Judge: Regulator should release Brown e-mails on nuclear shutdown

A San Francisco judge is urging the state Public Utilities Commission to stop “stonewalling” and release e-mails that could reveal a behind-the-scenes role for Gov. Jerry Brown in a multibillion-dollar deal with two utilities that shut down a Southern California nuclear power plant.

Superior Court Judge Ernest Goldsmith acknowledged that he may not have the legal authority to order the state to turn over the e-mails, which the commission says were communications involving Brown and the president of the regulatory agency’s governing board, Michael Picker, about the closure of the San Onofre nuclear plant in San Diego County. The commission is legally justified in refusing to release the e-mails, its attorneys say.

But it’s in the public’s interest for the commission to “do the right thing” and reveal as much documentation as possible about what went into a deal that would cost Southern California utility customers more than $3.3 billion, the judge said.

The experience of another major California utility — Pacific Gas and Electric Co. — after the San Bruno disaster shows that “when something is big enough, it’s just got to come out,” Goldsmith said.

Suing the state

The utilities commission approved a shutdown deal last year with the San Onofre plant’s co-owners, Southern California Edison and San Diego Gas and Electric Co., that assigned about 70 percent of the $4.7 billion shutdown bill to the firms’ customers. The companies closed San Onofre after a January 2012 leak of radioactive steam revealed widespread damage to its cooling system.

Mike Aguirre, a San Diego attorney, sued the state commission on behalf of utility customers who argued that their share of the costs was too high. He went to court seeking to invalidate the shutdown deal after evidence emerged that the then-president of the commission and a Southern California Edison executive had met secretly in a Polish hotel to come up with the deal’s framework.

Seeking documents related to the secret negotiations, Aguirre filed a request under the state Public Records Act. When the utilities commission balked at turning over some of the documents, he filed another lawsuit.

Aguirre ultimately learned that the agency had withheld about 130 e-mails involving either Picker or Brown related to the San Onofre closure.

The commission says it doesn’t have to release those e-mails because they were sent as part of the regulatory agency’s internal deliberations about the proposed San Onofre settlement — an exception that is spelled out in the Public Records Act. They also argue that all of Brown’s communications with the commission are privileged because he is the governor.

‘Doesn’t sound right’

Separately, they say Aguirre must file his legal challenge in appellate court — not Goldsmith’s Superior Court.

The judge said the commission’s attorneys might be right that Aguirre is in the wrong court, but that the state agency should surrender the e-mails anyway.

“There's something about this that just doesn’t sound right about stonewalling public information like this,” Goldsmith told commission lawyers at a court hearing this month.

“Respectfully, your honor, we disagree that we’re stonewalling,” commission lawyer Jonathan Koltz replied.

The 65 e-mails that Brown either sent or received date from 2013 and 2014. The 63 listing Picker as the sender or recipient date from 2014, the year the governor named him to the utilities commission. Before that, Picker served five years as a senior energy adviser to Brown.

Aguirre became interested in the correspondence after he obtained an e-mail from Southern California Edison that its chief executive officer sent to company directors, which Aguirre says hints at the governor’s involvement in the San Onofre shutdown talks.

In the e-mail — sent June 6, 2013, the day before Southern California Edison announced the San Onofre closure — CEO Ted Craver wrote that he had talked with Brown several times on the phone.

“I indicated that I imagined his office would get media calls tomorrow about this and would be looking for his reaction,” Craver told the directors. “I indicated that if he was so moved, it would help if he could indicate we had talked and that he thought the company was acting responsibly and focused on the right things. He indicated a willingness to do that.”

At the time, Sen. Barbara Boxer, D-Calif., had called for a federal criminal investigation after documents emerged suggesting Southern California Edison’s executives knowingly used defective technology that damaged the San Onofre plant and led to its shutdown 11 months after it was installed.

Brown asked how Southern California Edison was going to deal with Boxer, and “fished” on whether the company was going to “blast” the senator, Craver wrote.

‘Taking the high road’

The CEO told Brown “no,” and that Southern California Edison was “taking the high road,” Craver wrote. He added the company would emphasize its commitment to “system reliability for the customers.”

“He said he agreed that was the best approach,” Craver wrote.

The day after Craver sent his e-mail, Brown’s office issued a statement about the proposed San Onofre decommissioning. The governor said that since the plant “went offline last year, energy utilities and the state have worked to provide Southern California with reliable electric power year round.”

The governor said he had directed experts to focus on energy “reliability for decades to come.”

“It appears from the record that CPUC and officials from the governor’s office, including the governor himself, were involved in the discussions at the CPUC regarding the San Onofre issue,” Aguirre’s law partner, Maria Severson, told Goldsmith. “The interest of public disclosure as to who and what was behind the decision to make utility customers pay over $3.3 billion for the errors of Edison is of vital importance.”

Brown spokesman Evan Westrup said in an e-mail last week that Southern California Edison and public officials had given the governor “courtesy notice of the action” to close San Onofre. But he said the way Craver characterized Brown’s comments was “false.” He did not elaborate, nor did he say whether the governor’s office had a position on the e-mail disclosure dispute.

Westrup said the statement that Brown issued when the San Onofre shutdown was announced “speaks for itself.”

‘Funny business’

At a Nov. 5 court hearing in San Francisco, Goldsmith acknowledged that he may be powerless to force the utilities commission to turn over the e-mails involving the governor and Picker. But he urged the agency to disclose the documents all the same, and set another hearing for Dec. 9.

“I frankly don't know why these two learned lawyers (representing the commission) are standing in front of me opposing it when the meaning of the (Public Records Act) is so clear that information of this type should be out there,” Goldsmith said.

“And it raises a question in the court’s mind and I imagine the public's mind that, hey, there’s some funny business that went on,” Goldsmith said. “There’s some decisions that were made that they don't want any sunlight to focus on it.”

The judge said the public’s perception was likely to be, “There’s something you don't want out there, that the PUC doesn’t want out to the public, and you’re standing on their rights under this, and they’re arguing that, hey, this ought to be out there in the public light, and it should.

“Now, if I had a way to do it, I’d do it,” he said.

Ironically, Brown vetoed a bill in October that would have granted Superior Court judges such as Goldsmith the power to resolve commission records disputes involving the Public Records Act. People fighting state government’s refusal to turn over documents must now go straight to an appeals court.

Aguirre said appellate courts often refuse to take such cases without even holding a hearing, something that doesn’t happen in Superior Court.

Brown “vetoed the legislation that would have made it clear and would have given us our day in court,” Aguirre said.

The Public Utilities Commission initially tried the same strategy when it refused to turn over documents the city of San Bruno requested after the September 2010 explosion of a PG&E gas pipeline killed eight city residents. The agency first argued that San Bruno should file in an appellate court, but eventually gave in and disclosed some of the documents in 2014.

PG&E later released other e-mails that revealed its executives had secretly lobbied the utilities commission to assign a preferred administrative law judge to a key rate case stemming from the San Bruno disaster. Additional e-mails showed a pattern of backdoor communications between PG&E and other state utilities and the commission, leading state and federal prosecutors to open investigations into possible violations of law. No charges have been filed.

As part of the state investigation, agents searched former commission President Michael Peevey’s home in January and found his notes related to the San Onofre closure talks he held with a Southern California Edison executive in March 2013 in a hotel in Warsaw, Poland. Aguirre says the notes are proof that Peevey improperly negotiated the shutdown deal, and that the Brown and Picker e-mails are critical to understanding how the utilities commission ultimately approved it.

“We believe the e-mails will show that the process was thoroughly compromised,” Aguirre said in an interview.

‘This is a big deal’

Goldsmith urged the utilities commission to reach an agreement with Aguirre similar to the one it struck over the e-mails that San Bruno sought.

“This is a big deal,” he said. “This is not a trivial issue to the taxpayers of California. And just like the San Bruno events were not a trivial deal, and when something is big enough, it’s just got to come out. It’s going to come out, and it’s either going to be horribly painful, or you can just do the right thing.”

Goldsmith told Koltz, the commission’s lawyer, “The whole country knows about the San Bruno affair, and I don't know that this is any less important.”

“I don’t believe it is, your honor,” Koltz replied. He agreed to meet with Aguirre in advance of the Dec. 9 court date.