California's Public Utility Commission and the AZ Corporation Commission -- Compare and Contrast

A couple of days ago, a San Francisco Chronicle story, Report blasts secret talks between utilities, CPUC looked like déjà vu all over again, from where we sit in Arizona. It begins,

The ability of Pacific Gas and Electric Co. and other utilities to engage in back-channel talks with top California Public Utilities Commission officials unfairly skews decisions in favor of big-money interests, and the practice should be banned in rate cases, a review requested by the state agency concluded Monday.

Such back-door communications became notorious last year when e-mails showed that a PG&E executive had engaged in a secret campaign to obtain a preferred judge in a $1.3 billion rate-setting case before the utilities commission. Those and other back-channel contacts — known as ex parte communications — are the focus of federal and state criminal investigations into whether commission officials violated influence-peddling or other laws. 

In the aftermath of the judge-shopping revelations, the utilities commission hired the Strumwasser & Woocher law firm of Los Angeles to review its practice of allowing commissioners and their aides to meet with utility executives in rate-setting cases without other parties, such as customer advocacy groups, being present. Currently, rules require that the commission notify all parties of such solo talks three days in advance and that utilities submit a report on what was said.

PG&E, an infamous IOU (investor-owned utility), apparently was not sufficiently humbled in the wake of Erin Brockovich and her successful advocacy for victims of that utility's dumping of toxic waste. Anyway, decision makers over at PG&E seem to have thought they could get away with secret negotiations involving who knows what inducements to the CPUC officials to set rates not necessarily in the best interest of ratepayers.

Sound familiar? Here's what the California regulatory agency says about itself,

The CPUC regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation companies. The CPUC serves the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement and a healthy California economy.

Yeah, well maybe. BUT, here's where the CPUC differs in practice with the Arizona Corporation Commission. The ACC hired an aggressive local attorney (David Cantelme) with known political leanings favorable to plutocratic Republican elected officials. In contrast, the CPUC hired a law firm to evaluate the commission's practice and then perhaps take action to demonstrate it takes the interests of utility customers and California citizens seriously. Another excerpt from the SFChronicle story,

The law firm’s report, the product of 88 interviews of current and past commission officials, concludes that such “communications are a frequent, pervasive, and at least sometimes outcome-determinative” in rate-setting cases. 

The complexity of regulatory cases, the lawyers found, often means that checking on what is said during such meetings is difficult at best. The void allows utility lobbyists to exploit their personal relationships with decision-makers, the authors concluded, “sometimes overtly with ‘you know me’ and ‘you know you can trust me’ assurances, sometimes implicitly after years cultivating personal relationships.”

The lawyers said they had received “disturbing reports” that top commission officials went so far as to “assist parties by telling them what to do or say in aid of their cases in communications that were undisclosed, in reliance on a claimed loophole in the disclosure rules — a loophole that we have found does not actually exist.”

Say what you will about California being a "socialist" state, but accountability, in this case, is more than just a buzzword. When this problem came up, the CPUC addressed it head-on. In Arizona, the ACC, functioning as a wholly-owned subsidiary of Arizona Public Service, has taken to mimicking cockroaches that scurry for darkness when the kitchen light gets turned on in the middle of the night.

By the way, the ACC also last Friday, according to the Yellow Sheet Report (6/22), fired its long-time public information officer, Rebecca Wilder. Dare I speculate that her replacement will fit with Cantelme's attack dog demeanor?

More from the SFChronicle,

The [report] authors concluded that such back-channel contacts have the “unavoidable effect of moving actual governmental decision-making out of the public eye” and “are fundamentally unfair to the parties, who are not adequately informed” in time to do anything about it before the commission rules on rate-setting requests.

It called for banning such back-channel talks altogether in rate cases, saying the current rules “systematically favor the interests of utilities and other well-funded parties.” 

Legislation has since been introduced in the California legislature to address these concerns. Just what kind of response do you think we can expect from the likes of Andy Biggshot and David "Big Spender on House perks" Gowan to the corporation commission scandal in the making?

Probably nothing more than the sound of crickets.

By the way, have you been wondering why APS worked so diligently last fall to purchase favor from the current Arizona Attorney General, Mark Brnovich? He may have recused himself from investigating Trash Burner Bob Stump, the ACC and APS. But has any Arizona law enforcement agency or officer appeared to be doing ANYTHING about bringing the situation into the light?

I hope the Checks and Balances Project has plenty of stamina.