State Sen. Jerry Hill Calls For Ouster of CPUC President Over PG&E Emails

State Sen. Jerry Hill announced Wednesday that he will seek to have the state legislature remove California Public Utilities Commission President Michael Peevey over allegations that he made inappropriate arrangements with PG&E officials.

Hill said he will seek Peevey's ouster if he is re-appointed by Gov. Jerry Brown at the end of this year. The legislature, which is currently out of session and will return on Dec. 1, can remove him from the post only if two-thirds of assemblymembers and senators approve the legislation, Hill said.

He plans to hold a news conference Thursday morning in front of CPUC headquarters in San Francisco to discuss his call for Peevey's ouster.

San Bruno Mayor Jim Ruane and San Carlos Mayor Mark Olbert will be joining him there, according to Hill's office.

Hill also planned on demanding that Commissioner Mike Florio resign from his post.

Corruption allegations were made against Peevey and Florio's after the release of emails between PG&E and CPUC officials that were the subject of a penalty hearing Tuesday in San Francisco. Outside, representatives of a consumer advocacy group and the city of San Bruno called for a wider probe of new messages released a day earlier.

Tom Long, a lawyer with The Utility Reform Network, or TURN, said a newly revealed email message by a now-fired PG&E executive in 2010 describing a dinner meeting with Peevey was "smoking gun evidence of political corruption."

Long, who alleged the letter showed "quid pro quo deal-making," spoke outside the commission's headquarters in San Francisco after a two-hour hearing before Administrative Law Judge Hallie Yacknin.

Yacknin is considering what penalties to impose on PG&E for another set of emails that were disclosed by the utility on Sept. 15 that allegedly show judge-shopping by PG&E for an administrative law judge to preside over a gas transmission and storage rate case.

PG&E has admitted the off-the-record messages, known as ex parte communications, violated commission rules and has said it expects a financial penalty.

The messages were written in January by former PG&E Vice President Brian Cherry to Peevey, Peevey's former chief of staff and Florio. After disclosing the emails, PG&E fired Cherry, Senior Vice President Thomas Bottorff and one other executive.

Yacknin said she will issue a written ruling soon on the penalty, which could include a fine and possibly additional sanctions urged by TURN and San Bruno, such as stronger restrictions on ex parte communications. The ruling will be a recommendation to the commission, which will make the final decision on the matter.

Newly released emails show improper and secret communication between PG&E and the CPUC. Mark Matthews reports.

The hearing concerned only the January messages, but Yacknin noted that she was aware of the new set of emails released by PG&E Monday and said, "Nothing precludes further action by the commission on any further violations of the law."

Both TURN and San Bruno requested a wider probe in filings submitted to the administrative law judge.

The new batch of messages disclosed in a PG&E filing with the CPUC on Monday include Cherry's letter to Bottorff describing his May 30, 2010, dinner with Peevey and a set of December 2013 exchanges between Cherry and Florio on PG&E's bid to raise the pressure in a disputed natural gas pipeline in San Carlos.

PG&E said it believes the messages show violations of commission rules. In a cover letter to CPUC Executive Director Paul Clanon, it said Cherry's message about his 2010 dinner with Peevey includes references to discussion of four separate proceedings before the commission.

In the email, Cherry told Bottorff, who was his supervisor, that Peevey requested that PG&E contribute $100,000 to a 100th anniversary dinner for the CPUC and at least $1 million to a campaign against a ballot measure aimed at rolling back the state's greenhouse gas reduction law.

Cherry wrote, "Mike is aware we are looking for a good GRC (gas rate case) decision" and said Peevey told him to expect the decision in January "around the time of the PUC's 100th anniversary celebration."

"I told him I got the message," Cherry wrote to his supervisor.

Cherry also wrote that he "jokingly" suggested that if the commission allowed a $26 million payment to PG&E for an energy conservation program, "we could come up with $3 million or so" for the ballot measure opposition campaign.

"He said that is a deal he could live with -- but we both agreed lots of things above my pay grade have to happen before that is a reality," Cherry said in the message to Bottorff.

PG&E later contributed $500,000 to oppose the ballot measure, which was defeated by voters in November 2010.

Long said the commission by a 3-2 vote, with Peevey in the majority, in December 2010 approved a $29 million conservation program reward to PG&E in customer funds, overruling an administrative law judge's recommendation against the award.

"This is the stuff of political corruption," Long alleged.

A commission spokesperson was not available Tuesday to comment on the allegations.

At a news conference before Tuesday's hearing, San Bruno Mayor Jim Ruane said the latest disclosures showed "shocking, illegal behavior."

"The new emails document private, illegal communication between PG&E and the CPUC proving beyond doubt that collusion -- and possibly corruption -- has occurred," Ruane said.

A rupture in a defectively welded natural gas pipeline in San Bruno in 2010 caused an explosion and fire that killed eight people.

PG&E announced Monday that federal prosecutors have notified it that they have begun an investigation of the ex parte communications. It said it is cooperating with the probe.

Separately, the San Francisco-based utility has been criminally charged by a federal grand jury with obstruction of justice in a National Transportation Safety Board investigation of the San Bruno explosion and 27 counts of violating a federal pipeline safety law.

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