Dive Brief:
- An new report ordered by regulators after back channel negotiations were revealed between California regulators and utility executives recommends banning ex parte meetings in rate cases, the San Francisco Chronicle reports.
- The California Public Utilities Commission (CPUC) brought on Los Angeles-based law firm Strumwasser & Woocher to complete the review, assessing policies that allow solo meetings between regulators and executives as long as other parties are informed in advance.
- Last year the CPUC fined Pacific Gas & Electric Co. just more than $1 million after emails showed the utility attempting to negotiate with commissoners for a favorable judge to be assigned to its rate case.
Dive Insight:
The fallout from last year's judge-shopping scandal between PG&E and regulators could wind up leading to rule changes aimed at protecting consumers. The law firm hired to review the CPUC's practices found the ex parte meetings are "frequent, pervasive, and at least sometimes outcome-determinative," according to the Chronicle's report.
The report laid some blame on the complexity of rate cases, noting that a synopsis of what was said at a meeting may not suffice to inform all parties, thus creating an opportunity that utility lobbyists can exploit.
PG&E wound up firing three executives in the wake of last year's scandal, and then-commission President Michael Peevey asked his chief of staff to resign by mutual agreement. Peevey did not seek reappointment when his term ended and has been reportedly difficult to reach since stepping down. Earlier this year the LA Times reported Peevey improperly negotiated a contract forcing San Diego Gas & Electric Co. to purchase $700 million in powe.
The report recommended banning ex parte communications in rate cases, finding that meetings without all parties present “systematically favor the interests of utilities and other well-funded parties.”