The Utility's Actions to Detect a Violation: Utilities are expected to diligently monitor their activities. Deliberate, as opposed to inadvertent wrongdoing, will be considered an aggravating factor. The level and extent of management's involvement in, or tolerance of, the offense will be considered in determining the amount of any penalty.

We discuss these two principles together. It is clear that SCE did not take reasonable steps to ensure compliance with applicable laws and regulations. Not only did SCE take no action to prevent a violation, but there is convincing evidence that its management encouraged the violations.

The level and extent of management's involvement in, or tolerance of, the offense was considerable. SCE argues that the falsification and manipulation of customer service data was the fault of isolated bad actors and that management's response was sufficient to redress the violations. The evidence shows that some managers encouraged the falsification and manipulation, and others were in a position to know of the problem but failed to investigate thoroughly. Given the widespread emphasis on improving customer service scores through false and misleading activities for seven years, the sharp increase in customer satisfaction scores at a time of a reduced experienced workforce and an increasing workload, the only reasonable conclusion, as we have found, is that some managers encouraged the falsification and manipulation and other managers were negligent in their duty to prevent and detect violations and ensure the integrity of SCE's filings before the Commission.

In regard to health and safety reporting, it is clear from the start that the standards were inadequate, the definition loose, and as a consequence compliance totally unreliable. At the time of its first PBR request SCE, rather than requesting a reward, should, instead, have requested clarification of the standards to be applied, not only standards for recording first aid incidents, but also standards for classification of OSHA recordable injuries. SCE sponsored Exhibit 12 which describes with crystal clarity the imperfections in the standards for PBR health and safety, the failure of management to take responsibility to ascertain and correct the standards, the internal SCE investigations which revealed the shortcomings and, nevertheless, the continued request for PBR rewards.

For seven years, during which time SCE collected or requested PBR health and safety awards, SCE's own internal auditors knew of problems with both first aid reporting and OSHA recordable reporting. SCE should have known what was considered to be first aid for the purpose of PBR. The regulations are explicit and are easily available. They should be known to any company official that needs to report OSHA recordables. That official must determine what is properly classified as first aid versus what should be classified as an OSHA recordable in order to correctly report to OSHA. SCE management knew about the problems with the collection of first aid data, but failed to implement timely changes to correct those problems, or modify the metric. Yet management continued to request and to receive PBR awards.