Peevey's Priority: Senate Hearing or Napa Winery?

CPUC president Michael Peevey answers questions from the Investigative Unit after snubbing lawmakers for a conference in wine country

By Tony Kovaleski, Liz Wagner, Jeremy Carroll and Kevin Nious
|  Friday, May 3, 2013  |  Updated 1:55 PM PDT
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In a hidden camera investigation, NBC Bay Area found California Public Utilities Commission president Michael Peevey at a conference in wine country instead of answering tough questions from senators in Sacramento. Chief Investigative Reporter Tony Kovaleski caught up with Peevey in Napa. This story aired on May 2, 2013 at 11 p.m.

In a hidden camera investigation, NBC Bay Area found California Public Utilities Commission president Michael Peevey at a conference in wine country instead of answering tough questions from senators in Sacramento. Chief Investigative Reporter Tony Kovaleski caught up with Peevey in Napa. This story aired on May 2, 2013 at 11 p.m.

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The embattled president of the California Public Utilities Commission recently ignored the call to answer tough questions by state senators in Sacramento and instead decided to attend a conference at an exclusive Napa resort and a reception at an upscale winery in St. Helena, both of which were captured on hidden camera by the NBC Bay Area Investigative Unit.

Michael Peevey was asked to appear before the Senate Budget and Fiscal Review subcommittee on April 25 to justify keeping the job he has held for the past decade. The senate hearing was in response to growing conflict over a confidential report, uncovered by the Investigative Unit, which raises questions about the CPUC’s commitment to safety and its relationship with utility companies the agency regulates.
 
“The governor needs to replace the president of the Public Utilities Commission,” Sen. Jerry Hill said in an interview with NBC Bay Area last month. “The current president has been there for many years and he has had a very cozy relationship with the utilities, which this report indicates.”
 
Hill’s call for change at the CPUC was recently echoed by two lawmakers. 
 
“I think the question is, who should be leading this organization so the people of California are safe,” San Jose assemblywoman Nora Campos said at a recent legislative hearing.
 
At that same hearing Los Altos assemblyman Richard Gordon added, “I have come to the point where we need serious change in the leadership of the PUC to bring change.”
 
After calling for his job two weeks ago, Hill wrote Peevey a letter formally requesting his presence at the subcommittee hearing. The letter states, “For all the shortcomings under your leadership at the CPUC over the last ten years as documented by independent reports… it’s critical that you testify…to justify your continued appointment as the president of the California Public Utilities Commission.”
 
Instead of addressing the conflict, Peevey kept a prior engagement at the Silverado Resort and Spa in the heart of Napa. According to the agenda, the conference was about clean energy, and Peevey was scheduled to give a short five to seven minute presentation for the non-profit organization, California Foundation for the Environment and the Economy (CFEE).
 
Before the conference started, at around 11 a.m.—the same time he was expected in Sacramento—NBC Bay Area’s hidden cameras spotted Peevey mingling with guests in the resort conference center.  The day officially started at noon, with a catered lunch after invited guests such as a representative from Pacific Gas & Electric and, somewhat ironically, more than two dozen Sacramento lawmakers, checked in at the event. Peevey gave his presentation at 1:30 p.m.—two and a half hours after he was scheduled to speak in Sacramento. 
 
After four hours of conference sessions Peevey boarded a luxury bus and drove through the Napa Valley to the next event on the agenda—a reception and dinner at St. Helena’s exclusive Merryvale winery. For more than three hours, Peevey ended his day inside the facility along with more than 100 guests.
 
Following the reception, NBC Bay Area’s Chief Investigative Reporter Tony Kovaleski met Peevey outside the winery to ask questions about his priorities, and the confidential report. Below is a transcript of a part of the conversation:

Tony Kovaleski: You were asked to speak to senators today about the safety of your PUC. Instead you spent your day here in Napa.

Michael Peevey: No, that’s not true.

Kovaleski: What is the message you sent by coming here to Napa instead of going to speak to the senate?

Peevey: You are very antagonistic you know. You are reading a script.

Kovaleski: Sir, I am not reading a script. I want to give you an opportunity to respond.

Peevey: But your questions are the wrong questions.

Kovaleski: You spent time here with the utilities you are paid to regulate.

Peevey: There’s no utilities here that I know of.

Kovaleski: PG&E was here. We saw them on the list.

Peevey: Oh, there may have been one person, I don’t know.

Kovaleski: That report said your agency is too cozy with utilities. Is that true?

Peevey: No. Stop. That’s one person who said that. That’s not what the report said. There was no conclusion in the report. It was an interview with various individual employees of the Public Utilities Commission.

Kovaleski: Sir, you have been asked by lawmakers to step down. Lawmakers have said you should be fired. Should you be fired, sir?

Man with Peevey: No, he shouldn’t be fired. They don’t have the authority.

(Peevey starts to walk away).

Peevey: You poor son of a b****. You have a job to do. It’s pathetic what you are doing. It’s pathetic.

(Peevey gets into a car).

Kovaleski: Sir, should you answer to lawmakers when they ask to speak with you? What’s the message you sent tonight by coming here?

(Car drives away).  

NBC Bay Area asked to speak with Peevey about the confidential report prior to the conference in Napa, but did not receive a response to that request from the CPUC. The CPUC did provide a written statement about the report:

The CPUC has made safety an underlying principle in all its actions. As we work to instill a corporate culture in our regulated utilities that embraces safety as a tool and an enhancement to their mission, we must ensure we do the same at the CPUC. We have hired consultants to help us in our process of culture change across all the industries we regulate. As part of these efforts, our consultants conducted an informal survey of internal employees to see what they think safety means, how they see their role in safety, and how they think we can do better as an agency. The report is the result of the informal survey; it is not an analysis of our safety culture or conclusions by our consultants, but a reporting-back of what some employees said in informal focus groups. As the report says, “This report is not an evaluation of the objective truth of those views and perceptions.”  We will use the results of the report to help us define what we need to change, develop strategies and actions to implement the changes, and ensure accountability as the process continues.
 
This is not the first time Peevey has snubbed lawmakers for an all-expense paid event. He was asked to speak at an assembly committee meeting in 2011, but reports indicate he accepted a free trip to Sweden that was funded by the Swedish government and the California nonprofit, The Energy Coalition. 

When asked by reporters in April about his confidence in the leadership of the CPUC, Gov. Jerry Brown said Peevey is "well-experienced."

"He's flawed like everyone else in this building," Brown said, "but he has a lot of knowledge and he has great commitment."
 
If you have a tip for the Investigative Unit email theunit@nbcbayarea.com or call 888-996-TIPS.

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