State officials urge charges in PUC probe

Two state officials and the mayor of San Bruno have urged California Attorney General Xavier Becerra to file charges in a long-running corruption investigation of the state’s utilities commission after suggestions that the agency’s lawyers may have tried to obstruct the probe — something the commission denies.

The move comes as October’s Wine Country wildfires, which may have been sparked by power lines, have brought fresh scrutiny to the California Public Utilities Commission,

which oversees electrical and telecommunications companies.

Long criticized for being too lenient with the companies it regulates, the commission underwent a series of reforms and leadership changes following the deadly 2010 explosion of a Pacific Gas and Electric Co. pipeline beneath San Bruno. But in a letter sent Friday to Becerra, Mayor Jim Ruane, state Sen. Jerry Hill, D-San Mateo, and Assemblyman Kevin Mullin, D-San Mateo, questioned whether the commission has truly changed its ways.

The three officials say that lawyers hired by the PUC — using money from California utility customers — have been refusing to turn over documents and filing motions to quash search warrants in the attorney general’s three-year investigation. Their comments are based on a series of documents unsealed last week by a Los Angeles County Superior Court judge.

“With the recent disclosure of the CPUC’s interference into your investigation, we’re becoming increasingly frustrated with the absence of charges being brought in the corruption investigation,” the officials wrote.

The investigation concerns back-channel dealings between the PUC and utilities, most notably a 2013 discussion between the commission’s president at the time, Michael Peevey, and a Southern California Edison executive about the costs of closing the San Onofre nuclear power plant.

The two discussed the topic at a luxury hotel in Warsaw, Poland, without disclosing it at the time, as state rules require. The commission eventually approved a closure plan in which Edison and San Diego Gas & Electric Co., which co-own the plant, would pay $1.4 billion while their customers would pay $3.3 billion.

“Why aren’t we seeing the charges filed?” Hill said Friday in an interview. “We have clearly seen evidence that would indicate a crime was committed.” Specifically, he cited the Warsaw meeting and previously released emails that he said showed quid pro quo arrangements between Peevey and PG&E executives.

The attorney general’s office did not respond to a request for comment Friday. Peevey, who recently co-wrote a book about California’s leadership on climate change, could not be reached.

The commission, however, pushed back.

In a press release, it reported that it had received 11 subpoenas and search warrants from state and federal investigators, starting in the fall of 2014 and continuing for 18 months. In response, the commission gave the attorney general’s office more than 1.21

million documents. And according to the release, the attorney general’s office notified the commission in December 2016 that the agency had fully complied with the search warrants.

“The (commission) has not hindered the process, and the Attorney General is not waiting for information,” the press release read. “The case is in the hands of the Attorney General’s office, and the next steps are up to the office.”

Peevey, who stepped down from the commission in 2014, came under fire during the aftermath of the San Bruno explosion as emails released by PG&E showed a close relationship between him and some of the company’s top executives. One email from a PG&E executive who lost his job in the scandal described a conversation with Peevey over “two bottles of good pinot,” with Peevey telling him the company needed to contribute at least $1 million to a ballot measure campaign Peevey considered important.

Some of the documents unsealed last week date from last year and show lawyers hired by the commission trying to quash warrants from the attorney general’s office demanding documents related to Peevey’s Warsaw meeting with Edison’s former executive president of external relations, Stephen Pickett.

The lawyers argued that investigators had not followed proper procedures in the warrants. They also asserted that Peevey had broken no laws by meeting with the Edison executive in Warsaw, so the attorney general’s office had no probable cause to believe a crime had been committed.

Their arguments did not sway Superior Court Judge William Ryan, who wrote on Aug. 12, 2016, that the known facts of the meeting between Peevey and Pickett were enough to show “probable cause that they conspired to obstruct justice, or the due administration of the laws.” He also said the PUC had agreed in advance to the same warrant procedures it was now complaining about in court.

And yet, the commission’s press release Friday continued to assert that the Warsaw meeting was not illegal. The only impropriety was that Edison, which has a legal obligation to publicly report personal “ex parte” meetings with commissioners, did not do so.

“Edison did not disclose the conversation and the CPUC fined Edison $16.7 million for its failure to timely report the ex parte communication,” the press release read.

In an April 2015 deposition, Pickett described the Warsaw conversation in detail, saying it started with him giving Peevey an update on efforts to restart the San Onofre nuclear plant after a small leak of radioactive steam revealed defective equipment. Peevey expressed concern that Edison might have to consider permanently shutting down the plant and then started exploring the ramifications. But at no point did Pickett believe that the two of them were negotiating a closure plan, he said.

“I did not engage in settlement negotiations with President Peevey,” Pickett said in the deposition.