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Peevey Departing CPUC at Year-End Amid Ex Parte Scandal

California Public Utilities Commission (CPUC) President Michael Peevey won’t seek another term after his expires at the end of this year, he said Thursday after more revelations emerged of inappropriate communications with Pacific Gas and Electric Co. (PG&E) executives.

State officials on Thursday again called for Peevey’s ouster while public ire increased over ex parte communications between Peevey’s office and PG&E (see Daily GPI, Oct. 7). The utility’s own image has been tarnished by fallout from the San Bruno, CA, pipeline rupture and explosion.

State Sen. Jerry Hill and the mayors of San Bruno and San Carlos said they would be pursuing a resolution when the state legislature reconvenes Dec. 1 to remove Peevey as president of the CPUC, where he has served an unprecedented 12 years. The legislation would attempt to block Peevey being reappointed to a third six-year term by incumbent Gov. Jerry Brown, who is expected to win re-election this November.

Hill and San Bruno Mayor Jim Ruane have been critics of both the CPUC and PG&E since a utility natural gas transmission pipeline ruptured, causing an explosion and fire that consumed a residential neighborhood, killing eight people four years ago (see Daily GPI, Sept. 13, 2010).

Hill said the state constitution allows for a CPUC commissioner to be removed by two-thirds vote of each legislative house for reasons of "incompetence, neglect of duty, or corruption." The elected officials are alleging that Peevey, a one-time major utility president in the state who made millions of dollars off the founding and eventual sale of a successful merchant electricity service provider in the 1990s, is culpable on all three counts.

In a statement issued Thursday, Peevey said, "12 years as president is enough; the governor, of course, will make a decision as to my successor in due time. I will speak more extensively regarding my terms as CPUC president at the last voting meeting of the year."

The latest emails, unlike earlier ones made public, are squarely centered on Peevey because they involve a detailed report from a now-fired PG&E regulatory executive telling his boss (also fired) about a private dinner meeting in May 2010 that he had with Peevey at the regulator's Northern California coastal home and specific business discussions that took place in that meeting.

Since the latest email communication dating back to before the San Bruno incident, a new wave of activity has been sparked with a major utility consumer group and the CPUC itself taking actions.

At a CPUC show-cause hearing Wednesday in which PG&E acknowledged that it will most likely face more penalties for its transgressions, The Utility Reform Network (TURN) charged that both the regulatory commission and the utility are not making public all of the 65,000 email documents that PG&E has submitted to the regulators.

"The commission, under President Peevey's leadership, has been mired in scandal since the PG&E explosion in San Bruno set off revelations of laxity and collusion at the agency," said a TURN spokesperson. "Now the CPUC appears to be trying to sweep the most recent revelations under the rug, rushing to slap PG&E on the wrist for a few emails without revealing to the public the full extent of the violations, or how the CPUC cases or decisions may have been corrupted."

Separately on Wednesday, CPUC Executive Director Paul Clanon announced a new internal reporting policy at the regulatory commission that the five commissioners and their staffs have pledged to adhere to in addition to the staff divisions reporting to Clanon and the administrative law judges. Clanon initiated new reporting procedures for all contacts between the CPUC and the investor-owned utilities being regulated.

Communications logs kept by all parts of the commission will be reported weekly beginning Oct. 15, and the summaries will be available to the public on the CPUC website (www.cpuc.ca.gov), Clanon said.

"This procedure will remain in place unless modified by me, or the commissioners at a voting meeting," Clanon said. "In addition, the CPUC will employ an outside expert to review internal procedures and consider if further steps are needed to safeguard against future ex parte violations by parties, or if additional rules are necessary regarding communications by CPUC employees with parties."

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