Senate committee defers vote on short-term PUC commissioner

Thursday July 11, 2002

SACRAMENTO — A Senate committee put off confirmation of the governor’s appointee to the Public Utilities Commission Wednesday because Michael Peevey’s term ends at the end of this year. 

Peevey, a former Edison International and Southern California Edison executive, was appointed in March to fill the position vacated by Richard Bilas, who had nine months left to serve. 

The state Senate has one year to confirm Gov. Gray Davis’ appointment, and since Peevey’s term runs out in December, Senate Leader John Burton said there was no need for a vote. He said he asked Peevey to testify in order to have his positions on energy issues on record in case he is reappointed to the commission for a full term. 

The Senate Rules Committee heard Wednesday from business groups that supported Peevey’s appointment and from consumer groups who said the former utility executive is too close to the industry the PUC oversees. 

Peevey said told the committee that he has had a “checkered” work history — from union official to utility president. 

“Some people accuse me of being too close to the utilities, some people accuse me of being too close to other groups,” he said. “I’m on the PUC to try and serve the public interest and I happen to agree that the first charge of the PUC is to serve ratepayers.” 

Peevey’s appointment was applauded by the California Manufacturers and Technology Association and the California Chamber of Commerce. 

But several consumer advocates said they were concerned that Peevey has conflicts of interest that could harm the state’s utility customers. 

Burton was most concerned with Peevey’s position on direct access — the ability of industrial and other large power users to sign up for electricity service from companies other than the utilities. The PUC halted direct access, but is allowing customers who signed up for the alternative service before Sept. 20, 2001, to complete their contracts. 

Those customers could face undetermined exit fees that would pay off some of the debt incurred by utilities who were under retail rate caps that were far less than the soaring wholesale prices last year. 

At Burton’s urging, Peevey said he would push to ensure that utility customers weren’t left paying the bills accrued on behalf of those direct access customers. 

Davis appointees hold four of the five commission seats, which could help Davis promote his energy policies as the state attempts to settle a $10 billion power-buying debt and resolve its flawed attempt at deregulating its electricity market. The remaining GOP-appointed commissioner is Henry Duque. 

Peevey has been chief executive of TruePricing Inc., a technology company focused on helping large companies and government institutions track their energy costs. From 1995 to 2000, he was president of NewEnergy Inc., the nation’s largest energy service provider. He led Edison between 1990 and 1993. 

A legal settlement negotiated in secret by the Davis administration last year helped Edison avoid bankruptcy by maintaining record high electric rate hikes for the next several years and forgoing shareholder dividends. Before the settlement, Davis spent months lobbying the Legislature to buy Edison’s transmission lines to help the utility stay financially stable. 

Peevey also advised Davis during the energy crisis last spring, working without pay to secure long-term energy contracts to stabilize California’s power supply. 

Peevey holds both bachelor’s and master’s degrees in economics from the University of California, Berkeley, and is married to Assemblywoman Carol Liu, D-La Canada Flintridge.