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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).<br>
<br>
<a class="moz-txt-link-freetext"
href="http://www.sandiegoreader.com/news/2014/oct/08/citylights1-peevey-yuck">http://www.sandiegoreader.com/news/2014/oct/08/citylights1-peevey-yuck</a><br>
<h2 class="header" itemprop="headline">Could Brown reappoint
unpopular Peevey?</h2>
By <span itemprop="author" itemscope=""
itemtype="http://schema.org/Person"><span itemprop="name"><a
href="http://www.sandiegoreader.com/staff/don-bauder/"
itemprop="url" rel="author">Don Bauder</a></span></span>, <a
href="http://www.sandiegoreader.com/news/2014/Oct/08">Oct. 8, 2014</a>
<div class="story_body" id="target-story_body_template">
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_Edmund_G_Brown_Jr_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Jerry Brown"> <img
class="photo"
src="cid:part4.03030605.01000506@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">Jerry Brown</p>
</div>
</div>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_MichaelPeevey_lg_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Michael Peevey"> <img
class="photo"
src="cid:part6.09010600.08080802@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">Michael Peevey</p>
</div>
</div>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_car_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Peevey is suspected of
backing SDG&E in their attempt to make San Diego
ratepayers pick up the tab. - Image by Chris Woo"> <img
class="photo"
src="cid:part8.09090800.09040305@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="byline"> Image by Chris Woo </p>
<p class="caption">Peevey is suspected of backing SDG&E in
their attempt to make San Diego ratepayers pick up the tab.</p>
</div>
</div>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_Pipe-from-Sanbruno-explosion_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Pacific Gas &
Electric’s penalties for the 2010 San Bruno pipeline
explosion were less than suggested."> <img class="photo"
src="cid:part10.01090601.09030004@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">Pacific Gas & Electric’s penalties for
the 2010 San Bruno pipeline explosion were less than
suggested.</p>
</div>
</div>
<p id="h579821-p1" class="permalinkable">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.</p>
<p id="h579821-p2" class="permalinkable">In mid-August, Brown
voiced strong support for Peevey in an interview with editors of
the <em>San Jose Mercury News</em>. 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 <em>San Francisco Chronicle</em> called for
Brown to oust Peevey. The <em>Modesto Bee</em>, 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.” </p>
<p id="h579821-p3" class="permalinkable">The Southern California
press has also been hard on the commission’s president.</p>
<p id="h579821-p4" class="permalinkable">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.</p>
<p id="h579821-p5" class="permalinkable">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.</p>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_John_Bryson_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="John Bryson"> <img
class="photo"
src="cid:part12.00070607.02070003@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">John Bryson</p>
</div>
</div>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_carl-wood_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Carl Wood"> <img
class="photo"
src="cid:part14.09030108.02000709@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">Carl Wood</p>
</div>
</div>
<p id="h579821-p6" class="permalinkable">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.</p>
<p id="h579821-p7" class="permalinkable">“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.”</p>
<p id="h579821-p8" class="permalinkable">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.</p>
<p id="h579821-p9" class="permalinkable">But — and it’s a big but
— Peevey was <em>not</em> 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.</p>
<p id="h579821-p10" class="permalinkable">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.</p>
<p id="h579821-p11" class="permalinkable">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.</p>
<p id="h579821-p12" class="permalinkable">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.</p>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_Loretta-Lynch_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Loretta Lynch"> <img
class="photo"
src="cid:part16.06060205.08080305@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">Loretta Lynch</p>
</div>
</div>
<p id="h579821-p13" class="permalinkable">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.</p>
<p id="h579821-p14" class="permalinkable">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.</p>
<p id="h579821-p15" class="permalinkable">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.”</p>
<div class="inline inline_photo inline-left ">
<p class="thumbnail"> <a
href="http://media.sdreader.com/img/photos/2014/10/07/citylights_nancy-mcfadden_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d"
rel="group" class="lightbox" title="Nancy McFadden"> <img
class="photo"
src="cid:part18.06050803.04030807@earthlink.net" alt=""> </a>
</p>
<div class="photo_meta">
<p class="caption">Nancy McFadden</p>
</div>
</div>
<p id="h579821-p16" class="permalinkable">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.</p>
<p id="h579821-p17" class="permalinkable">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.</p>
<p id="h579821-p18" class="permalinkable">When Lynch was deposed,
Peevey threw a party, to which he invited utility executives.
Lynch wasn’t invited.</p>
<p id="h579821-p19" class="permalinkable">Asked what another
Peevey term as head of the California Public Utilities
Commission would be like, Lynch had one word: </p>
<p id="h579821-p20" class="permalinkable">“Yuck.”</p>
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