Californians have long understood the need for accountability and transparency in their state government. That is why, 40 years ago, voters approved the Political Reform Act, which established conflict-of-interest rules for elected officials and political candidates. That same year, the Legislature enacted similar rules for appointees to the California Energy Commission. These rules are vital to ensuring the fairness of our legislative and political process.
One provision of the energy commission rules prohibits any person from serving as a member if that person has worked for an electric utility in the previous two years. As the state’s primary body for energy policy, research and approval of large power plants, the CEC must maintain independence so it can make the best decisions for all Californians. And because utilities have a lot to gain or lose from CEC decisions, there must be a wall between them and the commission.
These rules worked great in the days when most of the state was served by investor-owned utilities that owned the power plants that generated the electricity we use. But when California deregulated the energy industry in the 1990s, new electricity providers, called independent power producers, became the owners of the power plants, as well as gas, wind, solar and geothermal plants, which were not covered by the old rules. This means that a person who has recently worked for one of these independent power producers with business before the CEC can be nominated by the governor to serve on the commission, simply because that producer is not a utility.
This is clearly a conflict of interest. That is why I have authored Assembly Bill 2661, which updates the conflict-of-interest code with what the energy market actually looks like today. My bill would extend the two-year ban to cover employees of independent power producers as well as utilities. It is a fair and reasonable prohibition that protects the integrity of the CEC’s work on behalf of the state.