumers and competing bidders were shut out.
In over 30 years of advocacy, TURN has never before requested recusal of a sitting Commissioner. "It's a sign of how out of whack the Commission's process has become if a Commissioner can take the lead in crafting a 'deal' and then vote on whether that 'deal' is reasonable" said TURN Executive Director Bob Finkelstein. "Unfortunately, President Peevey has established a track record of hands-on involvement in disputed matters, including the PG&E bankruptcy and the SDG&E "intermediate term contract" case. When a Commissioner gets involved at this level, it creates an impression of bias in favor of the 'deal' that severely harms the CPUC's credibility as an independent agency."
"The documents show that SDG&E's position on the contract changed dramatically after phone calls from President Peevey," said Michael Shames, Executive Director of UCAN. "Peevey may be able to use his control of SDG&E's purse strings to force SDG&E to capitulate, but ratepayers can't afford the tens of millions that Peevey's manipulations will cost the public."
