Michael Peevey

Investigators are looking into whether former PUC President Michael Peevey made deals with PG&E illegally. (Photo: Jeff Chiu / Associated Press 2014)

By Jaxon Van Derbeken
May 21, 2015
Updated: May 21, 2015 – 8:11pm

Investigators are looking into whether former PUC President Michael Peevey made deals with PG&E illegally.

A federal grand jury is probing potentially illegal ties between Pacific Gas and Electric Co. executives and regulators with the California Public Utilities Commission, The Chronicle has learned.

The investigation is looking into “PG&E’s relationship” with state regulatory officials, according to a May 15 letter to the utility from federal prosecutors.

The probe is separate from the federal court case charging PG&E with violating pipeline safety laws and obstructing justice in connection with the 2010 pipeline explosion in San Bruno that killed eight people. Prosecutors in that case are seeking more than $1 billion in fines from the company, but have not charged individual executives.

The latest grand jury investigation was opened after last year’s disclosure of e-mails between PG&E and the state utilities commission, which prompted probes by both state and federal prosecutors. Some of the e-mails showed a PG&E executive lobbying commissioners and their staffs for a preferred judge to oversee a $1.3 billion rate case. Others indicated that PG&E thought then-commission President Michael Peevey was dangling favorable state treatment in exchange for the utility’s backing for his pet fundraising and political causes.

In the letter disclosing the grand jury investigation, Assistant U.S. Attorneys Kim Berger and Hallie Hoffman told PG&E’s lawyers that they plan to use some of the evidence from the probe in the prosecution of the San Bruno case against the company. They did not specify what that might be.

The letter came in response to a PG&E request that federal prosecutors turn over San Bruno-related evidence and notes gathered by state regulators with the utilities commission.

Officials with the U.S. attorney’s office in San Francisco declined to comment on the letter, and representatives of the utilities commission did not immediately respond to a request for comment.

A PG&E spokesman, Greg Snapper, said in a statement: “We’ve publicly reported that state and federal attorneys have begun investigations in connection with these communications. We’re going to keep cooperating with officials as the process moves forward.”

The state attorney general’s office opened its own investigation last fall. It has not filed criminal charges.

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