PG&E issues rooted in Gov. Brown’s CPUC oversight

By Leo Herbstman, staff writer

Recent failures of PG&E equipment can be linked to that company’s campaign contributions to and lobbying of former Governor Jerry Brown. Instead of doing his best to ensure the business was well-regulated, there is evidence he went soft on them. 

PG&E is supposed to be regulated by the California Public Utilities Commission, and for the most part it is according to a CPUC employee at the media department who is not authorized to speak publicly on this issue. According to State Senator Jerry Hill from San Mateo, the problem is the lax regulations being set for PG&E by the CPUC. 

According to Hill, “After the explosion in San Bruno, it became evident that it was not an accident, it was illegal corporate behavior on the part of PG&E as well as an overly cozy relationship with the CPUC. The utility was diverting hundreds of millions of dollars for bonuses to executives instead of for maintenance.”

“The governor was a problem,” Hill went on. “[Brown] appointed the wrong people, people who were questionable in my opinion in terms of character and loyalty.” Hill added the political systems and relationships of Brown explain the appointments of regulators and loyalty between Brown and CPUC.

This all started when PG&E’s top lobbyist Brian Cherry influenced Brown’s decision-making for the CPUC Commission, according to the San Jose Mercury News and a Consumer Watchdog report. Publicly released emails cited in the report showed both Cherry and former Brown aide Nancy McFadden were unhappy with Catherine Sandoval and Michael Florio as commissioners of the CPUC due to Sandoval’s and Florio’s pro-regulatory beliefs, according to the Mercury News. Brown then appointed pro-business commissioners, which led to a PG&E stock price increase of around 14 percent by 2015, the Watchdog Report says.

After the appointment of McFadden on Jan. 5, 2011, PG&E donated $75,000 to the California Democratic Party (CDP) on Feb. 17. 2011, according to the Watchdog report. Then, McFadden and Cherry both influenced Brown to appoint pro-business Mark Ferron as a commissioner of the CPUC on March 22, 2011. Ferron was an ex-energy worker, and on the day of his appointment PG&E donated $42,500 to the CDP, according to the Watchdog report.

NBC Chief Investigative Reporter Tony Kovaleski found the explosion in San Bruno was due to an overly cozy relationship between the CPUC President Michael Peevey and Cherry. 

Kovaleski said, “there were expensive bottles of wine shared between Peevey and Cherry which brought up questions of the credibility of the CPUC.” “Peevey didn’t hold them accountable,” according to Kovaleski, and his report found that bonuses were paid to executives instead of trying to fix the problems which caused the San Bruno explosion.

After these possibly inappropriate relationships were brought to the attention of the public, many California State Senate bills were proposed to better regulate the CPUC. Hill was one of the sponsors of these bills, adding “the bills were to increase regulations after San Bruno.” 

“Governor Brown vetoed some of them because he listened to the wishes to the PUC for advice on the legislation which weighed heavily on the decision making,” according to Hill.

As a result of the questionable oversight of PG&E by the CPUC, recent fires and power outages have been increasing. Hill said, “I think these fires and power outages are a direct relationship to the maligned regulatory environment in California as it pertains to the utilities commission and investor-owned utilities companies.” 

Brown’s terms as governor spanned between the San Bruno explosion through the Tubbs Fire. Brown’s top donor was the CDP, according to followthemoney.org. Brown and the CDP received $2,966,269 from PG&E, according to the Watchdog report. In total, Brown received $9.85 million from California energy companies, including Edison, PG&E, and Chevron, according to the Watchdog report.

Hill concluded, “utilities got away with inappropriate funding, vegetation management, ignoring regulators, all by a regulator who quite frankly was in bed with the utility PG&E.”

After reaching out to the governor’s office regarding these ongoing investigations, they responded, “no comment.”

The CDP did not respond.