Newly released Pacific Gas and Electric Co. e-mails show that the head of the California Public Utilities Commission was willing to trade utility customers’ dollars for the company’s backing for his favored causes, a ratepayer advocacy group said Tuesday.
“This is nothing less than quid pro quo deal-making with ratepayer dollars,” said Tom Long, an attorney with the The Utility Reform Network. “I honestly have never seen such smoking-gun evidence of corruption at the highest levels of the commission.”
A spokesman for the commission denied that its president, Michael Peevey, had promised anything to PG&E in exchange for regulatory favors.
Long cited a May 2010 e-mail from PG&E Vice President Brian Cherry to his boss, Tom Bottorff, both of whom were fired last month when the company released e-mails showing Cherry had lobbied the commission to appoint a preferred judge to hear a rate-setting case.
In the 2010 e-mail, which PG&E released Monday, Cherry said Peevey appeared willing to trade favorable consideration in a rate-setting case for PG&E’s providing $100,000 toward a dinner in honor of the commission’s 100th anniversary. Peevey was overseeing a nonprofit fundraising committee for the dinner, Cherry wrote.
“He expects PG&E, Sempra, Edison and AT&T to contribute $100,000 each to the celebration committee (Edison and AT&T have already confirmed they will contribute),” Cherry wrote. Peevey said that “I was on notice,” the executive added.
Peevey told Cherry that he had hosted two delegations from China recently “and he had to fund the dinner for them out of his own pocket because the state is broke,” Cherry wrote in the e-mail. “At another event, John Bohn (a former utilities commissioner) and Mike ponied up $3,500 out of their own pocket for a lunch. He doesn’t want future commissioners to face the same dilemma.”
Cherry wrote that Peevey was “aware that we are looking for a good” decision on a pending gas-rate case. “He said to expect a decision in January — around the time of the PUC‘s 100th anniversary celebration. I told him I got the message.”
PG&E eventually bought a table at the celebration for $20,000.
The rate case was ultimately settled without a commission hearing, but Peevey helped PG&E on another matter that was related to the case, involving how much money the utility would get for swapping out old electric meters for smart meters.
Peevey proposed paying PG&E $6 million for the decommissioned meters, which consumer advocates said amounted to a gift to the company. Unable to gain support for that sum, Peevey compromised and the commission approved $3.24 million for PG&E.
“Peevey agreed with them that they should continue to profit and be compensated on these trashed meters,” Long said.
Peevey takes issue
Chris Chow, a spokesman for the utilities commission, said Cherry’s e-mail “is based on an interpretation of events from the perspective of a PG&E employee, and President Peevey disagrees with the characterizations.”
Long also pointed to another part of the 2010 e-mail from Cherry to his boss, in which the utility executive said Peevey appeared to be leaning on PG&E to contribute at least $1 million to fight a ballot measure that would have put a hold on a California law limiting greenhouse gas emissions.
“Mike stated very clearly that he expects PG&E to step up big and early in opposition” to the ballot measure, Cherry said in the e-mail, adding that Peevey expected the company to spend “a lot more” than $1 million.
“I jokingly suggested that if he gave us $26 million” in compensation for PG&E’s energy conservation costs, “we could come up with $3 million or so” to oppose the ballot measure, Cherry wrote. “He said that is a deal he could live with — but we both agreed lots of things above my pay grade have to happen before that is a reality.”
PG&E eventually spent $500,000 against the measure, which state voters defeated in November 2010.
Peevey ‘made good’
An administrative law judge concluded that PG&E did not deserve the energy-compensation money, but the commission — with Peevey’s support — eventually gave $29 million in customer dollars to the company.
“He’s a man of his word,’’ Long said. “Peevey made good on the deals.”
Chow, the commission spokesman, said in his statement that Peevey is “a staunch environmentalist” who “encouraged individuals and entities to support efforts to stop any attempts from repealing” the greenhouse-gas law.