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POSTED June 6, 2013 12:01 a.m.

The  California Profits Upkeep Commission - formerly known as the California Public Utilities Commission - continues to do what it does best which is protecting PG&E’s profits.

This week’s revelation that an audit showed PG&E didn’t spend $50 million for safety improvements to natural gas lines that the CPUC authorized PG&E to collect from ratepayers specifically for that purpose is just more of the same.

PG&E, of course,  disputes all of this saying they’re committed to safety and just don’t know where the money went. Funny, but every time they ask for a rate increase PG&E can provide such microscopic details of expenses that your eyes glaze over reading the volumes of fine print.

PG&E was granted monopoly status by the state and vested with certain government powers such as the virtually unrestricted use of eminent domain to conduct its business. In exchange the utility is subject - in theory at least - to regulation. The state government assures for-profit utilities such as PG&E a guaranteed return. That means in bad and good times they can be assured of a healthy profit.

That profit - in the case of natural gas - is supposed to be an 11.3 percent margin.

The audit conducted by a Kansas firm shows PG&E actual profit margin on natural gas between 2003 and 2010 was 12.7 percent and not the CPUC-authorized 11.3 percent.

Anyone want to help PG&E by guessing where the $50 million collected from ratepayers for safety went? If not for profits then perhaps it was the more than $10 million in bonuses they paid top brass for sending the utility to the edge of  bankruptcy a few years back, a corporate jet or two, or maybe it was squirreled away for their unsuccessful ballot attempt to amend the state constitution to block entities such as the South San Joaquin Irrigation District from selling retail power..

When the CPUC sets rates, it is obligated to make PG&E whole for the costs of providing both energy procurement and distribution as well as upkeep of the system.

The fact PG&E doesn’t play by the rules should have stopped surprising the CPUC years ago.

Congresswoman Jackie Speier on May 16, 2011 distributed a CPUC staff report that the actual commission laden with friends and former employees of the giant utilities they supposedly regulate ignored. It showed that between 1985 and 1997 PG&E collected $183 million for natural gas line safety improvements that they failed to spend. It included money to replace the San Bruno pipeline that exploded and killed eight people including, ironically, a CPUC staff member.

Where did the money go? It certainly wasn’t to pay their rank-and-file employees out in  the field. Nor did it go to pipeline safety. Gee, could it have been pocketed by PG&E big shots through bonuses or used to give the utility more profits than they’re legally entitled to receive?

The last line may make some conservatives cringe but here’s the deal. PG&E is not a free market animal in any sense of the word. The government not only protects their franchise by making it next to impossible for anyone else to compete for customers in their territory but they also guarantee them of a profit and a healthy one at that.

These are not isolated incidents.

PG&E made the case that they needed to replace 46,000 poles to keep the electrical system modernized and safe. The CPUC nearly 12 years ago agreed.

But a funny thing happened. Instead of replacing 46,000 poles a year, PG&E replaced significantly less. Opponents of rate increases combed through mountains of PG&E paperwork and discovered PG&E replaced only 15,000 poles annually in 2002 and 2003. They dropped that number down to 3,300 poles annually after that.

PG&E claimed there was more pressing needs yet they never elaborate. Regardless, the CPUC authorized part of the rates that were collected to be used specifically for power pole replacement.

PG&E doesn’t follow CPUC mandates and why should they? The CPUC is nothing more than window dressing.

PG&E may be a lot of things but when it comes to ineffectiveness and being a lap dog the CPUC is in a league of its own.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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