PUC Fines PG&E $1 Million for Inappropriate E-Mail Exchanges—with PUC

Monday, November 24, 2014

California’s Public Utilities Commission (PUC) fined (pdf) Pacific Gas & Electric (PG&E) $1.05 million for inappropriate, if not illegal, e-mail communications between the two about selecting a favorable administrative judge to hear a rate-setting case related to the 2010 San Bruno gas pipeline explosion that killed eight people and leveled a neighborhood.

The commission also ordered the utility to refund up to $400 million to customers for the impact on rates their actions had. In a separate decision (pdf), the PUC fined PG&E $10.8 million for its contribution to a gas line explosion that destroyed a Carmel cottage in March.

PUC critics and PG&E both derided last week’s e-mail decision, albeit for opposite reasons. Critics said the decision did little, if nothing, to address the overly cozy relationship between the regulator and the utility, which they say led to shoddy practices and the San Bruno blast. PG&E said “sanctions were unwarranted” and the PUC may have overstepped its legal authority.

The PUC decision addressed the release of approximately 20 e-mails from January 2014 that appeared to show top officials judge shopping. But those 20 were just a small portion of the daily communications between the commission and the utility on a range of subjects.

Around 7,000 came to light in July as part of a lawsuit settlement and documented how the PUC and PG&E worked together to fend off criticism and investigators after San Bruno. The U.S. Attorneys Office opened an investigation in October.

After the decision, San Bruno city officials and The Utility Reform Network (TURN), an advocacy group, restated demands that the PUC force PG&E to release 65,000 relevant e-mails the utility acknowledged existed.

“Where this decision falls short is that it allows PG&E to cherry-pick which emails to release and when to release them,” TURN Executive Director Mark Toney told the Associated Press. “As far as we're concerned, the emails that were talked about today are just the tip of the iceberg. And there is so much more waiting to be uncovered.”

TURN attorney Tom Long gave an indication last week of the sort of actions that might result from further examination of e-mails when he said the PUC should reclaim $29 million that President Michael Peevey ordered paid to PG&E for developing an energy-saving program for consumers after an administrative judge had said they should get nothing.

The e-mails had included an exchange that seemed to indicate a quid pro quo guarantee that the utility would get $26 million in compensation if it contributed $3 million to a political campaign to oppose a greenhouse gas emissions rollback ballot initiative in 2010. PG&E reportedly spent $650,000.      

The 3-0 PUC vote to assess the penalty was taken without the participation of Peevey and Commissioner Mike Florio. They recused themselves because of their involvement in discussions documented by the e-mails.

Three PG&E executives involved in the scandal were ousted. Peevey’s chief aide, Carol Brown, resigned under fire and the boss announced he would not be sticking around after December to see if Governor Jerry Brown would appoint him to a third term.  

–Ken Broder


To Learn More:

State Regulators Fine PG&E $1 Million and Order Potential Reduction in Customer Bills (by George Avalos, Oakland Tribune)

PG&E Fined over Alleged Secret Dealings (by Sudhin Thanawala, Associated Press)

PG&E Fined $1 Million, May Have to Pay $400 Million in “Reparations” to Consumers over PUC Email Scandal (by Chris Rauber, San Francisco Business Times)

PG&E Fined $1 Million for Improper Emails to State Utility Regulators (by Marc Lifsher, Los Angeles Times)

PG&E Got $29 Million in “Corrupt Deal” with State, Group Says (by Jaxon Van Derbeken, San Francisco Chronicle)

PUC Judge Orders PG&E to Produce More Emails in Widening Scandal (by George Avalos, Oakland Tribune)

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

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