A scheme that helped Southern California Edison hide poor service and win $28 million in bonuses by rigging customer surveys was carried out by far more employees and stretched higher into the management ranks than the utility has publicly disclosed.
When the Rosemead-based company went public March 15 with the fraud, it said only that "at least 12 employees" of the service planning department -- none of them managers -- falsified the phone numbers of unhappy customers to make sure they couldn't be interviewed by customer satisfaction surveyors.
But Edison had admitted to regulators a week earlier that two supervisors had participated in the scam and that other managers "may have given the impression that such conduct would be tolerated," according to a closed-door presentation the company made to the California Public Utilities Commission before the company issued its press release.
Moreover, current and former employees of the service planning department say the scam was pervasive, driven by chronic understaffing and intense pressure to doctor survey results so the utility wouldn't incur service penalties and so bosses could pocket bonuses.
"Upper management knew about it, and they could have done something about it, and they didn't," said a person who spent years in the planning department but didn't want to be identified.
The extent and circumstances of the deception raise questions about Edison's staffing and service, about the reliability of data the utility gives to regulators and about the culpability of several layers of managers who employees say have been aware of the issue for years.
At the state PUC, which plans to launch an investigation into the scandal, Edison could be on the hook for millions of dollars in refunds and penalties. The company also could see its pending rate increases reduced. And the customer survey affair has cast doubt on the utility's bonus policies and the state's incentives to motivate regulated companies to provide good service -- an arrangement believed to have fueled the cheating at Edison.
"This falsification of data affects a number of different proceedings, proceedings that don't exist yet and investigations and so on," said Robert Cagen, a PUC attorney who wants the commission to make the pending Edison rate increases subject to refund if other problems are uncovered.
Edison's rate plan, for example, leaves intact existing compensation and bonus plans, Cagen said. "We don't want compensation that leads to this," he said.
