Bills to Strengthen Ethics Rules for California, Florida Regulators Don't Focus on Revolving Door

Lawmakers in California and Florida bowed legislation this month to overhaul ethics rules within their states’ utility regulatory commissions in response to recent controversies. Both the California Public Utilities Commission (CPUC) and the Florida Public Service Commission (PSC) have faced similar legislation before. This time, legislators have shied away from focusing on provisions to reform state revolving door laws related to the private sector. Public interest advocates who continue to support strengthening revolving door laws say they believe strengthening existing laws can be difficult.

Thirty-seven states have some form of time-specific law that bans former regulatory commission employees from working in the private sector for industries they previously worked to regulate, according to state law information and data from State Integrity Investigation, a project led by the Center for Public Integrity, Global Integrity and Public Radio International. Both California and Florida have time-specific bans that apply to utility regulators. Former state employees in California can’t lobby for a year in front of their former agency on behalf of a private sector entity, while former employees in Florida face a two-year ban after their work for the agency. Twenty-one states have some form of a one-year revolving door ban, while 11 have some form of a two-year ban. Five states have a six-month ban. Thirteen states either have no revolving door law for public employees or seek to determine ethics issues on a case-by-case basis.

California Sen. Jerry Hill, a Democrat, introduced SB-48 last week to amend the state Public Utilities Code. The measure would spread some of the powers currently given to the CPUC president among all five members of that commission, require additional transparency from the CPUC, and require the CPUC to meet six times a year in Sacramento. The CPUC currently meets most of the time at its San Francisco headquarters.

Hill told us he introduced the bill in response to recent controversies over current CPUC President Michael Peevey’s relationship with Pacific Gas & Electric and other energy sector companies the CPUC regulates, but said the bill also would affect the commission’s telecom oversight and all other sectors it regulates. Peevey is retiring Dec. 31 after announcing earlier this year that he wouldn’t seek appointment to a third six-year term as CPUC president. Peevey didn’t cite the disclosure of emails that critics say show unethical back-channel discussions between his office and PG&E as the reason for his retirement (see report in Oct. 14 issue) and didn’t directly address the controversy or related federal and state investigations during his last CPUC meeting, held Thursday.

Democratic Gov. Jerry Brown appointed current CPUC Commissioner Michael Picker on Tuesday to replace Peevey as commission chairman. Brown selected California Natural Resources Agency Special Counsel to the Secretary Liane Randolph to take the seat Peevey will vacate at the end of the month. Both appointments are effective Jan. 1, Brown’s office said. The CPUC didn’t comment on SB-48 or claims about Peevey’s actions.

SB-48 doesn’t specifically include provisions that would update California’s revolving door law for the CPUC. But Hill said he believes “a president and a commission that in total has responsibility for actions and hiring will be more sensitive to that and take it into consideration rather than require us to legislate it.” Hill said he believes the revolving door policy does need to be strengthened as it relates to the CPUC, “but I’d expect a lot of resistance to it. It’s difficult to restrict someone’s ability to find a job just because of their history.” California’s Senate Appropriations Committee failed in 2012 to clear SB-981, a bill that would have raised the revolving door ban to two years for CPUC commissioners and executive staff. The CPUC opposed that bill, while California Common Cause and The Utility Reform Network (TURN) supported it.

TURN still believes the revolving door situation shouldn’t occur at the CPUC, “but we are mixed on the effectiveness of revolving door policies,” said Executive Director Mark Toney. TURN has been creating its own package of desired CPUC reforms but is unsure whether it will make revolving door reform a part of that package, he said. “At the end of the day, they’re challenging to enforce,” Toney said. “What we would like is a lifetime ban, but I don’t think it’s realistic to get that adopted legislatively because legislators think about their own possibilities” of joining the commission. A lifetime ban is the only revolving door law that would “make a difference,” he said.

California Common Cause “would definitely welcome” new legislation to strengthen the revolving door law for the CPUC, but didn’t discuss the revolving door situation as part of its conversations with Hill’s office on SB-48, said Sarah Swanbeck, the group’s policy and legislative affairs advocate. “A policy preventing commissioners from taking top-level positions in regulated industries after leaving the commission would certainly be welcome and would provide a disincentive to regulate favorably and not in the consumer interest.”

Florida PSC

Florida Sen. John Legg and state Rep. Chris Sprowls, both Republicans, jointly filed a bill in early December to implement reforms at the Florida PSC, including restricting commissioners to two consecutive terms.

Legg and Sprowls' bill, labeled SB-170 in the state Senate, would require each commissioner to represent a separate district rather than be selected on a statewide basis, with each district aligned to the boundaries for Florida’s courts of appeal. The bill would also restrict elected officials from joining the PSC for two years after leaving office.

SB-170 won’t change the two-year revolving door ban for former PSC employees who move to the private sector, but adding a two-year revolving door ban for elected officials would improve the ban by corresponding with other restrictions on lobbying by elected officials, said Rich Reidy, Legg’s chief of staff. “There’s been an escalating concern on the part of [Legg’s] constituents that the PSC has been getting further and further out of touch with the residents of the state.” Legg believes the PSC has lost its focus on being a mediator between the utilities and consumers, Reidy said. Legg sponsored a bill in 2010 that would have raised the revolving door ban for PSC employees to four years. A Florida PSC spokeswoman said the PSC “does not comment on proposed or pending legislation.”

Common Cause Florida “has always supported” strengthening the revolving door ban for the Florida PSC and other state agencies, though the ban would have a decreasing effect on the telecom sector because of deregulation policies that limit the commission’s ability to regulate the telecom sector, said Common Cause National Governing Board member Peter Butzin. The Florida Cable Telecommunications Association follows PSC reform efforts but doesn’t take an active position on changing the revolving door law, because “the Florida PSC doesn’t have any jurisdiction over cable and broadband services,” General Counsel Charles Dudley said. “Regulation of communications is still done by the PSC," said Butzin, former Common Cause Florida executive director. "But their reach isn’t as long as it used to be, simply because people are moving away from landline and VoIP isn’t regulated by the commission."