Public Utilities Commission executive claims ouster is due to whistleblower efforts

An executive threated to sue the California Public Utilities Commission, claiming retaliation over efforts to reform a system mired in illegal closed meetings, noncompliance of financial record keeping and failure to collect $200 million from utilities.

Executive Director Alice Stebbins who began her tenure with CPUC in 2018 was placed on administrative leave earlier this week. CPUC President Marybel Batjer and fellow Commissioners Liane Randolph and Cliforrd Rechtschaffen reportedly told Stebbins they have already decided to fire her, according to a letter written by her attorney, Karl Olson.

Olson, a partner at Cannata O'Toole Fickes & Olson LLP, said the commission is retaliating against his client while showing favoritism to regulated corporations including Pacific Gas & Electric Co. and AT&T whom he suspects lobbied for Stebbins' removal.

"We also affirmatively say that favoritism on the part of the Commissioners toward the regulated entities CPUC is supposed to oversee plays a role in the threatened termination of my client's employment," Olson's letter read. "The fox should not be guarding the henhouse and to put simply, it appears to us that the threatened termination of Ms. Stebbins' employment results not from anything she or her staff did wrong, but because they are trying to hold regulated entities accountable."

Spokeswoman Lynsey Paulo denied Pacific Gas & Electric Co. lobbied for Stebbins' removal.

"PG&E is committed to complying with both the letter and spirit of applicable laws and regulations pertaining to interactions with our regulator, as well as PG&E's own Code of Conduct at all times," Paulo said. "PG&E provides training for all employees who routinely interact with the CPUC on a yearly basis. The allegation that PG&E has lobbied for the removal of any CPUC personnel is false."

Jim Kimberly, director of corporation communications at AT&T, also denied the accusations.

"The letter is wrong. We did not advocate for the removal of anyone at the CPUC," Kimberly said.

According to Olson's letter, Batjer has wanted to fire Stebbins since a draft report from the state personnel board criticised Stebbins' hiring of half a dozen people in 2019 and 2018.

Olson warned CPUC that litigation would ensue if Stebbins was terminated. The letter also serves as a public records request, seeking the disclosure of exchanges, text messages, emails and other documented communications between the commissioners and PG&E and AT&T officials. Those exchanges could reveal how long termination discussions have been ongoing, Olson said.

Asked for a response to the allegations Wednesday, spokeswoman Terrie D. Prosper said CPUC does not comment on personnel matters or pending litigation.

In his letter, Olson pointed to a state report which found significant risks in CPUC's handling of accounts receivables, which shows approximately $200 million the agency failed to collect from utilities as of June 30, 2019. Half the money has been missing since 2017 and some date back to the 1990s, Olson said.

Stebbins raised concerns with the commissioners in February about the auditors' annual report, which was met with little to no reaction, according to Olson's letter.

The Department of Finance also documented several examples of ineffective management over budget functions, fiscal monitoring, and noncompliance with statutory requirements specific to the Division of Ratepayer Advocates and several other issues, Olson wrote.

The letter documents what it refers to as "a staggering number of closed meetings of the CPUC since 2017," most on matters that don't justify closed meetings under the Bagley-Keene Act.

Ratepayers and their advocates have long complained about CPUC's lack of transparency. There is little to no avenue to pursue any kind of judicial review of CPUC actions or to investigate any alleged wrongdoing, they say.

"It's hard to allow the public to participate and hold the CPUC accountable for their actions," said April Sommer, attorney for nonprofit Wild Tree Foundation who frequents CPUC meetings. "If these kinds of issues happened to the court or if the Legislature did this it'd be totally unacceptable. There are basic things that can be changed quickly to improve transparency but it's not happening. It seems to be getting worse."

Olson said Wednesday that CPUC behaves like a "private club, which is not what any government agency should be, especially one that is supposed to regulate the entire energy and telecommunications industry in California."

A meeting regarding Stebbins' position is scheduled for Thursday in closed session.