Lawmakers Zero in on Gas Safety Net Gaps

By Published On: October 22, 2010

Lawmakers probed state agency and utility staff and ratepayer advocates on ways to strengthen safety protocols and rules governing utility natural gas pipelines this week. They focused particularly on gaps in the state regulatory safety net. “Regulatory holes have to be plugged,” said Senator Rod Wright (D-Los Angeles) during an October 19 joint hearing of the Senate Energy, Utilities, & Communications and Senate Public Safety Committees. The hearing identified key regulatory weaknesses, including the California Public Utilities Commission’s inability to assure utilities actually spend funding for upgrading gas pipelines as scheduled. Lawmakers also zeroed in on the CPUC’s lack of oversight when utilities decide to redirect ratepayer money specifically approved by the commission for pipe upgrades or replacements. We shouldn’t let a utility “unilaterally decide to shift that money,” insisted Senator Alex Padilla (D-Pacoima), Senate energy panel chair. Julie Fitch, CPUC energy division director, acknowledged that her agency’s involvement in gas proceedings needs to be “more systematic.” She said the commission expects to revamp its ratemaking process for gas utilities in light of the September 9 Pacific Gas & Electric gas line explosion in San Bruno. Regulators plan to look more closely at stakeholder settlement accords detailing how funds in gas rate dockets are allocated, they said at the hearing held in response to the explosion. The CPUC also came under fire for failing to fine PG&E for gas safety lapses cited by federal regulators prior to the September 9 explosion and for not taking more decisive action after last month’s accident. Senator Mark Leno (D-San Francisco), safety panel chair, took issue with regulators’ failure to fine PG&E for gas pipe safety lapses identified by federal regulators that caused fatalities and property damage. He further noted the safety failures exceeded those of other gas utilities. “Where’s our watchdog agency?” asked Senator Dean Florez (D-Shafter). He specifically blasted the CPUC for appointing a Blue Ribbon panel to carry out a potentially lengthy evaluation of the San Bruno accident rather than acting more quickly. Last week, the commission appointed experts to the panel. It’s charged with evaluating the explosion and recommending whether it’s safe to increase gas pressure in pipes serving the San Francisco Peninsula region after it was reduced following the accident as a precautionary measure (Current, October 15, 2010). Currently, residents of San Bruno, the city, and consumer and safety advocates have no way to participate in the CPUC’s investigation of the accident, complained Mike Florio, senior attorney for The Utility Reform Network. That’s because the commission’s staff is conducing the inquiry in an informal manner and out of public view, he explained. In response, Leno called on the commission to open a formal inquiry so the public can learn more about the cause of the accident and what’s being done to rectify it. While lawmakers focused heavily on the role of the CPUC in assuring pipeline safety, Pacific Gas & Electric, which operates the pipe that exploded and is under investigation, faced less questioning. Utility attorney Chris Warner did say that the company does not intend to seek ratepayer recovery for any third party liability it faces that may exceed its $1 billion insurance policy. However, should insurance rates climb or insurance become unavailable in the future, utility representatives maintained that ratepayers should bear the added cost of a policy or the cost of utilities self-insuring.

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