SAN FRANCISCO, Calif. - Pacific Gas and Electric Company (PG&E) today affirmed its commitment to transparency and accountability and encouraged the California Public Utilities Commission (CPUC) to adopt new protocols for open access to communications between the Commission and all parties who are interacting with the CPUC.
PG&E is taking concrete actions to demonstrate its commitment that communications with the government regulator should be public:
- PG&E will provide the CPUC with copies of approximately 65,000 emails that were exchanged between company and agency representatives in order to ensure the CPUC, as the responsible state regulatory agency, is able to provide and manage a process for open public access to those emails. The emails, which date back to 2010, were the subject of a voluntary review PG&E undertook. PG&E has self-reported the violations it found. PG&E expects to be able to provide the emails to the CPUC by mid-February after reviewing them for appropriate and usual confidentiality exclusions such as specific customer information, competitive contract data and information about sensitive infrastructure.
- More broadly, PG&E is urging the CPUC to adopt new standards and processes that will allow the public to have easy, open access - preferably electronically - to communications the Commission has with all parties interacting with it.
- Finally, PG&E submitted to the CPUC 12 email chains that the company believes could reflect past violations of CPUC rules governing ex parte communications. Ex parte communications are those that take place with decision-makers and are either banned or are made without giving the required notice to all parties to a proceeding. These email chains can be read here.
PG&E Chairman & CEO Tony Earley said:
"We believe we can all agree that the business of the Commission is the business of the public. We support open access to communications taking place between the Commission and all parties."
"Some of the emails that we are reporting today suggest clear violations of ex parte rules along with behavior that clearly failed to meet our expectations. We sincerely regret that and have taken action to prevent it in the future. Other emails represent judgment calls that we are submitting out of an abundance of caution.
"We're committed to doing the right thing and to interacting with our state regulator in a transparent and ethical manner that upholds both the letter and spirit of the law and the company's own Code of Conduct at all times. Our customers expect no less.
"From the beginning, we took immediate and definitive action. When we first discovered violations of the CPUC ex parte rules, we self-reported them, we held senior-level officers accountable, and we are making significant changes designed to prevent this from happening again. We're also fully cooperating with law enforcement investigations.
"We want to be clear -- we have learned from this experience. Our goal is to have a world-class regulatory compliance model at PG&E that reflects the highest ethical standards. It also has become apparent that the CPUC rules and practices are overly complex and ambiguous. We respectfully urge the CPUC to put in place a clear regulatory model for open public access to communications with all parties."
Concrete Actions Taken
PG&E has already taken numerous actions as part of its effort to achieve the highest level of ethics and compliance possible:
- Three officers are no longer employed by the company;
- A new senior vice president of regulatory relations was named with the charge to overhaul PG&E's regulatory affairs department;
- The company created a new position of Chief Ethics and Compliance Officer, whose mandate is to help oversee compliance with all requirements governing PG&E's interactions with the CPUC. The position reports to the CEO and to the Audit Committee of the PG&E Board of Directors. A search is currently underway to find the best person for the job;
- PG&E engaged former Secretary of the U.S. Department of Interior Ken Salazar, a partner in the WilmerHale law firm, as special counsel on regulatory compliance matters to assist in developing a best-in-class regulatory compliance model. Salazar has served as Colorado Attorney General, United States Senator, and Secretary of Interior. Salazar and his team have helped PG&E:
- Define the position of a company-wide Chief Ethics and Compliance Officer, with direct reporting authority to the CEO and to the Audit Committee of the PG&E Board of Directors.
- Helped overhaul the rules of engagement with Commissioners and Staff at the CPUC, and for reporting and monitoring ex parte communications. These new rules of engagement have been communicated to employees within the Lines of Business that have any reason to interact with the Commission, on even an occasional basis.
- Helped develop new training, including web-based and instructor-led courses, on interacting with the CPUC. The training, which is underway, highlights compliance with ex parte rules and requirements.
- Engaged in bench-marking exercises to identify best practices for ethics and compliance.
- Participated in the Chairman's Ethics Council meeting to which all PG&E employees were invited to encourage employees to raise ethics and compliance issues directly to senior management.
Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with more than 20,000 employees, the company delivers some of the nation's cleanest energy to nearly 16 million people in Northern and Central California. For more information, visit www.pge.com/ and www.pge.com/en/about/newsroom/index.page.