PG&E Releases More Troublesome PUC E-Mails amid Federal Inquiry

Wednesday, October 08, 2014

Like a troublesome leak from a Pacific Gas & Electric (PG&E) pipeline, the release of more e-mails this week between the company and its regulator, California’s Public Utilities Commission (PUC), promises to get worse over time and, perhaps, have an unhealthful end.

PG&E self-reported the e-mails amid reports that the U.S. Attorneys Office is looking at the past five years worth of communications, 65,000 e-mails, as part of an investigation of improper contacts between the two. They really aren’t supposed to have off-the-record contact, much less a relationship that might tax a couple of texting teens.  

The e-mails first came to light in July when 7,000 were released as part of a lawsuit settlement and documented how the PUC and PG&E worked together to fend off criticism and investigators after the San Bruno pipeline explosion killed eight people and leveled a neighborhood in September 2010.

The commission is set to vote on a proposed $1.4 billion penalty for the utility.

One of the inappropriate communications discussed how to arrange for a favorable PUC administrative judge to hear a rate-setting case related to the explosion. Judge shopping may have gotten the feds’ attention, but there will be plenty more to hold them rapt.

The PUC said the new e-mails it was releasing were violations of commission rules. One 2010 exchange, highlighted by the San Francisco Chronicle, has PG&E Vice President Brian Cherry writing to his boss, Senior VP of Regulatory Affairs Tom Bottorff, that PUC Chairman Michael Peevey wants the utility to spend a lot more than the measly $1 million it proposed to defeat Proposition 23—a freeze of California’s landmark greenhouse gas law.     

“I jokingly suggested that if he gave us $26 million we could come up with $3 million or so,” Cherry wrote. The offer was a swap of ballot support for reducing PG&E’s energy conservation costs. “He said that is a deal he could live with—but we both agreed lots of things above my pay grade have to happen before that is a reality.”

In another 2010 e-mail exchange, Cherry told Bottorff that Peevey was looking for a substantial contribution to the $100,000 dinner commemorating the 100th anniversary of the PUC. The Chronicle quotes Cherry as saying Peevey was “aware that we are looking for a good” decision on a pending gas-rate case. “He said to expect a decision in January—around the time of the PUC's 100th anniversary celebration. I told him I got the message.”

PG&E eventually paid $20,000 for a table. The rate case was settled without a hearing.

Cherry and Bottorff were fired in September. Peevey’s chief aide, Carol Brown, resigned under fire. Peevey, 67, is a former president of Southern California Edison who was first appointed commission president by Democratic Governor Gray Davis in 2002. Republican Governor Arnold Schwarzenegger reappointed him to a second six-year term in 2008 and Democratic Governor Jerry Brown is pondering whether to appoint him to a third.

–Ken Broder


To Learn More:

E-Mails Show CPUC President Cutting Deals, Critics Say (by Jaxon Van Derbeken, San Francisco Chronicle)

Federal Prosecutors Probing PG&E-CPUC E-Mails (by Jaxon Van Derbeken, San Francisco Chronicle)

PG&E "Self-Reports" More Suspect Emails to CPUC Officials (by Chris Rauber, San Francisco Business Times)

California’s Brown Returns PG&E Money as Probe Surfaces (by Mark Chediak and Michael B. Marois, Bloomberg)

San Bruno: New Emails between PG&E and PUC Amount to a "Smoking Gun" (by George Avalos, Oakland Tribune)

Gov. Jerry Brown Returns PG&E Donations amid Inquiry (by David Siders, Sacramento Bee)

PG&E and Its Regulator Bonded in E-Mails after Deadly San Bruno Pipeline Explosion (by Ken Broder, AllGov California)

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