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Outgoing CPUC Commissioner Lynch Denies Sempra Utilities' Motion Against Her

Outgoing CPUC Commissioner Lynch Denies Sempra Utilities' Motion Against Her

On the eve of her final regularly scheduled business meeting as one of the five members of the California Public Utilities Commission (CPUC), Loretta Lynch late Wednesday denied a motion from the Sempra Energy utilities that the increasingly combative regulator disqualify herself from a vote scheduled Thursday. Sempra's utilities, Southern California Gas and San Diego Gas & Electric, allege that Lynch has a personal bias against them.

The two utilities in a Nov. 18 filing to the CPUC sought to disqualify Lynch from voting in a case in which the Sempra utilities -- particularly SoCalGas -- are accused of conspiring with interstate pipeline suppliers in driving up the wholesale natural gas price at the California-Arizona border in the 2000-2001 western energy crisis period.

As the lead commissioner assigned to the case, Lynch, whose six-year term expires the end of this month, ruled that SoCalGas "has failed to make out a prima facie case that I harbor actual bias against the moving parties. In order to prevail on its motion, SoCalGas must show that I harbor an actual bias against the moving parties. SoCal has not met this standard."

The utilities' motion claimed Lynch arranged a meeting and then set up local television reporters to "surreptitiously" record a private conversation between herself and Lee Schavrien, vice president of regulatory affairs for the Sempra Utilities. Schavrien had no knowledge that the meeting was being recorded. The audio/video recording of the meeting then was aired on a local TV station under the heading "Power Play."

In her ruling late Wednesday, Lynch said the videotaping and Schavrien's subsequent lawsuit "do not demonstrate an actual bias against SoCalGas. My involvement in the videotaping of his statements arose from my concern about industry lobbying at industry-sponsored conferences, not any personal animus against SoCalGas."

Noting it is illegal to record a conversation without the consent of all the parties in the conversation, the utilities said Lynch's action "demonstrates an actual bias against Sempra, making it probable she cannot render a fair and impartial decision in this proceeding." Further, Schavrien filed his civil lawsuit against Lynch for invasion of privacy and illegally taping the conversation.

"Thus, as a result of her own misconduct, Commissioner Lynch has now become so enmeshed in matters involving the Sempra utilities and their officers that she must be disqualified from participating further in this proceeding," the utilities said in their motion. At the meeting between Schavrien and Lynch -- for which Lynch set up the time, place and actual table location -- Sempra's motion said Schavrien raised the issue of ex parte communication about a pending case, but Lynch assured him that was not an issue because she had already communicated with others in the case. After the meeting, Lynch notified CPUC authorities that Schavrien had violated ex parte rules.

Also, Sempra alleged Lynch had showed personal bias in attempting to have the case completed in time for her to vote on it before her term on the CPUC ends Dec. 31. Her influence on the schedule was disclosed by the ALJ in the case.

"With respect to the schedule of the proceeding, SoCalGas has shown nothing out of the ordinary in the procedural rulings in this case," Lynch said in her denial. "Certainly, none of the rulings they cite demonstrate actual bias against SoCalGas."

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