Soapbox

California must complete its reform of utilities panel

Advocates rally in front of the Capitol on Aug. 3 to urge Gov. Jerry Brown to permanently close the Aliso Canyon gas storage facility in Los Angeles.
Advocates rally in front of the Capitol on Aug. 3 to urge Gov. Jerry Brown to permanently close the Aliso Canyon gas storage facility in Los Angeles. The Associated Press

Here are some things that happened about a century ago: the sinking of the Lusitania, Babe Ruth’s first home run and the creation of the California Public Utilities Commission. That fact alone ought to lead us to wonder if it’s time to redefine the PUC’s role.

Fortunately, legislative leaders and Gov. Jerry Brown announced such a plan earlier this summer. But only a few of the bills addressing the reform agreement reached the governor for signature.

One significant measure that didn’t make it before the Legislature adjourned was Assembly Bill 2903, which would have created an ombudsman, expanded public disclosure rules and transferred oversight over some rules on transportation companies.

For too long, the PUC has tried to be everything to everyone, and ended up getting far too little done. Recent disasters, including derailments, a radiation leak, a 2010 gas explosion, and the well-publicized Porter Ranch gas leak – not to mention the response to the ongoing drought – have made it clear that the commission is spread too thin.

That’s not to question the PUC’s basic competence. But it does mean that the agency has taken on an ever-wider range of duties over the decades, often stepping up for no better reason than the failure of other state agencies to pitch in.

It’s time to put an end to this taxing regulatory creep and focus the PUC’s efforts on ensuring public safety and regulating core utilities such as power, water and natural gas.

The Legislature passed six reform bills last session, but all were vetoed by Brown. This session, the Assembly approved a proposal calling for the PUC to be dismantled. That led to the historic agreement to conduct a study to address the agency’s appropriate role. It’s only one step in the right direction, but a very important one to get PUC reform right.

Why does this matter? Because the PUC oversees services that touch virtually every California family and business. Californians need common-sense supervision of essential services, but the commission struggles to do so because it unnecessarily regulates other industries, taxing its resources.

For example, the PUC devotes a substantial amount of time to micromanaging the sharing economy, which could readily be addressed by specific legislation or federal standards.

Also, competitive telecom services are already regulated by the Federal Communications Commission and federal law and by market forces that are improving services while driving prices down.

Even some commission leaders admit publicly that the PUC wears too many hats. But the list of services they propose to control continues to grow.

Under the Assembly-approved plan, legislators would reassign some or all of the PUC’s duties to other departments that are better suited. There’s a difference between abrogating the state’s responsibilities and bringing the state’s regulatory policies into the 21st century.

There will never be a better opportunity to get the PUC on the right track.

Ev Ehrlich, undersecretary of commerce for President Bill Clinton, is president of ESC Company, an economic consulting firm in Washington, D.C. He can be contacted at Ehrlich@evehrlich.net.

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