PG&E fined $1 million for improper contacts with PUC officials

Southern California Edison announced plans in June 2013 to permanently shut down the San Onofre Nuclear Generating Station near San Clemente.
(Mark Boster / Los Angeles Times)

The California Public Utilities Commission on Thursday slapped Pacific Gas & Electric Co. with a $1-million fine for having improper contacts with commission members and top staff.

The punishment was for a series of emails sent by PG&E that discussed the selection of PUC judges in a high-profile natural gas rate case.

PG&E spokesman Keith Stephens acknowledged that his company deserves to be held “accountable when we fail to uphold high standards,” but said PG&E would appeal the decision.


The penalty comes amid a growing scandal involving widespread criticism of overly “cozy” dealings between PG&E executives and PUC President Michael Peevey, one of his colleagues and other top brass at the PUC. The email revelations also appear to have spurred ongoing investigations of the PUC and the utility by the U.S. attorney in San Francisco and the California attorney general’s office.

In the PG&E case, the reported “shopping” for the assignment of a potentially sympathetic administrative law judge was revealed in about 20 emails sent in January by the investor-owned utility.

The San Francisco company, which released the information after combing through what it said were 65,000 internal company emails, has admitted that it violated PUC rules against making contact with top PUC brass about legal issues that are not shared with other parties involved in legal proceedings.

The decision was approved by a 3-0 vote. Peevey and Commissioner Mike Florio publicly said they would not participate because both were personally involved in the email exchanges with PG&E about selecting judges in the pending case.

“Through this decision, we continue to send a signal to PG&E that we expect full compliance and appropriate respect for the CPUC’s processes and its staff as well as fair treatment to its consumers,” said Commissioner Carla J. Peterman, who wrote the ruling.

PG&E fired three senior executives for participating in the email exchanges. The utility said it would appeal the ruling because “it imposes sanctions that aren’t warranted and that may go beyond the CPUC’s legal authority.”


The penalty also prohibits PG&E executives from communicating individually with PUC commissioners and high-level staff and seeks potential reparations for gas customers for delays in setting new rates that could run as high as $400 million.

The five appointed PUC members at the meeting Thursday in San Francisco also unanimously voted to approve, as expected, a proposed settlement of nearly $5 billion in costs for closing the San Onofre nuclear power plant near San Clemente.

Ratepayers over the next decade will pay $3.3 billion while far less, $1.4 billion, will come from stockholders of the parent companies of Southern California Edison Co. and San Diego Gas & Electric Co., owners of the closed seaside plant.

In the San Onofre ruling, commissioners endorsed a revised settlement proposal that had been negotiated by Edison and SDG&E with two consumer groups, the Utility Reform Network and the PUC’s independent Office of Ratepayer Advocates.

The agreement covers the costs of buying substitute power for Southern California utility customers and other charges related to the June 2013 permanent shutdown of the 2,200-megawatt plant. The revised agreement also provides for greater returns to ratepayers from sales of surplus equipment and nuclear fuel as well as eventual insurance and lawsuit settlements.

“On the whole and in light of the record, this is in the public interest,” Commissioner Catherine Sandoval said.


Some ratepayer advocates, mainly from San Diego County, were outraged at the San Onofre settlement. They called it a boon to the utilities at the expense of residential and small-business consumers.

Led by Michael Aguirre, a San Diego lawyer, they have filed suit in U.S. District Court in San Diego. The suit accuses the PUC and Commissioners Peevey and Florio of illegally collecting billions from 17 million Southern California customers.

“Their no-discussion approval today,” Aguirre said, “again shows the CPUC has abandoned its duty to protect ratepayers from unreasonable rates.”

Peevey, who is completing a second six-year term, has said he will step down at the end of the year.

Twitter: @MarcLifsher