Email: California Power Regulator Sought Donation

California's largest utility released an email Monday saying the state's top regulator privately asked the company to donate more than $1 million to support an environmental ballot initiative, and a separate $100,000 to a celebration of the utility commission's 100th anniversary.

Pacific Gas & Electric Co. also 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 utility commission. The U.S. attorney's office said it would have no comment.

The email is the latest in a series released by the utility and others that allegedly show PG&E executives privately negotiating with California Public Utilities 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 PG&E 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 that 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, the then-PG&E executive said Peevey also said 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 CPUC 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.

A state administrative law judge has summoned PG&E to a hearing Tuesday on earlier emails with top commission officials. In those emails, 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.

PG&E said Monday that Cherry and two other executives left the utility earlier this year over the alleged private communications between the state commission and utility executives.

"We took swift and decisive action'' when PG&E discovered the alleged improper communications in a utility review of more than 6,500 emails, PG&E spokesman Keith Stephens said.

A watchdog group for ratepayers said the latest emails underscored for them that the utilities commission, and its head, had lost credibility.

"It's just unbelievable that this kind of backroom double-dealing was going on for years,'' said Mindy Spatt, a spokeswoman for The Utility Reform Network. "This is beyond what we imagined.''

Federal prosecutors already have filed obstruction of justice and other criminal charges in connection with a 2010 gas pipeline explosion that killed eight people and destroyed dozens of homes in the San Francisco suburb of San Bruno.

Copyright AP - Associated Press
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