Another day, another embarrassment for California Public Utilities Commission President Michael Peevey.
The latest revelation Tuesday from the state Legislative Analyst's Office is that an audit of the PUC's budgeting process found "significant weaknesses." The analyst also uncovered "cases of fiscal mismanagement in which accounting records for certain funds were misrepresented and incorrect."
Why are we not at all surprised?
Under Peevey's leadership, or lack thereof, the PUC has utterly failed at its primary mission of regulating the state's utilities, including PG&E, and ensuring safe, reliable service and prudent use of ratepayer funds. It's a mystery why Gov. Jerry Brown keeps Peevey in this post. The commission's repeated and profound failures undermine trust in state government.
The LAO report says the PUC has been failing to complete basic audits of utilities' special accounts as required by state statutes. This raises the possibility that California ratepayers have been routinely overcharged by utilities.
As the Bay Area News Group's George Avalos first reported, the LAO discovered that at the end of 2012, the accounts in question represented a combined $14.07 trillion, including $8.92 trillion in the balancing accounts the PUC set up for PG&E. He questioned the LAO repeatedly and was assured that was the information the PUC had supplied.
After his report appeared in this newspaper, there were complaints that the PUC's numbers were greatly exaggerated. Further investigation revealed that the PUC had sent bad numbers to the LAO. The LAO has since backed off its estimates, saying it isn't sure what the numbers should be because the required audits haven't been done in decades
If that is not evidence the PUC has not done its job, we don't know what is. The Legislature should tell state auditors to examine the special accounts thoroughly and force the PUC and utilities to account for every dollar.
It is possible that the use of the money may be justified. But the fact that the PUC couldn't clearly demonstrate that to the LAO's satisfaction is an indictment of its processes.
Brown has agreed to provide an extra $200,000 in the next state budget for the PUC to hire additional employees to help get its financial house in order. But it appears outside oversight is what's needed, not more people working for the commission that failed in the first place.
The alternative -- and best -- solution would be appointing new leadership for the PUC itself.
Peevey should have stepped down years ago, after a blue-ribbon panel investigating the San Bruno gas pipeline explosion blistered the PUC's culture and practices. The panel demanded that both PG&E and the PUC "confront and change elements of their respective cultures to assure the citizens of California that public safety is the foremost priority."
There is no evidence this has happened at the PUC. And now, besides failing to ensure public safety, it appears it can't account for huge amounts of ratepayers' money.
What can Brown be waiting for?