Bill to Curb PUC Conflicts-of-Interest Killed

ASSEMBLY COMMITTEE KILLS MEASURE ESTABLISHING REVOLVING DOOR & CONFLICT OF INTEREST STANDARDS FOR PUBLIC UTILITIES COMMISSION MEMBERS

A measure by Senator Debra Bowen (D-Redondo Beach) to establish rigorous revolving door and conflict of interest standards for members of the Public Utilities Commission (PUC) was killed late Tuesday in the Assembly Elections & Redistricting Committee on a 3-3 vote.

PUC commissioners wield enormous power over the rates we pay for power, for phone service, for water, and much more,” said Bowen. “The notion that commissioners should be allowed to buy stock in companies they regulate or can set themselves up for a job with one of the very same companies that appear before them at the commission when they leave office is pretty outrageous.”

Under current law, PUC commissioners can’t have a financial interest in an entity regulated by the Commission while they’re in office. PUC commissioners are required to be removed from office if they involuntarily acquire a financial interest in a company they regulate, but a commissioner doesn’t have to be removed from office if they voluntarily acquire a financial interest in a company they regulate.

We boot people from the PUC if they inherit stock in a company that’s regulated by the PUC and don’t get rid of it in a reasonable period of time, yet those same commissioners are free to go out and buy stock in a PUC-regulated company without fear of losing their jobs,” continued Bowen. “I can’t imagine for the life of me why the committee thinks keeping that loophole open is good for the 35 million Californians who have to rely on the PUC to protect them from getting ripped off by power, water, and telephone companies.”

SB 204 would have closed that loophole and mirrored the conflict of interest laws and revolving door prohibitions for PUC members that members of the California Energy Commission (CEC) have been subject to since 1975. Specifically, the bill would have:

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  Required a PUC commissioner to be removed from office if they voluntarily acquire a financial interest in a company the commissioner knows or should know is regulated by the PUC.
  
  
• Closed the “revolving door” by preventing anyone from being appointed to the PUC if during the two years prior to their appointment, they received a substantial portion of their income from an entity subject to regulation by the PUC and from going to work for an entity subject to regulation by the PUC for two years after leaving the PUC.
  
  
• Prevented any member or employee of the PUC from taking part in a commission matter or decision in which their spouse, child, or partner has a direct or indirect financial interest.
  
  

The goal was to try to make sure decisions made by PUC commissioners aren’t influenced by positions they may have held before coming to the Commission and, more importantly, by the jobs they may be looking to take when their term on the Commission expires,” concluded Bowen.

SB 204 is similar to a section of AB 2006 (Nunez), a comprehensive energy reform bill that was approved by the Legislature in 2004, but it was vetoed by Governor Arnold Schwarzenegger.

The bill was supported by the California Public Interest Research Group (Cal-PIRG), The Utility Consumers Action Network (UCAN), the California Alliance for Consumer Protection, and the Foundation for Taxpayer and Consumer Rights. It was opposed by the Public Utilities Commission and the California Chamber of Commerce.