PUC president removes himself from PG&E proceedings, top aide resigns

Stung by criticism the Public Utilities Commission had developed “too cozy” a relationship with the state’s largest utility, PUC President Michael Peevey removed himself from further proceedings over a huge explosion in 2010 in the Bay Area city of San Bruno that killed eight.

Peevey also said he had asked his chief of staff to resign for “inappropriate communications” with the utility, Pacific Gas & Electric Co., and she did.

At the same time, PG&E confirmed that it had made improper communications relating to the selection of judges on a natural gas rate case. As a result, the company said it fired three top vice presidents.

The PUC moves were part of a number of actions the commission announced Monday to distance itself from PG&E.

The action followed complaints filed in July by the mayor of San Bruno and others that PUC officials, including Peevey, did not properly notify the public of confidential communications with the utility.

The commission, then and now, is in the midst of deciding whether to levy a multibillion-dollar fine against PG&E for negligence related to the San Bruno blast that killed eight and injured 66.

The commission, in a statement, also said it would consider levying penalties against PG&E for its reported “inappropriate communications” by email between company executives and PUC officials.

The emails involved PG&E’s ongoing gas transmission and storage rate proceeding.

Peevey, who this year is finishing a second six-year term on the five-member commission, said he wants “to remove any doubt about my objectivity regarding these important cases.” The recusal should “ensure the public’s confidence in the credibility and objectivity of the CPUC’s decisions,” he said in a statement.

Finally, the PUC said that Peevey directed the commission’s executive director to conduct a review of any possible inappropriate communications between PUC staff and the utility.

The communications, which included Peevey giving public relations advice to PG&E, have been labeled as “too cozy” and a violation of law by San Bruno Mayor Jim Ruane. The city has asked the state attorney general’s office and other law enforcement agencies to investigate the relationship.

PUC officials are required to provide public notice of meetings and communications with parties that have legal proceedings underway at the PUC.

In a separate announcement, PG&E said that a review of five years’ of emails between the company and commission officials “identified a number of instances in which PG&E believes it violated the CPUC’s rules governing communications with the state regulator in the pending” gas rate case.

The PG&E filings are proof that San Bruno’s concerns about behavior at the PUC are valid, said Connie Jackson, San Bruno’s city manager.

“We are pleased that Mr. Peevey has come to the realization that his actions at least could be interpreted as improper,” Jackson said.

Twitter: @MarcLifsher