Guest Op-Ed: What California Needs from the New CPUC President

December 16, 2014

Daily Journal
Guest Op-Ed
By Jerry Hill

The California Public Utilities Commission is a vital state agency, overseeing electrical, gas, telecommunications, water and transportation industries that together collect $50 billion in revenue from Californians each year.

With the current PUC president stepping down this week after 12 years in office, we have a historic opportunity to restore the capabilities of the agency and win back public trust.

On Dec. 8, I sent Gov. Jerry Brown a letter outlining what I believe are the most important actions that his next pick for PUC president must do.

With the recent PUC ethics scandals, serious issues raised by several audits that the commission must address, and the resultant low morale among commission staff, the job has never been more challenging or important.

In my letter I suggested that the new commission president must:

1). Lead the people of the commission. The need for leadership of the commission’s more than 1,000 employees has never been more evident. In 2013, an internal report highlighted commission staff’s concerns with management’s commitment to safety. Later that year, the Legal Division revolted openly after the general counsel removed all the attorneys from the San Bruno penalty case for failing to endorse a position that favored Pacific Gas and Electric. The ratepayer advocate’s unit even attempted to secede from the agency. This October, after emails surfaced disclosing dubious behavior by commissioners and top staff, employees at an all-hands meeting expressed their disappointment with leadership and questioned its ability to conduct an unbiased review of the commission’s ethical problems.

I believe John W. Gardner, in his book “On Leadership,” gave us a powerful lesson, clarifying that “executives are given subordinates; they have to earn followers.”

2). Hold management accountable, and encourage his fellow commissioners to do so as well. Commissioner Ferron, speaking at his last commission meeting a year ago, highlighted what he called a “serious governance problem,” stating that commissioners “do not have any effective means to provide guidance and oversight to the CPUC’s permanent management and staff.”

We now have a commission whose operational failures have constrained its ability to advance the policy direction that the governor and the Legislature have entrusted to it. The gross mismanagement of public funds revealed in recent audits had been predicted by a number of earlier ones. The next commission president must set expectations for operational performance improvement and hold management staff accountable for meeting those expectations. As the commission has a large set of responsibilities, the new president must enlist the support of the four other commissioners in management oversight.

3). Know the difference between a conference and a junket. A commissioner must have the perspective to see the line between an open mindset and a cozy relationship — and must have the self-confidence to draw that line before a utility is tempted to test it. This applies even more so to the president, as other commissioners defer to him or her as the governor’s designated leader.

A fundamental difference exists between a conference to exchange ideas and a “conference” that is merely a junket designed for interests to influence decision makers. One can draw the distinction quite easily: A conference is open to the public, whereas a junket is invitation-only. These events are not only exclusive of the public but exclusive of subject matter experts on commission staff. The next president needs to set a clear example to his or her colleagues and to staff that, where inequity of access exists between utilities and the public, so does ethical hazard.

4). Remember that the “P” in PUC stands for “Public.” The commission has made obtaining public records extremely difficult. The city of San Bruno spent a year and a half and a small fortune in legal fees to extract from the commission email communications between commission staff and PG&E, and the city could only obtain these records after settlement in Superior Court. The commission has held invitation-only “stakeholder meetings” at which all five commissioners are present — a practice that subverts the intent of open meeting laws, if not the letter of the law.

The president bears leadership responsibility and holds the commission accountable. The president ultimately decides whether the state’s future will be decided in the light of day, or in the dark corner of a restaurant over a couple bottles of good pinot.

The commission’s greatest resource is a corps of talented staff dedicated to the mission of ensuring safe, reliable service to Californians at reasonable rates with an eye to providing our grandchildren with a healthier environment than was given to them. With an effective leader at the head of the commission, I believe the organization will overcome its challenges and accomplish these goals.

Jerry Hill represents the 13th district in the California Senate. The 13th Senate District includes the cities of Atherton, Belmont, Brisbane, Burlingame, East Palo Alto, Foster City, Half Moon Bay, Hillsborough, Los Altos, Los Altos Hills, Menlo Park, Millbrae, Mountain View, Pacifica, Palo Alto, Portola Valley, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, Sunnyvale, Woodside and parts of unincorporated San Mateo County and unincorporated Santa Clara County. He lives in San Mateo.