State Senator Jerry Hill, Assemblyman Kevin Mullin and San Bruno Mayor Jim Ruane to Deliver Letter to Attorney General Kamala Harris Calling for Investigation of Back-Channel Communications Between CPUC and PG&E
Emails Exposing Collusion Between the CPUC Under President Michael Peevey and the State’s Largest Utility Underscore the Need for Independent Legal Scrutiny
WHAT: Senator Jerry Hill, Assemblymember Kevin Mullin and San Bruno Mayor Jim Ruane hold a news conference calling upon state Attorney General Kamala Harris to investigate apparent violations of law involving the California Public Utilities Commission (CPUC) and its communications with Pacific Gas and Electric Co. regarding the penalty case for the fatal 2010 explosion of a PG&E gas pipeline in San Bruno, as well as other cases that affect PG&E rates.
After the news conference, Hill, Mullin and Ruane plan to deliver the letter requesting the investigation to the Office of the Attorney General.
The call for an investigation follows the disclosure this week of further emails that show a pattern of inappropriate communication between the CPUC and PG&E, including exchanges that violate laws regarding ex parte communications between the entities.
On Monday, Pacific Gas and Electric Co. acknowledged that “inappropriate” communications occurred between the company and the CPUC. Emails released by PG&E showed that the utility tried to influence the selection of the administrative law judge who was to decide how much customers’ rates should go up to pay for required gas pipeline improvements following the 2010 explosion that killed eight San Bruno residents, injured more than 50 other people, and leveled a neighborhood.
The emails also showed that the chief of staff for CPUC President Michael Peevey – with his knowledge – repeatedly engaged in communications with PG&E in violation of CPUC Section 1701.3, which prohibits certain communications that are not available to all parties in a rate-setting case.
The letter from Hill, Mullin and Ruane also cites what appear to have been a series of illegal interventions on PG&E’s behalf in the penalty case against PG&E for the explosion in San Bruno perpetrated by the CPUC’s executive director and former general counsel – including pressuring its own attorneys to advocate no penalty in the case, which attorneys felt to be “illegal and unethical”; reassigning the attorneys after they refused to back down; and firing one when he pressed PG&E to produce pipeline safety records.
As California’s top law enforcement officer, Attorney General Kamala Harris has broad authority to investigate and enforce the state’s criminal and consumer laws. Senator Jerry Hill, Assemblyman Kevin Mullin and San Bruno Mayor Jim Ruane are urging her to exercise her power to protect Californians.
WHEN: 10 a.m. Friday, September 19, 2014
WHERE: California State Building
455 Golden Gate, Suite 14000
San Francisco, CA 94102
Background:
On September 2 – one week before the fourth anniversary of the devastating explosion in San Bruno, two administrative judges hired by the CPUC recommended that PG&E should pay a $1.4 billion fine for failing to maintain its natural gas pipeline. The proposed fine – which PG&E has said it would appeal – is significantly less than the $2.25 billion penalty the commission’s staff recommended.
On Monday, PG&E – already facing a federal criminal indictment for violations of pipeline safety laws and obstruction of a federal investigation – released a string of emails showing that the utility sought to influence the selection of the administrative law judge who was to decide how much rates should go up to pay for pipeline improvements.
The utility said that as a result of the inappropriate communications, three top executives were fired. Separately, Peevey announced he was recusing himself from involvement in the San Bruno case and had asked Carol Brown, his chief of staff, to resign.
Soon after, however, the public learned that Brown was merely returning to her former position as an administrative law judge at the CPUC – despite previously released emails obtained by the City of San Bruno through legal action that showed she offered advice to PG&E about how to handle one of the proceedings related to the San Bruno explosion.
For example, in an April 2013 email, Brown wrote to PG&E executive Laura Doll and said she talked to one of the CPUC administrative law judges about the proceeding. Brown also said she was “happy to chat” with PG&E to help guide company officials through the CPUC process.
Doll replied to Brown, “Love you. Thanks.” Doll remains on staff at PG&E, the company said.
In the email exchanges released Monday, PG&E expressed concern earlier this year about who among the CPUC’s stable of administrative law judges would be picked for the San Bruno case. On January 13, PG&E regulatory executive Brian Cherry — who was among those fired — wrote to Brown, asking her to get involved in the choice of the judge and of the CPUC commissioner who would supervise the case.
“Please, please check,” Cherry wrote to Brown. Brown replied, “Take a deep breath. I am working on it.”
At one point, PG&E executives put pressure directly on Peevey to intervene in the situation.
“This is a problem,” Cherry wrote on January 17 to Peevey. “Hope Carol can fix it.”
Recalling a prior proceeding, PG&E officials appeared particularly alarmed on January 22 about reports that Judge Douglas Long would get the case. Cherry also rejected Judge Julie Halligan, who has served as interim director of the CPUC’s Safety and Enforcement Division. Then on January 27 came word — from Brown to Cherry – that another judge, John Wong, had been assigned the case.
“Thank you. Thank you. Thank you,” Cherry wrote to Brown.
PUC Commissioner Michael Florio also decided to check if PG&E was pleased with the final assignment.
“I trust you’re happier now?” Florio wrote to Cherry. Unlike Peevey, Florio has not recused himself from the San Bruno case.
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Go get ’em Jerry!