California's top utility regulator defends record

AP News
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Posted: Dec 18, 2014 10:04 PM

SAN FRANCISCO (AP) — California's chief utility regulator ended the last scheduled public hearing of his increasingly embattled 12-year term Thursday with no explicit reference to the alleged back-channel dealings with the state's largest utility company that have marred his tenure.

California Public Utilities Commission President Michael Peevey's only public reference to the matter Thursday was an enigmatic one. At the close of the hearing, in which Peevey allowed two hours of public testimony by allies praising him, Peevey raised both hands in the air.

"I surrender!" he declared, with no explanation or further comment.

State and federal prosecutors have notified Pacific Gas & Electric Co., whose region covers the northern two-thirds of the state, that they are investigating emails between CPUC officials and PG&E employees.

The utility disclosed the investigation in October and also released emails in which a PG&E executive described a private dinner where Peevey discussed PG&E regulatory matters while soliciting large donations from the utility. The PG&E executive, who has since left the utility, said Peevey asked PG&E to donate more than $1 million to support an environmental ballot initiative and make a separate $100,000 donation to a celebration of the utility commission's 100th anniversary.

Those and other emails heightened complaints by ratepayers groups and others that the commission under Peevey was too cozy with utility companies. Federal investigators who investigated a 2010 PG&E gas pipeline explosion that killed eight people in a San Francisco suburb concluded lax regulation by the commission contributed to the disaster.

Peevey has made no public comment on the allegations against him in recent months. In October, as the federal and state investigations into the emails were made public, Peevey announced he would not seek reappointment when his term expired this winter.

Peevey had refused requests for comment about the PG&E emails, saying that he would speak about his term at Thursday's final meeting. But Peevey made no mention of the allegations. In farewell remarks, he repeated the praise that Gov. Jerry Brown had used to defend Peevey earlier this year — that the utility official was a man who "got things done."

Earlier in Thursday's hearing, Peevey opened the floor to dozens of former utilities commission staffers, union officials, nonprofit representatives and others who praised him.

California Highway Patrol officers briefly surrounded the only person who took the floor to condemn Peevey. "You belong in jail," Steve Zeltzer, a local activist, told him.

"I don't like the accusatory tone," Peevey responded.

Peevey leaves with state authorities still deciding PG&E's final penalty for the 2010 explosion in the San Francisco suburb of San Bruno, Mark Toney, the head of The Utility Reform Network, a ratepayer advocacy group, noted outside the meeting.

Jim Ruane, mayor of San Bruno, where the pipeline blast also destroyed dozens of homes, said he hoped Peevey's departure would lead to change in the regulatory commission.

Meanwhile, utilities commission member Mike Florio on Wednesday denied an allegation in another PG&E email that he had offered to write a favorable opinion for a proposed gas rate if PG&E did not like one written by another member of the panel.

State regulators last month fined PG&E and required its shareholders to cover as much as $400 million of a planned gas rate increase because of alleged backroom negotiations between the utility and regulators.