Utility faces contempt hearing for lobbying to choose judge in $1.29B rate case linked to fatal fire
After a fatal gas-supply pipeline rupture, explosion and fire in San Bruno, California, the utility company responsible spent $1.29 billion on pipeline improvements. Eight people died in the 2010 accident, dozens more were injured and 38 homes were reportedly destroyed.
The California Public Utilities Commission was set to decide how much of the $1.29 billion cost of the improvements could be recouped by raising the rates of Pacific Gas & Electric customers. Then PG&E successfully lobbied the commission to appoint the administrative law judge the utility company wanted to hear the rate-setting matter, reports the San Francisco Chronicle.
On Monday, the utility company notified the commission that it may have violated rules against ex parte communications and fired three PG&E executives.
On Wednesday, commission administrative law judge Hallie Yacknin ordered PG&E to appear before the state agency next month and show cause why the utility should not be held in contempt. At issue are January emails that asked for the appointment of administrative law Judge John Wong to the rate-setting matter and criticized two other administrative law judges, the newspaper explains.
The fired executives were PG&E vice president of regulatory relations Brian Cherry; Tom Bottorff, who served as PG&E’s senior vice president of regulatory affairs; and Trina Horner, a vice president of regulatory proceedings at the utility company, reports the Wall Street Journal (sub. req.).
Cherry is accused of violating ex parte rules by sending emails to the president of the utilities commission, Michael Peevey; the president’s chief of staff, Carol Brown; and commissioner Michel Florio, the WSJ reports. Bottorff and Horner simply were copied on the emails, according to PG&E and the commission.
The commission said Peevey recused himself from the rate case due to the inappropriate contact and asked Brown, who told Cherry at one point she was “working on it,” to resign, according to the two newspapers. Neither Peevey nor Brown could be reached directly for comment, the WSJ says.
Relying on unidentified sources, the Chronicle says Brown still has her previous rank as an administrative law judge, however, and is earning $120,000 a year while on leave.
Florio, who is a lawyer for the Utility Reform Network, a consumer watchdog, said he “didn’t know the rules” and that he had “screwed up,” the Chronicle reports, but insisted he had taken “no action” for PG&E.
If PG&E is held in contempt, the utility could face millions of dollars in fines, the Chronicle says.
A company spokesman said: “PG&E initiated a voluntary internal review of 65,000 e-mails, which led to this past Monday’s filing with the CPUC that certain officers of the company may have violated ex parte communications rules. The company took swift and decisive action and those individuals are no longer with the company.”
Related articles:
Los Angeles Times (sub. req.): “PUC president removes himself from PG&E proceedings, top aide resigns”
San Francisco Business Times: “3 PG&E executives fired for inappropriate emails with the Public Utilities Commission”
See also:
ABAJournal.com: “State legal team seeking $2B fine in fatal gas fire is reassigned; city calls for AG probe”
ABAJournal.com: “State lawyers may have stepped aside after disagreement over $2B fine sought in fatal gas fire”
ABAJournal.com: “Record $1.4B fine levied against gas company in fatal explosion and fire”
