By Jaxon Van Derbeken
Monday, June 22, 2015 – Updated 7:19 pm

The ability of Pacific Gas and Electric Co. and other utilities to engage in back-channel talks with top California Public Utilities Commission officials unfairly skews decisions in favor of big-money interests, and the practice should be banned in rate cases, a review requested by the state agency concluded Monday.

Such back-door communications became notorious last year when e-mails showed that a PG&E executive had engaged in a secret campaign to obtain a preferred judge in a $1.3 billion rate-setting case before the utilities commission. Those and other back-channel contacts — known as ex parte communications — are the focus of federal and state criminal investigations into whether commission officials violated influence-peddling or other laws.

In the aftermath of the judge-shopping revelations, the utilities commission hired the Strumwasser & Woocher law firm of Los Angeles to review its practice of allowing commissioners and their aides to meet with utility executives in rate-setting cases without other parties, such as customer advocacy groups, being present. Currently, rules require that the commission notify all parties of such solo talks three days in advance and that utilities submit a report on what was said.

The law firm’s report, the product of 88 interviews of current and past commission officials, concludes that such “communications are a frequent, pervasive, and at least sometimes outcome-determinative” in rate-setting cases.

The complexity of regulatory cases, the lawyers found, often means that checking on what is said during such meetings is difficult at best. The void allows utility lobbyists to exploit their personal relationships with decision-makers, the authors concluded, “sometimes overtly with ‘you know me’ and ‘you know you can trust me’ assurances, sometimes implicitly after years cultivating personal relationships.”

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