On the heels of its felony criminal conviction, PG&E has agreed to pay a total of $86.5 million in penalties to settle accusations of unreported and prohibited back door communications with public officials. The settlement must be approved by a vote of the California Public Utilities Commission before taking effect.
After the fatal PG&E explosion in San Bruno, a public records act request by the City of San Bruno ultimately led to revelations of 41 ex parte communications that resulted in a CPUC order opening an investigation and requiring PG&E to show cause why it should not be sanctioned for violating rules that require disclosure of meetings with regulators. The ensuing investigation revealed many more communications that parties believe also violated the Commission’s ex parte notice requirements, including shocking accounts of cozy and unlawful communications between a former PG&E lobbyist and former Commission President Peevey over “two bottles of good pinot”.
The seriousness of these violations is reflected in the proposed penalties, which would be by far the biggest penalties ever paid by a utility for violating the rules designed to prevent undue utility influence over crucial CPUC rate-making decisions. The bulk of the money to be paid by PG&E will go to reduce gas rates, consistent with TURN’s previous advocacy that directed the penalties paid by PG&E for the San Bruno explosion to benefit gas customers.
“Customers are tired of all talk and no action to hold PG&E accountable for criminal negligence and corrupt behavior,” said TURN executive director Mark Toney. “And they want assurances that they are not paying even a penny of the costs of that corruption and negligence in their monthly bills.”
PG&E will pay, out of its profits, a total financial remedy of $86.5 million, including $1 million to the state’s general fund and $10 million to customers for past costs related to PG&E’s ex parte violations and improving future compliance with rules that protect the public. The largest component of the remedy, $63.6 million in bill credits, will be paid by PG&E foregoing collection of $63,500,000 in revenue requirements for the years 2018 ($31,750,000) and 2019 ($31,750,000). A portion of the penalties, $12 million, will compensate the cities of San Bruno and San Carlos, since they were significantly affected by PG&E’s actions and were instrumental in identifying and publicizing PG&E’s unreported ex parte contacts.
Parties to the Settlement Agreement include all the Parties to the proceeding: the City of San Bruno, the City of San Carlos, the CPUC’s Office of Ratepayer Advocates and Safety Enforcement Division, TURN and PG&E.