San Bruno Accuses PG&E of Misconduct

State Public Utilities Commission President Michael Peevey engaged in “illegal and improper” contacts with Pacific Gas & Electric Co. while the PUC was in the midst of considering up to $2 billion in fines over a gas pipeline explosion, according to San Bruno Mayor Jim Ruane.

The city of San Bruno, where eight people died and 38 homes blew up in a 2010 natural gas pipeline explosion, demanded Peevey’s removal from office and sanctions for PG&E, according to public announcement Monday.

In addition, the city asked for appointment of an independent monitor to oversee the PUC and PG&E so the public can be confident there is no undue influence on regulators, the city said.

San Bruno released what it said were emails between Peevey, his top staff and PG&E, that allegedly show the PUC president and his staff “consistently received confidential, non-public information from the Pacific Gas & Electric Co. regarding its internal deliberations and financial conditions outside of the CPUC public hearing process and in violation of the Commission’s own rules forbidding private communications between parties and decision makers.”

Among the documents San Bruno contends the emails show requests from PG&E for top PUC officials to intervene in the hearing process on issues linked to the San Bruno explosion.

The utility regulator is considering up to $2 billion in fines against PG&E in the wake of the pipeline explosion.

In April, a federal grand jury indicted PG&E on charges it knowingly violated the Natural Gas Pipeline Safety Act, requiring utilities to maintain accurate records about its pipe and identify risks to lines and test them when pressures exceed the legal limit.

San Bruno filed a lawsuit five months ago to obtain release of records it believed would show a “cozy” relationship between the utility and its regulators.

The city obtained 7,000 pages of emails “that demonstrate the CPUC process is corrupted and that the agency has lost its ability to carry out its mandated regulatory function as a watchdog for the public,” Ruane said in a prepared statement.

In March 2012, PG&E reached a $70 settlement with San Bruno to support efforts to recover from the pipeline disaster and it established a fund of up to $50 million to cover any costs directly related to the fire and the cost of recovery.

In a media statement, PG&E CEO Chris Jones said, “The company is committed to the highest ethical standards.”  In addition, he said, “I want to assure you that we will review the e-mails involved to make sure they met that standard.”

Members of the state PUC are appointed by the governor.

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