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Legislative Reforms For CPUC Urged at Hearing on Ex Parte Scandal

The California Public Utilities Commission (CPUC) on Wednesday held an unprecedented public hearing on reforming the five-member regulatory panel's inner workings, but much of the feedback it received pointed toward proposed legislative reforms.

A focus of the hearing were recent third-party reports commissioned by the CPUC that concluded ex parte safeguards against abuses in communications between commission decision makers and the utilities they regulate are broken (see Daily GPIJune 25).

The CPUC has been adopting reforms internally since revelations of the extent of ex parte communications and how they have influenced decision-making emerged last fall (see Daily GPISept.16, 2014). Wednesday's hearing by a policy/governance committee of the regulatory body was the latest step in those reforms.

Elected officials and consumer advocacy organizations, such as San Francisco-based The Utility Reform Network (TURN), have continued to criticize the CPUC and major utilities it regulates that have been caught up in the e-mail scandal, Pacific Gas and Electric Co. and Southern California Edison Co. (SCE).

The author of one of the recently released critical reports, Michael Strumwasser, a Los Angeles-based attorney with Strumwasser & Woocher LLP, reiterated at Wednesday's hearing that "ex parte communications have come to undermine record-based decision making" at the commission.

While advocating pending state legislation (SB 660) that would limit investor-owned utilities' ability to influence regulators, TURN called for "real CPUC reform and accountability" for the state regulators, whose governance committee has recommended a new code of conduct for CPUC commissioners.

Contending that private meetings -- rather than public hearings -- have been where critical decision-making has taken place in the past, TURN Senior Attorney Thomas Long said, "too often, this process shuts out consumers. SB 660 would shut the backdoor to the commission that has been wide open to utilities in the past."

Existing ex parte rules allow for little real disclosure, said Long, adding that little substantive information about the communication has been given, and past reports have omitted any comments by the CPUC commissioners involved. The 178-page Strumwasser report includes numerous recommendations, one of which calls for prohibiting most ex parte communications.

As a backdrop to the CPUC meeting and public comments, a regulatory judge earlier this month accused SCE of up to 10 unreported ex parte communications over a 15-month period involving regulatory considerations surrounding the closure of the San Onofre Nuclear Generating Station. It could result in up to nearly $34 million in fines for the utility (see Daily GPIAug. 6).

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