Fallout from PG&E Emails Continues

Last week, California Public Utilities Commission (CPUC) Chief Administrative Law Judge (CALJ) Timothy Sullivan granted a motion by TURN and ORA to suspend the procedural schedule in the Pacific Gas & Electric (PG&E) Gas Rate Case. In addition, ALJ Wong was removed from the proceeding and the CALJ has reassigned himself as the acting judge pending his appointing another judge to take over the proceeding.

The Joint Motion requested that the procedural schedule in this proceeding be suspended, and that a prehearing conference (PHC) be convened to discuss a revised schedule. Additionally, all ex parte communications with the Commissioners regarding this proceeding are prohibited except for all-party meetings arranged by a Commissioner.

All of this is arising out of the allegations resulting from discovery of the emails between PG&E and CPUC Commissioners’ offices. Allegations are the emails show evidence of "judge shopping." Allegedly, the emails show CPUC President Michael Peevey’s Chief of Staff Carol Brown and PUC Commissioner Mike Florio working with PG&E to steer the GTS Rate Case to a judge of the utility's choosing.

Initial indications are that PG&E is willing to accept penalties over its emails to CPUC commissioners and their staff—communications in which the utility tried to influence the judge assigned to its gas transmission rate case at the CPUC. The commission will hold a hearing next month in which they accuse PG&E of breaking ex parte rules that prohibit communications on the assignment of judges.

As a direct result of this, Commission President Michael Peevey has recused himself from voting on that case and another big case involving PG&E’s penalty related to the fatal San Bruno gas-pipeline explosion of 2010.

CPUC rules prohibit ex parte communications regarding the assignment—or reassignment—of a proceeding to a particular judge and ex parte violations of this nature, related to "inappropriate communications," that it appears that PG&E managers had with CPUC members and staff in a gas-transmission rate case, total $1,000 per violation. A September 17 ruling from CPUC Administrative Law Judge Hallie Yacknin ordered PG&E to show why it should not be held in contempt and punished for breaking CPUC rules.

San Bruno Mayor Jim Ruane, Sen. Jerry Hill (D-San Mateo) and Assemblyman Kevin Mullin (D-San Mateo) want the state AG’s office to investigate. In addition, both the Sierra Club and California Environmental Justice Alliance also called for an investigation urging a review "of an agency where decisions are often based on private conversations and political influence rather than evidence and impartial decision-making."

PG&E conducted a review of about 65,000 emails following the City of San Bruno’s discovery of exchanges among the utility, Commission President Peevey and his Chief of Staff Carol Brown on issues related to ongoing cases at the commission regarding the rupture of a PG&E gas transmission line in San Bruno.

Noting the emails released this week, PG&E’s press release said it "believes it violated the CPUC’s rules governing communications with the state regulator" in the pending gas-transmission case. As a result, PG&E fired three people involved in those communications—PG&E Vice President of Regulatory Relations Brian Cherry; Tom Bottorff, Senior Vice President of Regulatory Affairs; and Trina Horner, Vice President of Regulatory Proceedings and Rates.

Carol Brown has resigned as Peevey’s chief of staff following a request by Peevey; however, Brown remains a "civil service employee on leave."

Peevey has taken a further step by asking CPUC Executive Director Paul Clanon to get an outside expert to review internal procedures "to guard against future ex parte violations by parties, and inappropriate contact by CPUC employees with parties." The commission will continue to review the San Bruno-related emails but has not issued an order to show cause on those communications as it did with the gas rate case emails.