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Second California Utility Accused of Ex Parte Violations With Regulators

A regulatory commission judge in California on Wednesday issued a ruling accusing a second  major utility, Edison International's Southern California Edison Co. (SCE), of up to 10 unreported ex parte communications over a 15-month period. It could result in up to nearly $34 million in fines for the utility.

Nearly a year ago, the California Public Utilities Commission (CPUC) was shaken to its core when another major utility, Pacific Gas and Electric Co. (PG&E), filed an internal investigation report admitting a number of inappropriate contacts between utility and state regulatory staff over a sustained five-year period (see Daily GPISept. 16, 2014). The initial fallout cost the jobs of three PG&E executives and a top aide to the state's chief regulator, Michael Peevey, who later retired under a cloud. Investigations are continuing in that case.

A CPUC administrative law judge (ALJ) ruling said that the violations occurred between March 26, 2013 and June 17, 2014, and each offense could lead to penalties up to $50,000/day. The five-member CPUC also could impose additional sanctions, not necessarily monetary, a San Francisco-based CPUC spokesperson said.

ALJ Melanie Darling ordered SCE to show cause as to why it should not be sanctioned for the 10 unreported communications with the CPUC and to do so by Aug. 20.

SCE said it was disappointed in the ruling but will comply with the show-cause filing deadline. It was also pleased that the CPUC judge rejected allegations from an anti-nuclear group, Alliance for Nuclear Responsibility, that there were actually 72 separate ex parte violations.

“SCE’s leadership strives to be conscientious and comply with the commission’s rules,” said SCE President Pedro Pizarro. “Based on the information we had at the time, we did not believe these communications were reportable. We’re disappointed that the ruling reaches a different conclusion.”

The communications in question were related to possible CPUC resolution of cost allocations at issue as a result of the Jan. 31, 2012 shutdown of SCE's San Onofre Nuclear Generating Station, which was subsequently closed permanently. The ALJ order also mandates SCE to show cause why it should not be found to have violated the state regulatory commission's ethics rule (Rule 1.1) on more than one occasion, and if those violations are found to stick, why SCE should not be held in contempt of the CPUC and be subject to additional penalties and sanctions.

Darling's ruling bans all parties and interested parties from making any individual ex parte communications regarding the subject matter of the ruling. All parties are permitted to submit statements recommending action the CPUC could take.

The assigned CPUC commissioner in the case, Catherine Sandoval, said the ALJ ruling "reflects meticulous analysis of the relevant law, CPUC rules and decisions, facts, and the record submitted."

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