Dan Morain

A shakedown by any other name

Michael Peevey is former president of the California Public Utilities Commission.
Michael Peevey is former president of the California Public Utilities Commission.

Michael Peevey is no Ron Calderon.

Peevey never would think to take $3,000 in cash to cover some kid’s tuition payment, as the feds say former state Sen. Calderon did. Nor would he ask a supposed studio executive, who turned out to be an undercover FBI agent, to hire a relative.

And he never would accept some quid for a public policy quo. Peevey isn’t some two-bit politician who shakes down businessmen in exchange for votes. He’s much more refined and operates on a much higher level, for the good of us all.

In December, when Peevey stepped down as president of the California Public Utilities Commission after serving 12 years under three governors, environmentalists lauded him for his great public service. Gov. Jerry Brown still praises his old friend, despite the unpleasantness of the investigations into his conduct.

This past week, Southern California Edison filed documents with the Public Utilities Commission detailing how Peevey tried to persuade Southern California Edison and San Diego Gas & Electric to donate $25 million to fund the California Center for Sustainable Communities at UCLA. If I didn’t know better, I could have concluded Peevey was a bully, maybe even an extortionist.

Yes, Peevey seemed to tie the “donation” to a pending commission decision about how to apportion the $4.8 billion cost of shuttering the San Onofre nuclear power plant, which had been leaking radiation. But clearly, he had society’s best interest at heart.

The California Center for Sustainable Communities promised to use the money to reduce greenhouse gas emissions, a noble goal, especially because San Onofre, like all nukes, produced no greenhouse gas, unlike the natural gas-fired plants that have replaced it. That’s the kind of guy Peevey is, always on the lookout for the environment.

There was the time in 2010, when he told a PG&E executive over a dinner that included two bottles of fine pinot that the utility he regulated needed to donate “at least $1 million” to defeat Proposition 23, an initiative that would have gutted California’s law to reduce greenhouse gases.

“I asked for clarification and he said ‘at least’ doesn’t mean $1 million, it means a lot more,” the executive, Brian Cherry, wrote in a May 2010 email to his bosses. PG&E got diverted by the natural gas explosion that killed eight people in San Bruno and gave $500,000 to defeat the initiative.

No one would mistake Peevey for Calderon. U.S. Attorney Andre Birotte Jr. of Los Angeles alleged last year that Calderon “took the bribes in return for official acts.” That’s crass. In its filing last week, Edison cited “multiple occasions” in which Peevey “demanded that SCE make a charitable contribution to UCLA for greenhouse gas research.”

In 2012, before he was indicted, Calderon traveled to a Vegas nightclub to see rapper Nelly, courtesy of an FBI agent he thought was a studio executive. That’s hardly Peevey’s style. In March 2013, he jetted to Warsaw, Poland, where he stayed at the Hotel Bristol. The FBI didn’t pay for the trip. The industry-funded California Foundation on the Environment and Economy paid for the “study tour.”

Calderon, not the brightest of politicians, texted photos of himself from Vegas to the FBI agent he thought was a studio exec. Peevey, who is the smartest guy in any room, confiscated notes taken by an Edison executive in Warsaw in which he urged the utility to fund greenhouse gas research. California Department of Justice investigators found the notes in a search of Peevey’s home or office.

By 2014, Peevey was focused on the $25 million donation to UCLA. On May 2, for example, Peevey told Ron Litzinger, then Southern California Edison’s president, that he was pleased with terms of the San Onofre settlement, in which ratepayers would cover $3.3 billion of the cost of shutting San Onofre, and utilities would pay $1.4 billion. But Peevey said the settlement “was missing a provision about greenhouse gas research,” and asked Edison to “make a voluntary contribution.”

On May 28, Mike Hoover, Edison’s director of energy regulation, summarized a meeting with Peevey in an email: “He does not understand why we will not fund the UC data analysis program. He wanted me to pass along that SONGS (San Onofre) is on a ‘tight schedule’ and he would hate to see that ‘slip.’”

Accidents do happen, and no one would actually want to cause a $4.8 billion settlement to “slip.” Would they? Of course not. That would be wrong. Hoover backtracked in a subsequent email, saying Peevey “in no way linked SONGS with funding for UCLA.”

On June 5, 2014, Peevey brought up the donation again with Litzinger and “demanded to meet” with Edison International’s chief executive, Theodore Craver. On June 11, 2014, Peevey told Hoover to deliver to Litzinger a note from Peevey and letters from Los Angeles Mayor Eric Garcetti and then Los Angeles County Supervisor Zev Yaroslavsky urging Edison to fund the center. On June 17, and again June 18 and again on June 20, Peevey brought up the donation, again and again and again.

Initially, the settlement did not include money for greenhouse gas research. But it was amended in September, and the $25 million “donation” inserted. The utilities since have met with University of California officials to figure out how to spend it. Whether any of it will go to UCLA remains to be determined. Peevey, meanwhile, was invited to sit on an advisory board at UCLA. But then news of the investigations surfaced last year, and he never took the position.

None of this is to suggest the California Public Utilities Commission under Peevey was part of a sleazy kleptocracy in which officials demanded tribute in exchange for favorable action. Far from it. Clearly, Peevey thought the strong-arm means were justified by the purest of environmentalist ends. It doesn’t make it right.

Follow Dan Morain on Twitter @danielmorain.

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