Investigation into Pacific Gas & Electric’s Improper Ex Parte Violations

Background

Between 2010 and 2014, officers and lobbyists of Pacific Gas & Electric Company (PG&E) communicated improperly with decisionmakers at the CPUC. Under CPUC rules, only certain kinds of communications between utilities and decisionmakers are allowed in regards to open CPUC proceedings, and many communications must be publicly disclosed. In the communications in question, PG&E either did not disclose the contact or disclosed the contact outside of the required time period.

 
In November of 2015, the Commission opened an investigation (I. 15-11-015) into PG&E’s improper ex parte contacts and ordered the utility “to show cause why it should not also be found to have violated the prohibition on ex parte communications.”

 
Between November 2015 and March 2017, ORA worked with PG&E and the other parties to the proceeding to determine which communications should be included in the proceeding, categorize the communications, and present the results to the Commission.


In March 2017, ORA, PG&E, Safety and Enforcement Division (SED), The Utility Reform Network (TURN), the City of San Bruno, and the City of San Carlos filed a motion to adopt an all-party settlement agreement to resolve the issues presented in I. 15-11-015. The settlement agreement contains both financial and non-financial components, which are outlined below:

 
The financial components of the settlement total $86.5M and include:

  • a $1M fine payable to the state General Fund;
  • $63.5M forgone collection of customer revenues in PG&E’s Gas Transmission and Storage Rate Case, spread over 2018 and 2019;
  • $10M forgone collection of customer revenues in PG&E's General Rate Case;
  • $6M payment from PG&E to the City of San Bruno; and
  • $6M payment from PG&E to the City of San Carlos.

 

The non-financial components of the settlement include:

  • An admission by PG&E that its misconduct violated Commission rules and caused harm;
  • A requirement of PG&E to report, for a period of 2-3 years, when PG&E provides a facilities tour to a CPUC decisionmaker, when it sends a rating agency or investor analysis to a CPUC decisionmaker, and when it holds a “meet and greet” with CPUC decisionmakers; these requirements are above and beyond the new ex parte requirements established early in 2017; and
  • A requirement of PG&E to certify training for all officers, regulatory affairs, and law department attorneys regarding the CPUC’s ex parte rules for a period of 3 years.

 

On September 1, 2017, the assigned Administrative Law Judge (ALJ) in the proceeding issued a Proposed Decision that accepted the settlement and increased the proposed fine from $1M to $12M. PG&E accepted the proposed decision on September 21, 2017.

 
At its April 26, 2018 voting meeting, the Commission approved the Decision approving the settlement agreement, as described above. The Decision also provides for a Phase 2 of the proceeding to address additional communications presented by PG&E in late 2017.

Phase 2 of the proceeding is anticipated to start sometime in 2018.

 

ORA Position

ORA supports the settlement as reasonable in light of the record and recommends that the Commission adopt it.

 

Other Resources:

See the Commission’s November 2015 Order Instituting Investigation.

 
See the Settlement Agreement and Motion for Adoption of the Settlement Agreement.

 
See the final approved Phase 1 Decision.

 

Proceeding Docket

See the CPUC Proceeding docket.

 
Here you can subscribe to regular proceeding updates.