A brief peek in July at the real relationship between a government agency and a company it regulates was so revolting that it was almost a foregone conclusion that some gesture would have to be made to mollify the public and critics of the billion-dollar deal they were working out.

On Monday, California’s Public Utilities Commission (PUC) Chairman Michael Peevey announced he would not participate in deciding the penalty it would assess Pacific Gas & Electric (PG&E) for its actions contributing to the 2010 San Bruno gas pipeline explosion that killed eight people and leveled a Bay Area neighborhood. The commission is set to vote on a proposed $1.4 billion penalty for the utility.

Peevey’s chief aide, Carol Brown, resigned under fire for her participation in e-mail exchanges between the regulator and the utility that coordinated their actions and sealed their symbiotic relationship with expressions of love.

Brown advised PG&E that there were two ways for them to fend off a public-information request in May 2013 prior to a seminar that was to be attended by commission and utility officials. San Bruno officials were interested in knowing who paid for the seminar, at which the utility planned to publicize its safety improvements, and had complained about the imprudent association.

“Talked with the judge,” Brown wrote to PG&E official Laura Doll. “I think you have 2 ways to going (you might want to chat with your legal people).” Brown outlined the two suggestions, which involved obvious obfuscation. She knew at least one of them—saying the seminar was delayed and refusing the request—would get a rise out of critics. “Just wait for them to throw a fit,” Brown wrote.

Doll was most appreciative and responded, “Love you.”

PG&E announced that three executives in its regulatory division were fired. One of them was Brian Cherry, vice president of regulatory relations, who complained in e-mails to Brown that the choice of Douglas Long to be the administrative judge handling the San Bruno case was a “major problem for us” and proposed another, more receptive judge. “I'm not sure we could get someone worse. This is a very important case that is now in jeopardy,” the San Francisco Chronicle quoted from one of 7,000 e-mails released as part of a lawsuit settlement.  

The judges were swapped after PUC Commissioner Mike Florio reportedly wrote in an e-mail he concurred with that assessment and would “do what I can.”

Cherry’s boss, Senior Vice President of Regulatory Affairs Tom Bottroff, was also fired, along with Vice President of Regulatory Proceedings and Rates Trina Horner.

The fireworks from the e-mails may not be over. PG&E says it is reviewing another 65,000 e-mails from the past five years.

Peevey, 67, is a former president of Southern California Edison who was first appointed commission president by Democratic Governor Gray Davis in 2002. Republican Governor Arnold Schwarzenegger reappointed him to a second six-year term in 2008 and Democratic Governor Jerry Brown is pondering whether to appoint him to a third.

–Ken Broder

To Learn More:

Shakeup at PG&E, State Agency over "Inappropriate" Talks (by Jaxon Van Derbeken, San Francisco Chronicle)

PG&E and the PUC Oust Several Key Officials in Wake of Email Flap (by George Avalos, Bay Area News Group)

Shake-up at PUC, PG&E over Emails Related to San Bruno Blast Case (by Marc Lifsher, Los Angeles Times)

PG&E and Its Regulator Bonded in E-Mails after Deadly San Bruno Pipeline Explosion (by Ken Broder, AllGov California)