Two years after a deadly gas explosion in the Bay Area city of San Bruno, California Public Utilities Commission President Michael Peevey described the city's mayor as "emotional" and the city manager as "nuts," according to emails newly released by the San Francisco utility giant Pacific Gas & Electric Co.
The Peevey comments are part of an internal memo sent to fellow executives by PG&E Vice President Brian Cherry, who has since been fired. Peppered by criticism, Peevey, 76, is ending 12 years as PUC president on Dec. 31 and not seeking a third term.
In the memo, Cherry recounted a meeting New Year's Eve of 2012 at Peevey's Sea Ranch vacation home on the rugged northern Sonoma County coast. The chat ended amicably, he said, "with a dram or two of Johnny Walker Blue Label whiskey."
Neither Peevey nor a PUC spokeswoman would comment on the Cherry memo or its contents.
Cherry reported that much of the conversation that day focused on a PG&E gas rate case and blame for the September 2010 explosion of a natural gas transmission pipeline that killed eight people, injured 66 and leveled 38 homes in a San Bruno neighborhood, near San Francisco International Airport.
Peevey, Cherry wrote, was angry about conversations he had with San Bruno officials that had been leaked to reporters. Peevey had told the officials "they could expect nothing from the commission if the outcome is litigated and not settled."
Peevey "characterized the mayor as emotional and the city manager as nuts," Cherry wrote to his supervisor. "As for the other parties, he believes they have been and continue to be unreasonable and he stated many of them were also unethical."
San Bruno officials responded Monday. The latest emails, said San Bruno Mayor Jim Ruane, "provide additional undisputed proof of the same public corruption between PG&E and the CPUC that has led to the termination of top PG&E executives and a shake-up of this state agency."
Peevey "has never demonstrated a particular interest in the positions or opinions of the city of San Bruno," City Manager Connie Jackson said. "He has been consistently rude and dismissive in person and otherwise."
Peevey's comments in private meetings with PG&E, she said, were "inappropriate for a public official, a decision maker of his status.... These emails demonstrate with very clear evidence what we suspected for a very long time, that Mr. Peevey and the commission itself have been far too engaged with the utility."
In what critics described as a growing scandal, federal and state law enforcement agencies have launched investigations into the allegedly improper memos and the relationship between the utility and regulators. The U.S. attorney in San Francisco has filed criminal charges against the utility related to the San Bruno explosion.
The Cherry memo was one of about a dozen emails and internal documents that PG&E released Monday. The messages, the company said, could reflect improper communications with state regulators.
PUC rules require that private conversations be shared with all parties in an ongoing legal proceeding, such as the natural gas rate case and the probe of the blast.
PG&E said it plans to release a total of 65,000 messages and related documents detailing contacts with the PUC by the middle of February.
"We believe we can all agree that the business of the commission is the business of the public," PG&E Chief Executive Tony Earley said in a statement. "We support open access to communications taking place between the commission and all parties."
PUC administrative law judges are proposing levying a $1.4-billion penalty against PG&E for negligence and poor record keeping.
The utility said it would appeal the proposed decision, which would require that the fine be paid by shareholders of the parent company, PG&E Corp., and not by its Northern and Central California ratepayers. A decision by the five-member commission is expected early next year.
In the meantime, both Peevey and a second commissioner, Mike Florio, have said they would not cast votes on either the PG&E penalty or the gas rate case because of their past communications with the firm.
Peevey is days away from ending his 12-year tenure as a commissioner, mostly as president. He played a leading role in getting the energy crisis of 2000-01 under control. He served under former Govs. Gray Davis and Arnold Schwarzenegger as well as current Gov. Jerry Brown.
Brown has publicly praised Peevey for his leadership of the 1,000-person PUC and for his work to expand the use of solar power, energy efficiencies and the fight to curb global warming and climate change. More recently, the governor has said there's a need for "fresh eyes" at the powerful commission.
Brown, however, has not indicated when he might name a successor to Peevey. The governor's newest appointee, Michael Picker, a former Brown renewable energy adviser, is considered a front-runner for the job.