[Sustain] Excellent Article On CPUC President Peevey Shows Utterly Incestuous Relationship Between PG&E, Peevey, & Governor Brown

Thu Oct 9 00:30:18 PDT 2014

Excellent Article On CPUC President Peevey Shows Utterly Incestuous 
Relationship Between PG&E, Peevey, & Governor Brown's Administration 
(two of the most powerful members of which are former PG&E executives).

http://www.sandiegoreader.com/news/2014/oct/08/citylights1-peevey-yuck

    Could Brown reappoint unpopular Peevey?

By Don Bauder <http://www.sandiegoreader.com/staff/don-bauder/>, Oct. 8, 
2014 <http://www.sandiegoreader.com/news/2014/Oct/08>

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Jerry Brown

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Michael Peevey

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Image by Chris Woo

Peevey is suspected of backing SDG&E in their attempt to make San Diego 
ratepayers pick up the tab.

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Pacific Gas & Electric’s penalties for the 2010 San Bruno pipeline 
explosion were less than suggested.

Shortly after his almost certain reelection in November, Governor Jerry 
Brown must decide whether to reappoint Michael Peevey as president of 
the California Public Utilities Commission. Peevey’s term runs out at 
the end of the year.

In mid-August, Brown voiced strong support for Peevey in an interview 
with editors of the /San Jose Mercury News/. A month earlier, that 
newspaper had editorialized, “If Gov. Jerry Brown persists in backing 
his outrageously unethical appointee [Peevey], he might as well change 
the name to the Pro Utility Commission.” Around the same time, the /San 
Francisco Chronicle/ called for Brown to oust Peevey. The /Modesto Bee/, 
citing Peevey’s “overseas junkets” paid for by utilities, said it was 
time for Peevey to go because he “regards utility company executives as 
peers and partners.”

The Southern California press has also been hard on the commission’s 
president.

Peevey is suspected of pulling strings in such matters as San Diego Gas 
& Electric’s attempt to make ratepayers pick up the tab for uninsured 
expenses of the 2007 fires, caused by the utility. Recently, emails 
between commission and Pacific Gas & Electric officials have shown that 
the company said it didn’t want administrative law judges who would 
recommend tough penalties for the company’s role in the 2010 San Bruno 
pipeline explosion. The commission complied, and the recommended 
penalties were much less than the staff had suggested. Indignant Bay 
Area politicians want the attorney general to investigate the commission 
for its pro-utility behavior.

The governor and Peevey (both in their mid-70s) are old friends, dating 
back to the years in which Peevey was active with organized labor and 
the Democratic Party. After getting two degrees in economics at the 
University of California/Berkeley, he worked for the federal government 
in labor economics and then became chief economist for the American 
Federation of Labor/Congress of Industrial Organizations (AFL-CIO). In 
1984, he joined Southern California Edison. He was a senior vice 
president and chief lobbyist for the company in Sacramento. Edison’s 
chief executive, Howard Allen, himself a former lobbyist, had a fondness 
for executives with political connections.

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John Bryson

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Carl Wood

Peevey shortly became an executive vice president. Another executive 
vice president was John Bryson, who also had political connections. He 
was a former president of the California Public Utilities Commission, a 
graduate of Stanford with a law degree from Yale, and smooth and oily — 
like politicians. “Howard Allen played the two against each other,” says 
Carl Wood, a former commissioner, now director of regulatory affairs for 
the Utility Workers Union of America.

“Peevey is not Bryson’s kind of guy, or the other way around. Bryson is 
Ivy League–looking and educated, suave, friendly, sophisticated. Peevey 
is crude but intelligent,” says a former commission executive. Says a 
former Edison executive, “They were oil and water.”

As executive vice president, Peevey in the late 1980s was put in charge 
of Edison’s attempted hostile takeover of San Diego Gas & Electric. To 
many in San Diego, Peevey did not appear so intelligent in his speeches 
and radio and TV appearances. Edison lost big. San Diegans were 
surprised when, in 1990, Peevey was named president of Southern 
California Edison. He also served as president of the parent, Edison 
International.

But — and it’s a big but — Peevey was /not/ chief executive officer. 
That job went to his foe, Bryson. Peevey lasted less than three years. 
In 1993, barely in his mid-50s, he “retired” from Edison and walked out 
with a bundle of stock and possibly severance pay, too; my sources 
disagree on the latter point. There is agreement on one point, as 
described by a former Edison executive: “He didn’t want to work for 
Bryson,” and Bryson didn’t want Peevey around, either.

Peevey, not permitted to compete with Edison for two years, went with a 
public relations/lobbying firm, then began taking equity interests in 
smaller energy firms. After he raked in a $10 million capital gain from 
selling one firm, he and his wife Carol Liu, now a state senator, lined 
up a kinky tax shelter. He was told he would pay almost no taxes using 
the scheme but would pay $3.5 million if he played it straight. The 
government went after the tax shelter — and Peevey and his wife took the 
accounting firm to court for giving them bad advice.

Peevey championed competition in the energy business. Unabashedly, he 
favored deregulation, although he said it had to be tweaked in 
California. He told others that he had made a bundle of money trading 
energy contracts.

Oh, yes. He also had stock in Enron, the corporate hoax that fleeced 
California in the 2000–2001 energy crisis before collapsing. Peevey 
dumped his Enron stock.

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Loretta Lynch

Despite these black marks against him, in March of 2002, Peevey was 
named a commissioner of the California Public Utilities Commission. 
Consumer groups howled that a former Edison president and deregulation 
yahoo would be named to the commission. At the time, Loretta Lynch was 
president of the commission and was tough on the utilities and a 
champion of re-regulation. Carl Wood, then a commissioner, was her 
steady ally in demanding responsibility of the utilities. “We were 
unpopular with big business, which had a venomous hatred for Lynch,” 
recalls Wood. “To mollify the corporations,” then-governor Gray Davis 
named Peevey as president of the commission at the end of 2002, even 
though he had been there only about eight months. Pro-consumer groups 
howled again.

Peevey’s supporters pointed to his longtime association with labor 
unions. Insiders knew better. “The only time Peevey is pro-labor is…when 
he is using labor to maximize revenue for the utilities,” says a former 
commission official. “He is a corporate liberal. He is not responsive to 
consumer interests,” says Wood.

Brown and Peevey are buddies “because Peevey does what Brown tells him 
to do,” says Lynch. “Peevey has always been close to PG&E and [Southern 
California Edison]. So has Brown.”

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Nancy McFadden

Indeed, Brown’s executive secretary is Nancy McFadden, who joined the 
governor after serving as senior vice president to the chief executive 
officer of Pacific Gas & Electric. In essence, she is Brown’s chief of 
staff without the title.

In 2011, Brown hired Dana Williamson, Pacific Gas & Electric’s director 
of public affairs, as senior advisor for cabinet and external affairs. 
Two years later, she was named cabinet secretary — the person to whom 
other agency secretaries report. It’s often considered the 
second-most-powerful post in the gubernatorial administration.

When Lynch was deposed, Peevey threw a party, to which he invited 
utility executives. Lynch wasn’t invited.

Asked what another Peevey term as head of the California Public 
Utilities Commission would be like, Lynch had one word:

“Yuck.”

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