Confidential Document Exposes Serious Problems at CPUC

An internal report obtained exclusively by NBC Bay Area reveals a “safety crisis” inside the California Public Utilities Commission

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A confidential internal report obtained exclusively by the NBC Bay Area Investigative Unit exposes what some call serious problems inside the California Public Utilities Commission. The 24-page report consists of an informal survey of CPUC employees and high-ranking directors and raises significant questions about the agency tasked with regulating the state’s utilities. It includes claims that the CPUC does not make safety a priority and accusations of an overly cozy relationship with regulated utilities.

In the weeks and months following the San Bruno pipeline explosion on Sept. 9, 2010, the public attacked the reputations of Pacific Gas & Electric and the CPUC. Many people are still asking why the explosion happened and why it wasn’t prevented.

In the confidential report, staff reveal opinions that safety is often considered less compelling than other priorities. One quote reads: “If we were enforcing the rules we would not have to worry about a safety culture. If we were holding the utilities accountable and doing what we were supposed to be doing, San Bruno would never have happened.”

The report was compiled by a private consulting firm hired by CPUC commissioners, and included interviews with senior leaders and top-level directors. The informal survey includes sharp criticisms of Executive Director Paul Clanon, with one quote stating: “The executive director’s aversion to conflict discourages PUC staff from taking on tough issues.”

The confidential document says insiders also identified a cozy relationship with regulated utilities—an accusation Clanon denied in an interview with NBC Bay Area in Sept. 2011.

“This is what I have to say to anyone who has that perception—it’s wrong,” Clanon said in the interview.

The informal, high-level internal review also revealed sentiment from employees that the CPUC is in the midst of a cultural crisis when it comes to safety. “Some staff believe that it is the PUC’s failure to thoroughly ‘check the boxes’ and enforce existing regulations that is at the root of the safety crisis,” one respondent said.

The CPUC has denied requests for interviews but instead released this written statement: 

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.

The confidential report is likely to be the foundation for a meeting with lawmakers scheduled for April 17.

If you have a tip about the CPUC, PG&E or anything else for the Investigative Unit email or call 888-996-TIPS (8477).

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