State PUC seems to regulate everything. What’s next?
Don’t be surprised if the California Public Utilities Commission is put in charge of making the Oakland Raiders winners or managing Kanye West’s award show appearances.
After all, the PUC already has responsibility for almost every other difficult California problem.
Are we asking too much of the PUC? Perhaps, but this is the way things are in a state whose leaders routinely dodge the most complicated challenges. The PUC is full of technically proficient people, from engineers to scientists to judges, who are accustomed to getting blamed when they can’t resolve the impossible problems we send their way.
California leaders’ preference for the PUC as solvent for bureaucratic clogs was the subtext of the recent debate over wildfire legislation. While media and politicians debated whether the new law was a bailout for utilities, the legislation’s details were all about giving the PUC the thankless job of inventing complicated new rules around prevention and costs of wildfires.
Such transfers of responsibility to the PUC are justified by politicians’ lack of technical expertise. But there are other reasons. Companies, particularly in telecommunications, prefer to be regulated by one statewide entity rather than by California’s myriad local governments. And politicians appreciate how the commission, by taking on hard questions, absorbs criticism that might otherwise be directed at elected officials.
As a result, the commission, its five members appointed by the governor, has become the most powerful regulatory entity in a regulation-mad state. It has grown into a decentralized agency with 1,300 employee positions and more divisions than the Marines and Major League Baseball combined.
And it’s becoming even more powerful, since its responsibilities — telecommunications, electricity, gas, water, passenger transport, rail safety — overlap with the two greatest forces altering California life: the digitalization of everything, and climate change.
While the reach of today’s PUC is new, the commission has been central to California since it was established by the voters in the same 1911 election that introduced other Progressive reforms, including the ballot initiative. The commission was conceived as a check on the power of the railroads. But it only took a few years to expand its authority to natural gas, electricity, telephones, water, cars and trucks.
In the postwar era, the PUC extended its power to communications industries, and in recent decades it has become a protector of consumers and of public safety — especially after the deadly 2010 explosion of a PG&E gas pipeline in San Bruno.
The PUC has long faced criticism about favoring the utilities it regulates. Earlier this decade, a public scandal erupted when federal and state investigations showed inappropriately close communication between thenpuc President Michael Peevey and PG&E.
But even as California leaders urged reform for the PUC, they kept adding to its duties. After last year’s mega-fires, the response in Sacramento was to house a new wildfire safety division at the PUC, at least temporarily.
Running this commission, one assemblyman has said, is like “managing a lion.” That’s an understatement. When PUC President Michael Picker, widely praised for restoring commission credibility, recently announced his retirement, the San Francisco Chronicle asked if he had enjoyed the work. Picker replied: “It’s the most frustrating job I’ve ever had. Not the worst — I worked for a meat packer picking up dead cows once.”
He will soon be replaced by Marybel Batjer, who handled thorny problems for Jerry Brown and Arnold Schwarzenegger. But this new gig will be harder. With a six-year term, Batjer will soon be overseeing a PUC that will keep doing even more as it tries to keep up with Silicon Valley’s many inventions.
Figuring out how to better regulate a regulator that regulates almost everything is the supernova of problems. But if you asked the Legislature to take on such reforms, they’d just assign the task to the PUC itself.