Mayor, Advocates Call on CPUC to Rescind Appointment of Mediator

Mayor Jim Ruane and other ratepayer advocates today delivered a letter to the California Public Utilities Commission in protest of the recent appointment a former U.S. senator to help mediate talks in several cases involving PG&E that are related to the 2010 San Bruno pipeline explosion.

The CPUC is considering penalizing PG&E for its actions that led up to the pipeline explosion in the Crestmoor neighborhood following a report earlier this year from the CPUC's Consumer Protection and Safety Division that showed that the utility had multiple deficiencies in its pipeline safety operations and that PG&E violated state and federal pipeline safety regulations.

The fines are expected to range anywhere from $200 million to $2.2 billion.

San Bruno Patch is sharing the letter in its entirety:

Dear President Peevey and Commissioner Florio:

We, the City of San Bruno, the City and County of San Francisco, the Utility Reform Network, and the Division of Ratepayer Advocates, are writing to you to express our deep concern regarding the Commission’s unilateral and behind-closed-doors appointment of Senator Mitchell, and his law firm, DLA Piper, as mediators for the San Bruno Explosion-Related Proceedings.

Specifically, the following circumstances regarding DLA Piper’s appointment as mediators concern us:

1. The Commission has acted unilaterally to appoint this mediator, at this time without regard to the views of the undersigned parties. In contrast, we have learned that PG&E's consent to DLA Piper as mediator was secured last week. As full-fledged participants in these cases and the negotiations, we are shocked that we were not provided the same option as PG&E to assent to this choice of mediator. The Commission is sending the clear message that PG&E’s views matter, and the views of San Bruno, San Francisco, DRA and TURN do not.

2. Typically, mediators are chosen with the consent of the parties to ensure that all parties have trust in the process. Here, we start from a position of deep distrust when our litigation adversary was given veto power over the mediator and we were not even consulted.

3. We do not question Senator Mitchell’s ability or integrity. Rather, we are concerned that he and his law firm have previously represented public utilities, including Southern California Edison Corporation (which President Peevey once headed). Moreover, one of the DLA Piper partners who will be most active in the mediation has represented WorldCom in a white collar criminal defense case highly similar to what PG&E faces: being simultaneously subject to a criminal investigation and civil penalties. Under these circumstances, we question whether DLA Piper and its chosen attorneys will be able to be impartial mediators.

4. We believe this unilateral action by the Commission will only slow down existing negotiations, which is in no one's interest.

For all of these reasons, we call on you to rescind the appointment of DLA Piper as mediators. If the Commission wishes to encourage the parties to use mediation, such mediation should be voluntary, and with a mediator chosen with the consent of all parties.

Signed by Connie Jackson, City Manager, City of San Bruno; Austin Yang, Deputy City Attorney, City and County of San Francisco; Thomas J. Long, Legal Director, The Utility Reform Network (TURN); Joseph P. Como, Acting Director, The Division of Ratepayer Advocates (DRA).

The city released a statement later in the day reiterating its disappointment with the CPUC's handling of the PG&E penalty proceedings. The following is an excerpt from the statement:

We find that there is too much of a coincidence that one week before the announcement of DLA Piper as mediator, we were told that “a mediator with gravitas” is necessary to settle the negotiations, and now, with the unilateral start of mediation, that PG&E shareholders are paying for the mediation. This leads us, we rightly believe, to the conclusion that the CPUC and PG&E have had improper ex-parte contact as part of this process.

We state unequivocally for the record that no fine or settlement with PG&E will ever be legitimate or credible without the participation of the City of San Bruno.

We call into question the integrity of the entire CPUC process that has occurred over the past two years since our community was ripped apart by the negligent and systematic safety failures of PG&E and the inability of the CPUC to independently protect and represent the interests of the residents of San Bruno and the people of California.

The healing process has physical manifestations in the reconstruction of our Crestmoor neighborhood. However, the scars and horrors of the explosion and fire remain. The City committed to its citizens that it would be an active and relentless participant in all of the investigations that followed.

We remain at the table to represent the interests of the citizens of San Bruno, the memory of those whose lives were taken by PG&E’s negligence, their families and friends, and equally important, every other city, town and community in the State of California so we can help others prevent what happened to us.