Cities, Consumer Advocates Blast PG&E-CPUC Pipeline Pact

By Published On: April 15, 2011

The California Public Utilities Commission should require Pacific Gas & Electric to immediately perform safety upgrades on 152 miles of old high pressure natural gas pipeline similar to the line that exploded in San Bruno last year, two local governments insist. Other parties complained that a proposed penalty for the utility is too low. The criticisms came in advance of an April 11 hearing on a proposed agreement between the commission and the utility seeking to resolve the company’s failure last month to fully comply with regulatory orders to produce extensive gas pipeline safety records. During the Monday hearing, commissioners expressed some reticence about the agreement--which would give the utility until Aug. 31 to supply all of the information and levy a $3 million penalty, with an additional $3 million due if the company misses the new deadline (Current, March 25, 2011). No vote was taken. “At the end of the day, safety is our highest priority,” said PG&E spokesperson Joe Molica, commenting on the calls for immediate retrofitting of old pipelines in highly populated areas and higher penalties. He characterized the utility’s schedule for completing safety record gathering and pressure-testing work as “very aggressive.” The CPUC, along with federal officials, ordered the utility to supply the safety documents--which are to show safe operating pressures for its pipeline system--after a PG&E gas line exploded Sept. 9, 2010, in San Bruno, destroying 38 homes and killing eight people The commission “should require PG&E to undertake immediately the testing and replacement work on the 152 miles of transmission lines in high consequence areas that may be most similar to the line that failed in San Bruno,” wrote attorneys for the city of San Francisco to the CPUC April 8. Right now, they complained, a proposed agreement between the commission and the utility would give PG&E another five months before it has to take any corrective action. San Francisco also joined with other parties saying that a proposed $3 million penalty is too low in the so-called stipulated agreement--even with an additional $3 million levy if PG&E fails to produce all of the safety records on time. The penalty for missing the new records deadline in the stipulated agreement should be $30 million instead of $3 million, wrote Marcel Hawiger, The Utility Reform Network attorney. He noted that PG&E’s average annual profits are about $1.1 billion and that the $3 million penalty amounts to less than 0.3 percent of that. San Bruno attorney Steven Meyers said that the commission should make sure that penalties PG&E pays are used to promote enhanced pipeline safety rather than just going into the state’s general fund. He suggested, for instance, that the commission use the money to hire additional pipeline safety inspectors. After the April 11 hearing, it remained unclear when the commission would vote on the proposed agreement.

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