EXCLUSIVE: Sacramento and San Bruno CA: Senator Hill Letter to Governor part 1 of 2

San Bruno Patch obtained a copy of Senator Hill’s letter (below) to Governor Brown about expectations for the next PUC president.

Tomorrow morning, Thursday, December 18, PUC President Peevey will attend his last voting meeting as commission president.

This letter is being published in two parts – this is part one.

December 8, 2014

The Honorable Edmund G. Brown

Governor of the State of California

State Capitol Building

Sacramento, CA 95814

Subject: Designation of a New California Public Utilities Commission President

Dear Governor Brown:

For the first time in more than a decade, the California Public Utilities Commission will have a new president. With the recent 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.

I will not advise you whom to choose as a president. Your last four years in office have been marked by the appointment of talented individuals of diverse background and experience, both at the Commission and throughout state government. I won’t admonish you to select someone with experience and enthusiasm. All of your appointees to the Commission have both impressive resumes and great passion for their work. Your five choices have all demonstrated a commitment to conduct the Commission’s business in the public’s interest, true even of those who have stumbled along the way.

I would, however, like to convey four expectations for the new president. From my position representing the people of San Bruno for a number of difficult years, I believe a Commission president’s actions must be consistent with these expectations if the Commission is to return to a healthy, functioning agency.

The new Commission president must:

1. Lead the people of the Commission

The Commission is an organization that comprises over one thousand employees, all of whom—with the exception of those in the Office of Ratepayer Advocates—answer to the Commission president.

Recent events illustrate the serious need for effective leadership at the Commission. In early 2013, a leaked 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 of the attorneys from the San Bruno penalty case for failing to endorse a position they felt was unethical and illegal. The Division of Ratepayer advocates even attempted to secede from the agency. In October, after emails surfaced disclosing dubious behavior by Commissioners and top staff, staff 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.

When I speak of leadership, I do not use the term casually. The state would be blessed to have as Commissioners leaders in energy policy, leaders in telecommunications policy, or leaders in any of the disparate policy areas under Commission purview. For a Commission president, however, leadership in policy is a luxury; leadership of the career public servants at the Commission is the imperative. Leadership of the Commission cannot be obtained by outsourcing Commission functions to regulated utilities as had been done when PG&E was given responsibility to setting up the Commission’s 2013 “safety symposium.” Such action undermines staff who have chosen public service as a vocation.

I believe that 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, in his farewell address, highlighted what he called a “serious governance problem,” stating that “we Commissioners rightly are held responsible for what happens in this building and yet we do not have any effective means to provide guidance and oversight to the CPUC’s permanent management and staff.” He had recommended subcommittees—such as Audit, Budget, External Relations, and Safety—that exist in corporate boards, and he urged his fellow Commissioners to act on this suggestion after he left. The Commission has not.

This Commission has been the subject of repeated audits—perhaps more than any other state agency. The gross mismanagement of public funds that was found in the most recent audits had been predicted by a number of earlier ones. The State Auditor had to deconstruct the investigation process of the Commission’s transportation enforcement branch through induction as none existed at the Commission. Backlogs in transportation licensing and gas and electric safety investigations had gone unnoticed and uncorrected for years.

We now have a Commission whose operational failures have constrained its ability to advance the policy direction that you and the Legislature have entrusted it. 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.

Part two of two of this letter is published in the follow-up article here.

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Robert Riechel

Photo Credit: San Bruno Patch Archives

Source Credit: California State Senator Jerry Hill

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