Officials demand Attorney General probe PUC sorry but it started when my attorneys offices were torched

Officials demand Attorney General probe PUC 

They've been investigating since 2001

Officials demand Attorney General probe PUC for improper emails in case linked to San Bruno blast

By George Avalos, gavalos@bayareanewsgroup.com

POSTED:   09/18/2014 08:19:26 PM PDT0 COMMENTS

SAN BRUNO -- Three political leaders from the Peninsula said Thursday they want the state Attorney General to investigate the Public Utilities Commission and improper communications aimed at influencing which PUC judge would oversee a gas rate case linked to a fatal explosion in San Bruno.

"It is incumbent on the Attorney General or other enforcement agencies to rein in the corruption and conflicts that are obvious and pervasive at the PUC," state Sen. Jerry Hill said Thursday in an interview with this newspaper. Hill's San Mateo County legislative district includes San Bruno, where a PG&E natural gas explosion killed eight and wrecked a quiet residential district in 2010.

Hill, state Assemblyman Kevin Mullin, and San Bruno Mayor Jim Ruane all want the office of Attorney General Kamala Harris to probe a slew of email exchanges through which PG&E sought to influence the choice of the law judge for a gas transmission and storage case now before the PUC.

"We need an outside agency to look into this," Hill said. "We want the Attorney General to immediately investigate the apparent repeated violations of law by the California PUC in the San Bruno penalty case and other cases that affect PG&E rates."

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The emails showed that Carol Brown, chief of staff for PUC President Michael Peevey, repeatedly engaged in communications that are prohibited when all parties in the case are not made aware of the discussions. The improper discussions were in connection with a major case involving rates to finance improvements for PG&E's gas storage and transmission system. Brown engaged in the discussions with Peevey's knowledge, the emails indicate.

The communications between PG&E and the PUC violate laws that prohibit these kinds of contacts that occur outside the venue of a formal proceeding before the state agency, Hill said.

San Francisco-based PG&E has ousted three top regulatory executives involved in the email exchanges with the PUC. The state agency has forced Brown to quit as Peevey's chief of staff, although she could resume her duties at the PUC as an administrative law judge.

In response to questions about the possibility of an investigation by the Attorney General, PUC officials stated on Thursday they have already taken action in the matter.

The PUC has ordered PG&E to appear on Oct. 7 at a hearing during which the utility must prove why it should not be punished and fined for its role in the improper communications.

The state agency also claims that it is taken in-house steps to deal with the problem.

"President Peevey has directed the PUC's executive director to conduct a review, employing an outside expert, of internal procedures to guard against future ex parte violations by parties, and inappropriate contact by PUC employees with parties," the state agency said in a prepared release.

That's inadequate, Hill said.

"The problem is the PUC cannot police itself," Hill said. "The PUC does not have even a semblance of credibility or integrity."

The emails and other incidents suggest the PUC has created a cozy relationship with PG&E, a utility the state agency is supposed to regulate. Hill says the emails show that PG&E executives believe the PUC would be comfortable with the utility's attempt to shop for a judge in the case.

Ultimately, the PUC chose Administrative Law Judge John Wong, who was to PG&E's liking, to oversee the gas transmission case. Wong is responsible for gathering evidence and crafting a proposed ruling that will be the basis for the PUC's final decision.

Still, Judge Wong, in an interview with this newspaper, pointed out that he was the law judge who proposed a $38 million fine against PG&E because of a natural gas leak in Rancho Cordova in 2008 that killed one, injured others and caused property damage.

Some parties to the case had initially proposed a $26 million fine. But Judge Wong rejected those arguments and imposed the $38 million punishment. In late 2011, the full PUC ultimately approved Wong's decision.

"At the time, that was the largest fine ever issued by the PUC," Judge Wong said. "People may think I'm biased about PG&E. But you can draw your own conclusions."

Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.

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