One Million Dollar Sempra Pay Out To Gov's Sister Kathleen Brown Is Worth Discussing

Participating in a press conference yesterday in downtown LA, I watched as Jane Fowler faced the TV cameras and teared up over the re-opening of Sempra’s giant Aliso Canyon gas reserve next door to where she lives.

The site of the biggest methane well blowout in U.S. history forced her to flee, and the now-capped well is still leaking methane that makes her sick.

Fowler spoke as the Public Utilities Commission opened a sham proceeding in the Ronald Reagan State Building behind us to study the feasibility of shuttering the reserve—after just green-lighting with oil regulators high pressure injections into Aliso with zero environmental or seismic review and no report on what went wrong to cause the catastrophe and who was responsible.

That contradiction was something that PUC Commissioner Liane Randolph refused to come out and address in front of the gathered crowd of journalists, Aliso area residents, and advocates.

As a loyal foot soldier and former Brown appointee to the Natural Resources Agency, she delivered ultimatums to two oil well regulators Brown fired for refusing Occidental Petroleum’s demands for weakened well standards.

Could there be any relationship between Brown regulators’ favorable treatment of Sempra, despite endangering public health, and the presence of the Governor’s sister Kathleen Brown on Sempra’s board? After all, Sempra just made her a millionaire for a part-time gig. 

Could this be one reason why the PUC never opened a public investigation into who was responsible for the biggest methane well blowout in U.S. history?

Is this why the PUC also green-lighted $4.4 billion in ratepayer dollars for Sempra's San Diego Gas & Electric to buy power from new natural gas fired-power plants that Californians and San Diegans don't need, but that would feed SoCalGas, another Sempra subsidiary?

Without a doubt, all this has helped Sempra’s rate of growth nearly triple to a market capitalization of $28 billion since Brown was elected, and its stock price soar 117 percent. Nearly two thirds of that increase in capitalization came after Kathleen Brown was appointed to Sempra's board in 2013. In the first six months of 2017, Sempra nearly doubled its profits to $700 million, up from $369 million for the same period last year. 

But what about consumers that regulators allow Sempra to rip off? What about the health of thousands of L.A. County residents that they allow Sempra to threaten all over again?

The findings in our just-released report, Power Play: How The Governor’s Sister Made A Million Dollars From Sempra While Brown Appointees Let Sempra Bilk Ratepayers For Billions, connect some of these dots.

The Governor’s Office dismissed those findings by claiming, “The bark of California’s first dog, Colusa, has more substance.” Really? Kathleen Brown's $1 million dollar pay out swept under the rug is worthy of a public discussion, and so are the other findings in our report.  

Among the findings of Power Play:

•State regulators greenlighted the re-opening of Aliso Canyon although no seismic study or environmental report has been completed while the cause of the biggest methane well blowout in the U.S. remains unknown. The facility is not needed for energy reliability, but its reopening means that Sempra will be allowed to charge ratepayers $200 million for a new gas compressor station plus field maintenance of tens of millions of dollars while storing gas for commercial customers who play the market for deals.

•Under Brown, state regulators are considering a massive, 47-mile-long $600 million gas pipeline to run from Riverside County to the Mexican border that would enable Sempra to export liquefied natural gas to Asia, but would provide virtually no benefit to its core residential and small commercial customers who would pay $2.1 billion over the life of the pipeline, whether it serves them or not. The project would cross about 15 miles of land zoned for single or multiple family use and the PUC has the right to invoke eminent domain, if necessary.

•Governor Jerry Brown’s regulators have taken decisions and reversed negative decisions to favor Sempra shareholders over its ratepayers. They have approved fossil fuel power purchase contracts that will be paid for by SDG&E ratepayers that are not needed to meet electricity demand, slow the transition away from fossil fuels, and worsen global warming. This extra generating capacity more than doubles the amount needed to meet San Diego’s typical power demand annually.

•Sempra’s ratepayer-financed projects that are of no benefit to them raise questions about the relationship between the company’s fortunes, any future compensation for Kathleen Brown tied to Sempra’s stock price, and the approvals for fossil fuel infrastructure by Governor Brown’s appointees. More than half of Kathleen Brown’s Sempra board compensation is in the form of “phantom” stock that follows the movements of the real stock and pays out any profits. At a designated time, the cash value is distributed. This form of compensation links the financial interests of recipients with the interests of shareholders.

The state should fully disclose its investigation of Aliso and its own findings, as well as whether Kathleen Brown talked to anyone in her brother's Administration on reopening Aliso. Governor Brown should not be dismissing a real problem for Aliso Canyon residents and all Californians.

 

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