Capitol Alert

Peevey urged PG&E to lobby Jerry Brown, but warned, ‘You will miss Arnold’

Gov. Jerry Brown returns to his office after unveiling the 2015-16 state budget at the Capitol in Sacramento last month.
Gov. Jerry Brown returns to his office after unveiling the 2015-16 state budget at the Capitol in Sacramento last month.

Within days of Gov. Jerry Brown taking office in January 2011, Michael Peevey, then president of the California Public Utilities Commission, told a Pacific Gas and Electric Co. executive that he was right to worry about regulatory changes the Democratic governor might usher in.

A Wall Street analyst had raised concerns about commission appointments Brown might make, according to the executive, Brian Cherry, and PG&E was anxious about future rate-setting matters, as well.

“You may have reason for concern,” Peevey responded in an email, one of about 65,000 released last week. “Major changes coming and I fear lack of knowledge of subject matter. You will miss Arnold.”

Peevey and the PUC, which regulates California’s massive energy and telecommunications industries, are under ongoing scrutiny for back-channel communications with PG&E following a gas line explosion that killed eight people in San Bruno in 2010. Peevey, the husband of Democratic state Sen. Carol Liu, did not seek reappointment when his term expired at the end of last year.

The state attorney general and U.S. attorney’s office in San Francisco have both opened investigations into the matter. In emails released last year, Cherry said Peevey, among other things, suggested to PG&E that he expected the utility to spend at least $1 million opposing a ballot measure seeking to undo provisions of Assembly Bill 32, California’s landmark greenhouse gas reduction law.

In the most recent batch of emails, Peevey in 2011 encouraged Cherry to share the analyst’s concerns with Brown, finding “a way to get this info to Brown as he makes his decisions on Commissioners ASAP.”

Peevey added, “Probably best coming from a non-utility source, such as investment banker(s).”

Cherry responded, “Done,” but it appeared to have little effect. Weeks later, consumer advocates were cheered when Brown appointed a ratepayer advocate and a law professor to the commission, appointments widely viewed as pro-consumer moves.

When Cherry shared an analyst’s concerns about the appointments, Peevey again recommended an audience with Brown – preferably with his executive secretary Nancy McFadden, a former PG&E executive.

“As I suggested before, this info should go to the Governor’s office, probably best to Nancy McF,” Peevey wrote. “Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector.”

Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders.