CA PUC Commissioner Quits, Farewell Letter Challenges Utilities, Questions Role of Agency Staff

California Public Utility Commission (CAPUC) Commissioner Mark Ferron resigned due to health reasons, and sent a public “Final Report” to his fellow Commissioners and the public on January 18, 2014.  In this remarkable document, he questions the legal strategy of utilities to do only the minimum required by law and regulation, stating

‘I am very worried about our utilities’ commitment to their side of the regulatory compact. We at the Commission need to watch our utilities’ management and their legal and compliance advisors very, very carefully: it is clear to me that the legalistic, confrontational approach to regulation is alive and well. Their strategy is often: “we will give the Commission only what they explicitly order us to give them”. This is cat and mouse, not partnership, so we have to be one smart and aggressive cat.

Regarding the resources of the CAPUC as a regulator, and its organizational functioning, he said

we are hopelessly out-gunned in terms of the resources necessary for our mission – in particular, our audit and finance functions have been woefully inadequate and we face a demographic time-bomb, with our younger talent leaving for private industry and our most experienced staff on the verge of retirement.

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we also have a serious governance problem at the heart of the Commission: 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.

We wonder if the problems identified by this member of a major regulatory commission are unique to CAPUC.

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