PG&E targeted critics after blast, e-mails show
In the days after the 2010 San Bruno blast that killed eight people, top Pacific Gas and Electric Co. executives traded jokes and back-slapped with state regulators and tried to get them to denounce one of their most vocal critics, a Chronicle review of 65,000 e-mails shows.
The e-mails, which PG&E released late Friday, provide a singular insight into what critics say is an overly cozy relationship between the company and the California Public Utilities Commission, the agency charged with ensuring that utilities are operating safely.
At the center of the exchanges were Paul Clanon, the commission’s former executive director and the man who ran the agency’s day-to-day operations, and Brian Cherry, a since-fired PG&E vice president whose main job was to persuade state regulators to give the company what it want-
ed.
That effort included sharing “a bottle of good Pinot” with commission President Michael Peevey at the Sea Ranch retreat on the Sonoma County coast in 2010 and inviting him for “drinks and a catch-up” in 2013, the e-mails show.
As the smoke cleared from the San Bruno neighborhood destroyed by a gas-pipeline explosion in September 2010, what Cherry and higher-ups at PG&E wanted was to silence a nonprofit group that advocates for the company’s customers, The Utility Reform Network.
‘Irresponsible’ behavior
Soon after the disaster, TURN noted PG&E’s history of pocketing maintenance money for other purposes and called the explosion a case of the company “putting profits before customer safety.”
On Sept. 15, 2010, six days after the blast, Cherry wrote an e-mail to Clanon in which he said Peter Darbee, then PG&E’s chairman and CEO, believed that “TURN’s behavior has bordered on the irresponsible and wants to know if the PUC is willing to say so. I told Tom (Bottorff, Cherry’s then-boss) that the optics were against that, but I’m asking the question anyway. Protocol, of course.”
Clanon e-mailed back, saying: “Call me when you can.”
There is no record of what Clanon’s response was, but the next day, he e-mailed birthday wishes to Cherry. The PG&E executive replied, “Thanks. I’d love a nice muzzle for Mark Toney,” TURN’s executive director.
On Sept. 20, Cherry forwarded an e-mail to Clanon in which Bottorff denounced a TURN fundraising campaign letter. The letter, signed by Toney, was headlined, “No more San Brunos! Demand that PG&E put customer safety first!”
Bottorff called it “another irresponsible missive from TURN.”
‘Boston Strangler’
The commission never took a public swipe at TURN, but privately Clanon expressed sympathy for PG&E. When Cherry asked in another Sept. 20 e-mail about the possibility that critics of PG&E would be named to a panel investigating the San Bruno blast, Clanon joked that “Mark Toney and the Boston Strangler” were being considered.
Toney said the secret campaign against him and his group was evidence that state officials had failed to keep an appropriate distance from the utilities they regulate.
“What is outrageous is to see PG&E and CPUC in collusion to silence their critics,” Toney said. “It appears that is more important to them than getting to the bottom of the San Bruno explosion and making pipeline safety their top priority.”
When Cherry was not campaigning against TURN, he was swapping friendly personal messages with Clanon.
Cherry was out of state when the San Bruno disaster happened. Three days later, after Cherry flew back from Wyoming to California, Clanon e-mailed him to ask, “How was Jellystone?”
“Amazing, saw so much wildlife,” Cherry replied. “But it snowed the other day and I brought shorts!”
‘I rocked!!’
On Sept. 28, 2010, PG&E President Chris Johns testified before a U.S. Senate committee about the blast, as did Clanon. On Sept. 30, Cherry relayed to Clanon an internal PG&E document that concluded Johns had been “well-received” by the panel.
Clanon shot an e-mail to Cherry: “Chris was ‘well-received’? What about me??? I rocked!!”
Cherry replied, “You were awesome. They are pandering to an internal audience.”
A month after the blast, on Oct. 7, Cherry and Clanon discussed an online map that showed a major gas pipe near Peevey’s home in La Cañada Flintridge (Los Angeles County). “There’s a big line right under Mike’s street,” Clanon told Cherry. “He says no more dog walking.”
Serious questions
Not all the e-mails were on such a jocular level. In fact, one was prescient: In October 2010, well before the full extent of PG&E’s problems with its gas-transmission system had come to light, Clanon told Cherry he was struggling with an unsettling question: “If there’s another explosion in a gas transmission line tomorrow, what will we wish we'd done today?
“One thing that keeps coming back on me,” Clanon added, “is that I’m not sure how confident I am that PG&E knows enough detail about every pipe segment to be able to respond” to a National Transportation Safety Board inquiry about pipeline welds “or a particular manufacturer's method of the 1940s or ’50s, stuff like that.”
“Should I be confident? Do your people actually have the data? Or should PG&E be doing an all-hands effort to make absolutely sure it knows what's down there for every pipe segment?”
Cherry did not reply, but the company ended up having to do such an all-hands accounting of its pipeline records — at the behest of the federal safety board and state regulators — and found in many cases that it lacked critical data about its system. Record-keeping violations account for much of the $1.4 billion in possible penalties that the company now faces.
In the months after the San Bruno disaster, Cherry kept up his communications with utilities commission officials, including Peevey. On at least one occasion, Peevey suggested a way PG&E could make a case for itself with Gov. Jerry Brown.
In January 2011, Peevey sent an e-mail to Cherry urging him to share with a Brown aide, former PG&E executive Nancy McFadden, a financial analyst’s views that the San Bruno case was hurting PG&E’s stock. The report credited Peevey for his “even-handed” approach in controlling the situation.
“As I suggested before, this info should go to the governor's office, probably best to Nancy McF,” Peevey wrote to Cherry. “Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector.”
PG&E released the 65,000 e-mails in response to a court case filed by the city of San Bruno. A company spokesman said Friday that PG&E had done so because of its “sincere commitment to transparency and our own high ethical standards.”
Out the door
PG&E fired Cherry, Bottorff and a third executive in September after releasing e-mails that showed they were involved in lobbying the utilities commission to pick a preferred judge in a $1.3 billion rate-setting case. The fired executives have declined to comment.
Clanon retired from the utilities commission in December, saying he was going to study music. Efforts to reach him Saturday were unsuccessful.
Peevey also left the commission in December, after 12 years as its president. State agents investigating the judge-shopping case and other matters seized computers and other items from his home last week, less than two months after they searched Clanon’s former office at commission headquarters in San Francisco.