SoCal Gas Seeks to Yank Lynch from Gas Probe

By Published On: November 30, 2004

Two days after a California Public Utilities Commission draft order charged Southern California Gas with market manipulation, the utility filed a motion to disqualify CPUC member Loretta Lynch from participating in the proceeding on the gas price spikes along the border during the energy crisis because of alleged bias. SoCal Gas filed its motion with the commission on November 18 (<i>C02-11-040</i>). Accompanying the CPUC motion was a complaint against Lynch brought in San Diego Superior Court. There, the utility claimed that she allowed a confidential conversation between herself and Lee Schavrien, utility vice-president of regulatory affairs, to be recorded by television station KCBS without his knowledge. Segments of the recording were included in a televised story called ?Power Plays.? Schavrien states that the secret video and audio recordings of his presumably confidential discussion with Lynch over lunch last month during a utility conference?excerpts of which were shown on KCBS?violated his right to privacy and will continue to be used to harm his reputation. He is seeking damages in an amount to be determined at trial. Lynch is said to be planning to write a book about what goes on behind the energy curtain. Lynch called the lawsuit ?frivolous,? contending it was brought ?to prevent me from exercising my statutory responsibilities.? ?The law is pretty clear: you have a conversation in a public area and you are game for recording. And, as they say in the backcountry, you can tell when the pig gets poked by its squeal,? said Michael Shames, executive director of the Utility Consumers? Action Network. Shames added that he would try to compel SDG&E to refund any money it spends on this suit in the next rate case. According to the lawsuit, Schavrien and Lynch attended an industry conference in Carmel on October 1. He asked the commissioner about the CPUC?s proceeding to allocate the costs of Department of Water Resources power contracts among the three investor-owned utilities, and she suggested that they meet and talk about it over lunch. The two discussed the matter after Lynch confirmed that other parties to the proceedings had discussed it with her. (Schavrien filed with the CPUC the requisite notice of <i>ex parte</i> communication outlining his discussion of the possible division of the DWR revenue requirement.) The suit states that Lynch subsequently asked, ?What do you have on Peevey?? and whether Schavrien had attended a fundraiser for CPUC president Mike Peevey?s wife, Assemblymember Carol Liu (D-La Canada?Flintridge). Schavrien told her, ?I knew if somebody from my company wasn?t there, we?d look bad.? That remark was included in the ?Power Plays? piece. The suit states, ?Mr. Schavrien believed his discussion regarding this issue was confidential and their conversation in that regard would be kept as such.? Lynch stated during the KCBS program that some of her fellow commissioners cut backroom deals. She pointed to Sempra, saying it got ?a sweetheart deal worth hundreds of millions of dollars,? referring to the Palomar and Otay Mesa projects approved by the CPUC earlier this year. Prior to filing the motion, SDG&E called the draft decision by CPUC administrative law judge Charlotte Terkheurst, which found that its sister utility reaped $28.8 million in ?ill-gotten gains,? essentially a ?politically motivated hit piece? pushed by Lynch (<i>Circuit</i>, November 19, 2004). (<i>Lawsuit docket #GIC 83894</i>)

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