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November 1, 2003 Governor
Schwarzenegger Subject: Energy Policy and Honesty in Government Dear Governor-Elect Schwarzenegger, A key player over the years in California’s energy policy has been the state Public Utilities Commission. The PUC initially adopted the (disastrous) deregulation policy which the Legislature then soon enacted into law. By deregulating supply costs while trying to keep a lid on resale (retail) energy prices, this policy (quite predictably) led the energy distributors (utility companies) to bankruptcy and the state’s finances to ruin. Before trusting the CPUC with energy (or any other public) policy issues in your administration, you will need to “clean up” the Commission — from the inside out. Put briefly, there is just far too much corruption (and incompetence) within the PUC management for that organization to serve as part of the solution for California’s future. 1. The majority of PUC managers and supervisory personnel are visibly lacking in professional or managerial qualifications to hold, or carry out the duties of, their positions. Any audit will reveal this immediately. 2.There are several key managers at PUC who have tarnished themselves over the years with what can only be called corruption, discriminatory or otherwise unethical or illegal conduct. Examples of these include (but are not limited to): a. an Executive Director who was found guilty in federal court of illegal discrimination against many of the PUC’s own staff. b. an Assistant Executive Director with a record spanning over 20 years of blatant discrimination, lies, deceptions, and alleged sale of positions or promotions. His ability to effectively lead or even represent the agency or the administration is so compromised that important legislative committee chairpersons and reporters alike refuse to rely on his statements. d. A Personnel Manager with an extensive record for running “rigged” hiring and promotional exams, and for openly discriminating against qualified personnel on illegal grounds. The entire personnel selection process at PUC has broken down to become little more than a “bad joke,” with many highly-qualified people refusing to even apply for jobs there anymore as a result. e. The PUC’s current energy policy is, to put it mildly, ambiguous. Nobody can figure it out -- and certainly nobody can rely on what it might be, or become, over the course of any meaningful investment. This can only continue to drive needed investments away from California, while at the same time the rate-payers are left paying extremely high energy bills with little real consumer protection from the Commission. One commentary about this problem got right to the core of the issue: the PUC has acted throughout to protect itself, its budget, and little else. Energy investors and consumers have both suffered severely under the Commission’s policies. That such a universally- negative result could even be achieved was, frankly, beyond many people’s imaginations. But, there it is. Check out the PUC’s various positions over the course of the PG&E bankruptcy court case and you will see these comments are quite accurate. f. needed consumer protections remain un-adopted. For instance, the terms and conditions for cellular phone service constantly “mess people up” as various (sometimes quite high) exit fees are charged for simply changing plans or carriers for “better deals.” It seems the carriers could be gaining at least as much profit from these hidden fees than they are from providing quality services in the first instance. And meanwhile, the Commissioners issue reports to the Legislature and public claiming that all is well with California’s telephone service. Anybody can see this is not the case, why should we all have to pay a bunch of bureaucrats to misinform us? g. Anybody who visits the Commission’s offices is struck by the almost-universally low employee morale. Talk with the workers and you get a variety of causes: the corrupt personnel practices, the discrimination within the agency, the poor public policies, the “corrupted mangers” and so on. Whatever causes may be the most important, it is painfully clear a wholesale “cleaning out” is needed if the Commission is to ever regain its ability to actually contribute to solving any of California’s serious energy, communications, water, or transportation problems or challenges. Overlook the indicated internal reforms and you will wind up with little more than manure from the PUC. 3.
The Commission has destroyed its credibility by these and other
actions and policies, leaving it institutionally incapable to act
effectively. Either reform the organization or replace it with an
outfit that can function and serve California well. Sincerely
yours, cc: Press, TURN, Legislators
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