However, just days before this apology and public promise, Commissioner Florio had been secretly working with former President Peevey to add language to the SONGS settlement to require the $25 million contribution referenced above.

Similarly, at the very moment current CPUC President Picker was acknowledging the problem of having CPUC commissioners be too close with the interests they regulate, he was co-hosting a gala event for former President Peevey that epitomized the coziness between the CPUC and the interests it regulates.

In his introductory remarks as CPUC President, Picker had acknowledged the crisis of credibility at the agency, stating “The most obvious examples are a series of emails that show easy access to CPUC decision makers by utilities and other interested parties. They are troubling and very painful to read.” [18] Within days of that speech, invitations were being sent out to individuals in the energy industry to attend a gala celebration for former President Peevey that was co-hosted by current President Picker. [19] President Picker is reported to have raised money from an energy company, labor organizations and attorneys for the event [20].

Organized by a public relations executive, the Peevey gala seemed to send the message to the energy companies, labor unions and utilities that have significant financial dealings with the CPUC that, despite the criminal investigation, there would be continuity at CPUC. One of the celebration’s co-hosts was former CPUC commissioner, Susan Kennedy, who received a battery contract with SCE in April 2015 [21] that was approved by CPUC in November, 2015. [22]

A San Diego Union Tribune story indicates that, despite President Picker’s promises, he engaged in continuous email exchanges with Kennedy from 2014 until CPUC approved her SCE battery contract in 2015.

The email exchange with then-Commissioner Picker was one of many.

U-T San Diego reported last month that the new commission president engaged in similar backchannel communications with industry executives and lobbyists as his predecessor.

Kennedy’s emails to and from Picker show her counseling him on commission business, offering introductions to industry lobbyists and helping him to comply with state rules governing the disclosure of contributions to the Peevey dinner – all while her Edison deal was in the works. [23]

ii. Contemporaneous to his promises of transparency, President Picker sought to keep secret the extent of his involvement in fundraising for Peevey gala dinner, and his emails relating to SONGS settlement.

According to the San Diego Union-Tribune, which acquired and reported on related emails, President Picker consulted CPUC legal counsel for ways to avoid disclosing the fact that he was raising money from interest groups for the gala celebration for Peevey:

According to emails obtained by U-T San Diego, commission attorneys informed Picker that he would have to disclose that funds were raised in his name.

Picker inquired whether the money raised could be divided among him and other sponsors, staying under a $5,000 reporting threshold. Attorney Christine Hammond said no. He also inquired whether some action was required on his part — such as directly calling someone to ask for money — to trigger the reporting requirement. Hammond said no to that, too.

“You will have to do the reporting, as none of the other sponsors can satisfy your reporting requirement,” Hammond wrote on Jan. 2.

She underlined the "you."

(…)

Picker says his only real role in the event was to pay for his own ticket, that his listing as a sponsor was a mistake and he made no effort to enlist other attendees. His spokeswoman, Terrie Prosper, told U-T San Diego on Feb. 24 that the commission would provide documentation of his payment within a few days, but has yet to do so. [24]

iii. The CPUC refuses to release President Picker’s email correspondence with Peevey and others relating to SONGS

In his January 15, 2016 introductory remarks as CPUC President, Picker said, “Whatever comes out of those investigations, the emails are signs to California citizens, to our stakeholders, and to ourselves, that we may not be ensuring equal access to our decisions and to our decision makers for everyone – our core value of fairness. What I can do as President is to make sure that does not happen again.” [25]

But contemporaneous to those remarks, and since, the CPUC has sought to prevent the release of current President Picker’s emails relating to the SONGS disclosure when he worked as advisor to Governor Brown, even though the correspondences address issues of keen public interest.

During 2012-2014, there were countless back-door meetings with Edison about San Onfore involving the CPUC. In addition to the meeting in Poland and the other 35 secret meetings, there were meetings in London, Los Angeles (the private California Club) and San Francisco. Commissioners Picker, Peevey, and Sandoval participated in several of those meetings. There were also many phone conversations between Edison and CPUC officials regarding San Onofre. Picker participated in many of these secret discussions, both while at the Governor’s office and when he was at the CPUC. After the secret Warsaw meeting, Picker met with Peevey about San Onofre at the very private club – the California Club — in Los Angeles. Picker has failed to produce his emails with Edison and others regarding the plan to end the investigation. [26]

A state Superior Court highlighted that public interest in the email correspondence when it ruled the CPUC should have to justify why it would not release emails. Judge Ernest Goldsmith made a strongly worded call for CPUC to disclose Picker’s SONGS correspondence first in November 2015 and again in January 2016. In November Goldsmith said:

“This is a big deal. This is not a trivial issue to the taxpayers of California. And just like the San Bruno events were not a trivial deal, and when something is big enough, it’s just got to come out. It’s going to come out, and it’s either going to be horribly painful, or you can just do the right thing.” [27]

In January 2016, Goldsmith said:

“Withholding records of allegedly ex parte secret deals resulting in shifting $3.3 billion of utility losses to ratepayers cannot possibly be a regulatory function of the PUC. It is not realistic that the Legislature intended that [Public Utilities Code] Sec. 1759 should be invoked to insulate PUC officials accused of corruption from public scrutiny. [28]

(…)

The core value of a democracy is the right of citizens to know the actions of public officials. [29]

On August 30, the 1st District Court of Appeal reversed the Superior Court’s decision and prohibited it from conducting further proceedings, but the matter could be appealed further, and indeed attorney Aguirre indicated he may do so:

Aguirre disagreed with the ruling, noting that aggrieved parties have a right to be heard at the Superior Court level, but not by an appellate court.

“The appellate court waited until it was too late for the legislature to respond, then announced they were going to shield Gov. Brown’s files from disclosure,” Aguirre said. “They really are not interested in any kind of reform. [30]

Legislative leaders have called on President Picker to release the emails. On March 19, 2015, Assembly member Anthony Rendon, Chair of the Committee issued a statement urging President Picker to release all of the emails relating to the SONGS disclosures:

President Picker, it is my solemn belief that your efforts to reform the commission and restore the public’s trust cannot be completed until the dark clouds of the SONGS settlement and the specter of process manipulation by your predecessor are fully and completely removed. Anything short of total transparency will be viewed by the public, this committee and history as a complete failure to meet the duties of the commission. [31]

iv. CPUC President Picker is reported to have played a key role in killing August 2016 legislation in the California legislature that would have reformed the CPUC and practices related to release of emails.

CPUC reform legislation failed on August 30, 2016 in part due to direct lobbying by CPUC President Picker, according to reports by the Los Angeles Times and San Diego Union Tribune. The legislation would have allowed for the Superior Court to review decisions when regulators refuse California Public Records Act requests, as the CPUC did regarding email exchanges with President Picker while he was working on behalf of the Governor. [32]

The legislation was the result of a June 2016 compromise that resulted from negotiations after Gov. Brown vetoed legislation in October, 2015 that would have required greater transparency by the CPUC. The Bill’s co-sponsor, Mark Leno, told the Los Angeles Times that “I’m not as surprised as I am disappointed” and that Brown "has to understand the commission is only effective as long as it has public trust. And with all the revelations in the past year, and the ongoing criminal investigations, trust has waned.” [33]

D. CPUC’s crisis of legitimacy should lead Commissioners to suspend proceedings on PG&E’s DCPP application

CPUC commissioners committed to democratic process and the rule of law must vote to suspend proceedings on PG&E’s DCPP settlement until CPUC’s crisis of legitimacy is resolved.

EP’s call for CPUC to suspend proceedings has the support from a group of over 50 scientists and environmentalists who on August 11, 2016, published an open letter to Governor Jerry Brown calling for the future of DCPP to be determined by the state legislature, not the CPUC. The group of scientists and environmentalists specifically cited the CPUC’s crisis of legitimacy.

Given the serious harm to the environment, the economy, and the ratepayer interests that would flow from Diablo’s closure, we are deeply troubled by the lack of democratic process surrounding the Joint Proposal. It was decided in secret negotiations between PG&E and unaccountable anti-nuclear groups, some with financial ties to the renewables sector. Sending this proposal to the CPUC, an institution that is struggling with its own crisis of credibility relating to improper relationships with regulated industries, would raise further doubts about the legitimacy of the proceedings. [34]

California’s Air is getting dirtier and it is moving speedily in the wrong direction on climate change. [35] The scientists and their supporters asked the Governor to establish an alternative process. Environmental Progress asks the Commission to suspend this proceeding to allow for such a process.

III. Conclusion

In its Joint Proposal filing PGE asks the CPUC to rush this matter by issuing a final decision by June of 2017 – reducing, by half, the CPUC’s default 18-month time frame for ratesetting proceedings. (Rule 2.1(c). (PGE Filing, p. 8). Even without the influence of the cloud under which the CPUC is operating, a proposal of this importance, which entails abandonment of California’s climate commitments, [36] would not properly be considered within the default time frame, much less a truncated one, and not before an agency that has not reformed itself.

The CPUC should allow the legislature time to act on DPCC and CPUC reform. Before considering a proposal imposing these huge climate, air quality and economic impacts, the Commission should first fully repair its credibility and rebuild public trust in the institution. This will only be accomplished through embracing the transparency the CPUC has thus-far avoided, and allowing time for the criminal investigations to be result in either abandonment, dismissal, or filed charges, accompanied by public disclosure.

Such processes require time. This CPUC has nearly a decade before DPCC’s carbon free, emissions-free contribution to California’s energy system would be removed, even under the Joint Proposal.

Under the very unique circumstances facing the Commission, it should suspend this matter indefinitely.

Respectfully submitted September 7, 2016

[1] Jeff McDonald, “AG Says CPUC Probe Hasn’t Stalled,” San Diego Union Tribune, May 14, 2016. (Exhibit 1)

[2] Jeff McDonald, “State to Reopen San Onofre Settlement Deal,” San Diego Union Tribune, May 9, 2016. (Exhibit 2)

[3] Michael Picker, “Nuclear Power’s Last Stand in California: Will Diablo Canyon Die?” San Francisco Chronicle, November 14, 2015. (Exhibit 3)

[4] California Energy Almanac, “In-State Electric Generation by Fuel Type,” 2016. (Exhibit 4)

[5] California Air Resources Board, “2016 Edition California Greenhouse Gas Inventory for 2000-2014 — by Sector and Activity.” (Exhibit 5)

[6] Jeff McDonald, “AG Says CPUC Probe Hasn’t Stalled,” San Diego Union Tribune, May 14, 2016. (Exhibit 6)

[7] Statement of Probable Cause supporting Search Warrant 71801 for personal email records of Stephen Pickett, Special Agent Reye Diaz, September 25, 2015. (Exhibit 7)

[8] Jeff McDonald, “San Onofre Plan Details Under Scrutiny,” San Diego Union-Tribune, March 14, 2015. (Exhibit 8)

[9] Jeff McDonald, “Aguirre Pushing for Brown’s Emails,” San Diego Union-Tribune, November 13, 2015. (Exhibit 9)

[10] Declaration of Stephen Pickett, April 28, 2015, Exhibit 10)

[11] Emphasis added.

[12] Email from Ronald Litzinger, April 11, 2013, (Exhibit 11) Emphasis added

[13] John Geesman, LinkedIn. (Exhibit 12)

[14] Mark Lifsher, “California Commission Could Get Pro-Consumer Majority,” Los Angeles Times, January 7, 2011. (Exhibit 13)

[15] Rochelle Becker, untitled, Alliance for Nuclear Responsibility, June 19, 2013. (Exhibit 14)

[16] PG&E’s ex-parte communications with Peevey and other CPUC Commissioners in the wake of the natural gas pipeline explosion that killed eight people in San Bruno, California.

[17] CPUC, “CPUC Takes Action in Response Inappropriate PG&E Contact with Agency Officials ,” September 15, 2014. (Exhibit 15)

[18] Michael Picker, “Introductory Remarks,” January 15, 2016. (Exhibit 16)

[19] Jeff McDonald, “Ex-Regulator to Be Toasted by Industry,” January 30, 2015. (Exhibit 17)

[20] Michael Picker, California Form 803, filed February 3, 2015 (Exhibit 18)

[21]Jeff McDonald, “Power Player Got Energy Deal,” San Diego Union Tribune, April 27, 2015 (Exhibit 19)

[22] Jeff McDonald, “CPUC Approves Edison Energy Deals,” San Diego Union Tribune, November 19, 2015 (Exhibit 20)

[23] Jeff McDonald, “Power Player Got Energy Deal,” San Diego Union Tribune, April 27, 2015 (Exhibit 19)

[24] Jeff McDonald, “CPUC boss had questions before disclosing party role,” March 27, 2015. (Exhibit 21)

[25] Michael Picker, “Introductory Remarks,” January 15, 2016.

[26] Letter from Michael Aguirre to Assemblymember Anthony Rendon, April 6, 2015. (Exhibit 22)

[27] Jaxon Van Derbeken, “Judge: Regulator should release Brown emails on nuclear plant shutdown,” San Francisco Chronicle, November 28, 2015. (Exhibit 23)

[28] Jeff McDonald, “Judge Calls for Review of Emails,” San Diego Union Tribune, January 15, 2016. (Exhibit 24)

[29] Jaxon Van Derbeken, “Order could lead to release of emails between Brown’s office, CPUC,” San Francisco Chronicle, January 25, 2016(Exhibit 25)

[30] Liame Dillon, “How a bid to reform the CPUC fell apart on the last day of the session,” Los Angeles Times, September 2, 2016 (Exhibit 26). Jeff McDonald, “2 CPUC Reform Proposals Die, Emails Will Stay Secret,” San Diego Union-Tribune, September 1, 2016. (Exhibit 27)

[31] Letter from Assemblyman Rendon to Picker, March 19, 2015. (Exhibit 28)

[32] Jeff McDonald, “2 CPUC Reform Proposals Die, Emails Will Stay Secret,” San Diego Union-Tribune, September 1, 2016. (Exhibit 27)

[33] Melanie Mason, “Brown vetoes transparency bills for troubled commission, “ Los Angeles Times, October 9, 2015. (Exhibit 29)

[34] Letter from climate scientists and environmentalists to Governor Jerry Brown, August 11, 2016. (Exhibit 30)

[35] Exhibit 31

[36] Diablo Canyon provides 9% of California's electrical needs and 21% of its low-carbon electricity, presuming biomass-sourced electricity is included and credited as “low carbon.” (Source: US Energy Information Administration). California recently adopted SB 32 requiring greenhouse gas emissions to be reduced 40% below 1990 levels by 2030. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB32(Exhibit 31)

An ambitious analysis of how to meet less demanding goals (before adoption of SB 32) already contemplated unprecedented changes to California’s economy, while simultaneously presuming that the Diablo Canyon would operate until 2045 and that the electrical output of the San Onofre Nuclear Power Station (“SONGS”) would be replaced with equivalent emissions-free electricity from a different nuclear power plant. Greenblatt, 2015, Modeling California policy impacts on greenhouse gas emissions, Energy Policy, Volume 78, March 2015, Pages 158–172

http://www.sciencedirect.com/science/article/pii/S030142151400689