Regulator sought donation from California utility

AP News
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Posted: Oct 07, 2014 10:00 AM

SAN FRANCISCO (AP) — California's largest utility has released an email saying the state's top regulator privately asked the company to donate more than $1 million to support an environmental ballot initiative and separately give $100,000 to a celebration of the utility commission's 100th anniversary.

Pacific Gas & Electric Co. said prosecutors have informed the utility that federal authorities are investigating the legality of five years of back-channel communications between PG&E and the California Public Utilities Commission, and an administrative law judge called a hearing Tuesday on earlier emails with top commission officials.

The U.S. attorney's office said it would have no comment.

The email released Monday was the latest in a series revealed by the utility and others that allegedly show PG&E executives privately negotiating with utility commission officials on matters related to rate increases and financial penalties.

Consumer groups and others say the emails show too-cozy relations between the utility and regulators, and the commission says some of the private communications may have violated its own rules.

In one email released Monday, from May 2010, former PG&E Vice President Brian Cherry describes to colleagues a dinner he says he had just shared with commission President Michael Peevey.

"Mike stated very clearly that he expects PG&E to step up big and early" to oppose a ballot initiative that would have suspended the state's historic climate change law, Cherry says in the email to another company executive. "Mike said ... we need to spend at least $1 million."

Later in the same dinner, Cherry said, he "jokingly" remarked that the utility could spend $3 million on the ballot initiative if the utilities commission approved an unrelated $26 million payment PG&E was seeking as a reward for its energy conservation program.

"He said that is a deal he could live with," Cherry said of Peevey.

In the same email, Cherry said Peevey also mentioned he wanted PG&E to give $100,000 for a then-pending celebration of the commission's 100th anniversary.

Neither Cherry nor Peevey could be reached for comment Monday. The commission said it already has commissioned a third-party review of its private communications with utilities.

PG&E eventually contributed $500,000 to defeat Proposition 23, which sought to repeal California's landmark climate law and clean energy signed by then-Gov. Arnold Schwarzenegger, according to MapLight, an independent group that tracks campaign spending.

In earlier emails to be examined at Tuesday's hearing, Peevey's then-chief of staff and another commissioner, Michael Florio, negotiated with Cherry on picking the administrative law judge who would hear a PG&E rate case. Peevey was copied on at least one of those emails.

Florio declined to comment Monday on the new email saying Peevey had pressed PG&E for donations, or say whether Peevey should stay on as the commission's leader.

"Not my decision to make," Florio said.

Gov. Jerry Brown has had little public comment on the matter since saying in August that he still supports Peevey, who was first appointed to the board by Gov. Gray Davis in 2002. Schwarzenegger appointed Peevey to a second term, which expires this year.

Brown's spokesman, Jim Evans, declined to comment Monday.

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Juliet Williams in Sacramento contributed to this report.