$3 Million Severance Package for Executive Linked to PG&E E-Mail Scandal

Monday, November 10, 2014
Tom Bottorff

A senior Pacific Gas & Electric’s (PG&E) executive who was ousted after being caught up in an emerging scandal over questionable e-mail contacts with the utility’s regulator,  the state Public Utilities Commission (PUC), will receive a $3-million severance package. 

Former PG&E senior vice president of regulatory affairs Thomas Bottorff left in September along with two other executives and a top PUC official after e-mails were released detailing suspicious contacts in the aftermath of the 2010 San Bruno gas pipeline explosion that killed eight people and leveled a neighborhood.

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 PUC and PG&E. The e-mails first came to light in July when 7,000 were released as part of a lawsuit settlement and documented how the two worked together to fend off criticism and investigators.

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

The Bottorff severance package, which could be worth upwards of $3.5 million if PG&E stock does well, was not unexpectedly met with scorn by critics. “This is business as usual at PG&E,” Mindy Spatt, a spokeswoman for The Utility Reform Network (TURN), told the Oakland Tribune. “It sort of adds insult to injury. Not only does Bottorff walk away with this severance package, but some of this may be coming from ratepayer money.”

PG&E announced last month that third-quarter profits had quadrupled, thanks in part to higher consumer rates approved retroactively.

The separation agreement acknowledged that Bottorff was owed salary and vacation time compensation, but stipulated that, “Even though Mr. Bottorff is not otherwise entitled to them, in consideration of his acceptance of this Agreement, the Company will provide to Mr. Bottorff the following separation benefits:” $1.15 million in severance pay, a bonus, stock, Cobra premium payments, career transition services, and “legal representation and indemnification protection in any legal proceeding.”

Utility spokesman Keith Stephens defended Bottorff’s severance. “The agreement is in line with what other officers have received who have left the company with commensurate years of service,” he said.

In fact, it pales in comparison to former PG&E CEO Peter Darby’s 2011 severance of $34.8 million six months after the San Bruno blast. The disaster brought to the fore long-standing complaints about the utility’s performance.

A federal grand jury indicted PG&E in April on 12 counts involving safety violations leading to the San Bruno explosion. “Despite knowledge of these deficiencies, PG&E did not keep a record-keeping system for gas operations that would ensure that pipeline records were accessible, traceable, verifiable, accurate and complete,” the indictment said.      

The utility settled civil lawsuits for more than $560 million late last year.

–Ken Broder


To Learn More:

PG&E Exec Involved in Email Scandal Harvests Severance Package of $3 Million-Plus (by George Avalos, Oakland Tribune)

PG&E Executive Linked to Email Scandal Gets $3 Million Severance Package (by David Mills, San Francisco Business Times)

PG&E Releases More Troublesome PUC E-Mails amid Federal Inquiry (by Ken Broder, AllGov California)

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