Is Governor Newsom’s Office Trying to Keep Documents Secret Over Rushed Passage of Utilities’ Bailout?

After the Public Utilities Commission denied three Investor Owned Utilities in California – Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Edison – the cost of wildfire repayments, the utilities filed a lawsuit in the Federal District Court in California and took it to the U.S. Supreme Court, claiming that their tens of billions in wildfire liabilities should be paid for by utility customers – despite that Cal Fire repeatedly found electric utility safety violations to be the cause of the wildfires which led to the tens of billions in liabilities.

Following rejection of the utilities’ appeal by the U.S. Supreme Court, the California Legislature and Governor gutted-and-amended an existing bill, AB 1054 by Assemblyman Chris Holden (D-Pasadena) lightening-fast in late June, seeking to authorize the bailout of these investor owned utility companies from financial and legal consequences, despite their culpability in the wildfires.

San Diego attorneys Mike Aguirre and Maria Severson submitted several California Public Records Act (CPRA) requests to Governor Gavin Newsom’s office, seeking documents which would shed light on the rationale behind specific provisions of AB 1054.

In October, California Globe spoke with Attorney Maria Severson, Aguirre’s law partner, as she explained the case:

SDG&E was seeking $375 million back from the Public Utilities Commission for the wildfire payouts, PG&E and SCE filed briefs in support, and now must eat that money. The other utilities knew they also started fires. They asked the PUC if they could join in the SDG&E case to unload the wildfire costs on ratepayers. Initially the PUC didn’t allow it, but PUC President Michael Picker let them in — after the trial!

Ultimately the PUC denied the utilities the wildfire repayments, and they appealed to the appellate court. They were denied by the appellate court. They appealed to the United States Supreme Court, which made clear they were unwilling to hear the case, and left it alone. 

They lost big in the courts, so they went to the Legislature and Governor Newsom for the bailout. And they got one.

Severson explained further via the timeline:

In July through September, 2019, Aguirre and Severson requested documents as follows:

(a) On July 1, 2019, Petitioner requested records of communication between Respondent Newsom and Michael Peevey, a former CPUC Commissioner. (Petition, ¶ 54(b)).

(b) On August 19, 2019, Petitioner requested Respondent Newsom’s records of communication with the CPUC and PG&E relating to the topic of “PG&E’s reorganization plan.” (Petition, ¶ 54(c)).

(c) On August 20, 2019, Petitioner requested “records of communication between [Respondent] Cabinet Secretary Matosantos and/or any member of her staff regarding the ‘FERC standard’ or ‘serious doubt’ in the context of wildfires” and records regarding the “prudent manager standard of reasonableness standard in the context of wildfires.” (Petition, ¶ 54(d)).

(d) On August 26, 2019, Petitioner requested records of communications with PG&E “about the $20b tax exempt bonds” to be issued by the State of California on PG&E’s behalf if AB 235 were to pass.  (Petition, ¶ 54(e)).

(e) On September 30, 2019, Petitioner requested “any and all writings related to the subject of the ’60 Day Action Plan.’”  The words “60 Day Action Plan” appeared as the title of an e-mail meeting invite dated February 26, 2019, attended by (1) lobbyist Scott Wetch and representatives of IBEW Local 1245, and (2) Respondent Newsom agents Ann Patterson and Alice Reynolds. (Aguirre Decl., Ex. 4).

(f) On September 30, 2019, Petitioner requested “any and all writings related to the subject matter of AB 1054 in the possession of” individual agents of Respondent Newsom who had been named as attendees in Respondent Newsom’s many meetings with PG&E. (Aguirre Decl., Ex. 3).

(g) On October 11, 2019, Petitioner requested any and all writings regarding several tasks undertaken by Guggenheim Securities LLC on behalf of Respondent Newsom’s office, pursuant to a contract Guggenheim entered into effective February 1, 2019. (Aguirre Decl., Ex. 5).

A lawsuit and then motion was filed to compel the release of the records. The Governor’s opposition shows that State officials, under the direction of Governor Newsom, are now engaged in a pattern of delaying or denying the public from gaining access to the relevant public records.

Severson said the public should ask the following questions of Gov. Gavin Newsom:

– Why is the Governor trying to keep secret documents relating to the creation and rushed passage of the utilities’ bailout?

– Why is the Governor trying to protect communications and documents revealing what happened in the room when he met with PG&E, or with Labor’s Top lobbyist?

– Would the documents shed light on just how the plan was made requiring the public to pay over $10 billion for fires caused by utilities without due process as to whether the rates are just and reasonable?

– Whose idea was it to usurp the CPUC’s constitutionally granted powers?  Does Wall Street control ratepayers?

The Governor’s Office should disclose the requested records instead of doubling down to conceal them: the interests of the public in transparency far outweigh any interests in concealment.

Severson said AB 1054 should have served as a last chance warning against further utility disasters. Instead, AB 1054 became a bailout of the investor owned utilities, both financially and legally, from the consequences of their continued intransigence against prioritizing safety.

“AB 1054 provides for an endless amount of bonds to be issued and an endless amount of rate increases to meet the revenue requirement of the DWR charge fund so that the bonds to capitalize the wildfire fund are paid off, which in turn pays for whatever wildfire liabilities are incurred by the IOUs.”

The court will hear the arguments on March 2, 2020 in San Francisco Superior Court, Dept. 302, 400 McAllister Street, San Francisco.

Notably, as California Globe reported Monday, A.B. 2676 would expand on a current exemption that allows the Governor’s Office of Emergency Service (OES) to withhold records related to critical infrastructure from disclosure if that information is voluntarily submitted to an agency. The measure would remove the word “voluntary,” exempting information that is provided to OES as part of a court proceeding, hearing or other event.

Read the California Globe articles on the utilities, wildfires and lawsuits:

Lawsuit: California Utility Customers Forced to Bail Out Utilities for Wildfires They Cause ‘Who’s going to bail out the ratepayers for fires caused by the utilities?’

Utility Breakup Plan: Two Attorneys Say ‘PG&E Too Big to Succeed’

CA Governor Grandstanding On PG&E Takeover Threat