In an election year move that is sure to stimulate commentary among political observers, California Gov. Gray Davis late Tuesday named a former utility executive and more recently an entrepreneur in the energy services business, Michael R. Peevey, to the California Public Utilities Commission (CPUC), effective Saturday (March 9).

Peevey will fill out the rest of the term of Richard Bilas who announced earlier this month that he was resigning at the end of the business day last Friday. Bilas stuck around last week for a major vote on suspension of direct access, retail customer choice. However the CPUC once again deferred action on the issue.

Peevey is a pro-market Democrat with a master’s degree in economics from the University of California-Berkeley, and a former research director for the state organized labor federation, AFL/CIO, and head of a business-labor-environmental coalition. He will serve the rest of the year for Bilas, a pro-market, Republican-appointed economist and former university economics professor who previously served two five-year terms on the California Energy Commission before coming to the CPUC.

Davis could re-appoint Peevey at the end of this year for a six-year term on the CPUC, which oversees private sector energy, telecommunications, water, trucking and public transportation industries in a state that is listed as the world’s fifth biggest economy.

Peevey, 64, is married to Carol Liu, a state legislator from the Los Angeles suburb of La Canada Flintridge, just west and north of Pasadena’s famed Rose Bowl. As an executive in labor, environmental-economic coalition building, utility and energy services ventures, Peevey has been a regular participant in the state political and regulatory processes, skills that helped him launch New Energy Ventures in 1995 as one of the nation’s largest and most successful national energy service firms. It was eventually bought out and absorbed into Arlington, VA-based AES Corp. in 1999.

Last winter, in the depth of the state’s electricity crisis, Peevey was one of several unpaid energy advisers to the governor, working with S. David Freeman, now the head of the state power authority, in lining up long-term wholesale power contracts that just recently the state asked federal regulators to abrogate.

“With more than three decades of experience in the energy and environmental industries and academia, Michael Peevey brings a broad background of knowledge to the CPUC,” said Davis in a written announcement on the appointment. “His insight on the ever-changing electricity market will be invaluable to the commission as it makes decisions about California’s energy future.”

Initially, Peevey’s former employer, Southern California Edison Co., was the only one of the four major private-sector utilities regulated by the CPUC that commented on the appointment, congratulating Peevey and noting the utility “looked forward to working constructively with him and the other commissioners on regulatory issues.”

Davis’s action came less than 24 hours after a coalition of 13 consumer and environmental groups wrote to him, urging that he name someone to the CPUC who has “a demonstrated record” of consumer and environmental achievements, and that the appointee have “proven independence from the financial interests of utilities, marketers and generators.”

Because Peevey has had and maintained many different political, corporate and governmental affiliations, the governor’s announcement noted that the CPUC legal department will help the new commissioner determine conflicts of interest and which affiliations he will have to terminate.

Although it won’t happen this year while he serves the rest of Bilas’ term, observers think if Davis is re-elected and re-appoints Peevey, it is likely that the new commissioner would replace Loretta Lynch as president of the five-member CPUC, which oversees the engine and infrastructure for the state’s and western region’s economies.

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