Michael Peevey, president of the California Public Utilities Commission, has become entangled in a scandal over back-channel communications with officials at PG&E.
UPDATE: Officials at Pacific Gas & Electric refused to say Nov. 7 whether or not the giant utility has also been served with a search warrant by the State Attorney General's office. Instead, Keith Stephens,PG&E's senior director of business ops and field communications, confirmed only that the company "is cooperating with law enforcement officials." Pressed for a direct response to the question, Stephens repeated the same answer.
The California State Attorney General's office served a search warrant and seized records from the
California Public Utilities Commission's San Francisco headquarters Thursday as part of an investigation of potentially illegal "back-channel" email communications between CPUC officials and Pacific Gas & Electric, according to a
San Francisco Chronicle report.
Officials at the CPUC and State Attorney General
Kamala Harris' office weren't immediately available for comment early Friday morning. A CPUC spokesman wouldn't confirm or deny the published report, but said at about 9:45 a.m. that the commission might have a public statement about the matter "in about an hour." That was several hours ago.
Nick Pacilio, a spokesman for the State Attorney General's office, told me early Friday afternoon that Harris' office is not commenting on the search warrant situation and, in fact, hasn't "commented on whether or not we're investigating" the CPUC.
State and federal authorities are investigating the case, which involves so-called ex parte communications between CPUC President
Michael Peevey, board member
Mike Florio, senior PG&E officials and possibly others. At issue, among other sensitive topics, is an attempt by PG&E officials to have an administrative law judge seen as less likely to rule in the giant utility's favor in a huge rate-setting case replaced with one more amenable to PG&E's arguments.
As noted in the Chronicle article, the state Attorney General's office told the CPUC on Sept. 19 it needed to "preserve" any emails and other documents relevant to the case.
PG&E fired thee executives in September after some of the emails were made public, following a demand by the city of San Bruno. The rate case involves more than $1 billion in payments PG&E is seeking from its customers to help pay for gas pipeline improvements in the wake of the September 2010 gas-line explosion and fire that devastated San Bruno's Crestmoor neighborhood, killed eight people and damaged or destroyed hundreds of homes.
Peevey announced in mid-October he wouldn't seek reappointment as the commission's president. His term expires at year-end. Florio recused himself, also in mid-October, from further involvement in the rate-setting case.
The city of San Bruno is trying to compel the CPUC to release thousands of emails that may shed light on secret communications on the rate case and related issues, and said earlier this week that the commission is advocating changes that "could make it harder to obtain public records" in this case and others.
City officials initially filed a public records act lawsuit that forced the CPUC to make 7,000 pages of documents public, including some that San Bruno officials say "exposed shocking, illegal emails" between commission and PG&E officials.
Tara Kaushik, a San Francisco-based partner at the
Holland & Knight law firm who frequently works with the commission, predicted that one way or the other the CPUC is going to make significant changes in how it communicates with stakeholders, meaning companies and organizations it regulates or works with.
"We're going to see big changes in the industry going forward," she said, referring to the type of communications that have put the agency in potential legal hot water.
