PG&E Shareholders Face $400M for Judge ‘Shopping’

By Published On: November 20, 2014

Pacific Gas & Electric shareholders could pay up to $400 million for a delayed ruling on the utility’s 2015 gas transmission and storage case. The deferral was caused by utility officials pushing to get a judge of their choice on that rate case in violation of agency ex parte rules. Following the recusal of California Public Utilities Commission president Mike Peevey and commissioner Mike Florio, the other three commissioners Nov. 20 also voted unanimously to slap a $1.05 million fine on PG&E for breaking regulatory communication rules governing rate cases as revealed by emails released by the utility. The penalty also is to come from shareholders, not ratepayers. It is to be deposited in the state’s general fund. “It may not have enough of a deterrent impact,” commissioner Carla Peterman warned. She added, however, the commission expects “full compliance and appropriate respect for the CPUC’s processes and its staff, as well as fair treatment to its consumers.” Consumer advocates objected to the ruling. They advocated exposing all 65,000 email exchanges entailing communications between regulators and the utility. The “fine and other sanctions are based on an incomplete record that relies solely on evidence PG&E chose to disclose, rather than requiring PG&E to provide a complete disclosure of its back door communications with commission officials,” stated The Utility Reform Network. In the pending 2015 gas storage case, PG&E seeks a $555 million rate increase. A decision on the matter has been delayed by several months—to August 2015—because of the scandal over improper communication between the utility and commissioners. Any approved rate increase in the pending gas case, thus, will appear to be higher because it would be spread over fewer monthly utility bills. Just how much shareholders may pay for a delayed decision is to be decided as part of the 2015 gas rate case. The decision was revised the day before the vote to lessen restrictions on communication exchanges between PG&E and the commission. Parties were concerned because of a halt in communication flows, impacting regulatory staff’s ability to do their jobs. Communication has been “chilled,” warned commissioner Mike Picker before the vote. “Staff is having a harder time getting information from PG&E,” he added, seeking clarification on Peterman’s revised communication restrictions. Thursday’s decision was changed to specify limits on ex parte communication applied only to high-level commission staff. A competing iteration of the decision which was in effect put a kibosh on communications. Administrative law judge Hallie Yacknin in October prohibited PG&E from discussing with staff any matter involving the pending 2015 gas rate case. Her decision, however, stopped most exchanges on other matters as well, according to commission staff. Her competing, and un-adopted, decision would not have slapped any penalty on the utility. Both the approved decision and Yacknin’s proposal avoided ruling on requiring PG&E to release all 65,000 emails concerning exchanges with the commission as urged by consumer advocates and the City of San Bruno. Last month, both Peevey and commissioner Mike Florio announced they would not vote on the matter because of improper communication with PG&E. Peevey also announced he was retiring at the end of his term—Dec. 31, 2014.

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