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New evidence of regulatory collaboration with big utilities

California Environmental Justice Alliance & Sierra Club Call on Attorney General to Investigate Collusion between Utilities and the California Public Utilities Commission

SAN FRANCISCO–  Today, the Sierra Club and California Environmental Justice Alliance (CEJA) called on the Attorney General to conduct a full investigation into the CPUC’s possible collusion with utilities after private emails were released showing inappropriate communications between executives at Pacific Gas & Electric (PG&E) and Commissioners staff at the California Public Utilities Commission (CPUC).

“Today we are calling on the Attorney General Kamala Harris to conduct a full investigation into the relationship between utilities and the California Public Utilities Commission, and what appears to be a pattern of collusion and abuse of process.  Only through a thorough investigation by the Attorney General can reforms be made and public trust restored,” said Evan Gillespie, Regional Deputy Director of the Sierra Club.

Click here for the letter.

In an application by PG&E to significantly increase customer rates to pay for gas pipeline improvements, the utility demanded, and received, appointment to the case a judge PG&E viewed as sympathetic.   PG&E’s judicial tampering is a blatant violations of the prohibition on communications with the CPUC on judicial assignment and the requirements that private written communications with CPUC decision makers be immediately made public.

“For too long, the California Public Utilities Commission has been vulnerable to influences that are not in the public’s interest or in the interest of the electrical system as a whole. The emails unearthed this week are just the latest example of the distorted relationship between regulators and the utilities, where special interests call the shots and regulators apologize when they cannot deliver on utility demands,” said Strela Cervas, Co-Coordinator of the California Environmental Justice Alliance.

Unfortunately, this most recent disclosure is symptomatic of an agency culture where decisions are based on political influence rather than evidence and impartial decisionmaking.  This is especially true in a variety of cases authorizing multi-billion dollar investments in new fossil fuel infrastructure.  For example:

  • Oakley Generating Station: Earlier this year, the California Court of Appeals unanimously overturned CPUC approval of a contract between PG&E and the proposed Oakley gas plant. The approximately 584 MW plant would cost over $1 billion for its 30-year contract because the need for the facility was based on “uncorroborated hearsay materials, the truth of which is disputed”  and that “the remaining evidence in the record fails to support the Commission’s finding.”
  • Hydrogen Energy California coal power plant (HECA): The recent emails show PG&E told the CPUC President’s office that PG&E expected to have a “harder time” with the $4 billion HECA project if the Commission did not assign its preferred judge to its pipeline case.
  • Carlsbad Energy Center:  At a September Pre-Hearing Conference regarding SDG&E’s application to approve a contract for the proposed 600 MW Carlsbad gas plant, the assigned Commissioner advised objecting parties that “if I were an intervenor trying to decide how to allocate scarce resources, I would not allocate them to this proceeding.”  The message was clear.  Even before evidence could be presented on whether the plant is needed and the contract was logical, the Commission had predetermined the proceedings outcome.

The Commission’s job is to maintain a safe and reliable grid as well as protect customers and the environment, not cater to special interests.  Only through a thorough investigation by the Attorney General can necessary reforms be made and the public trust restored.