PG&E: More Federal Charges, San Bruno Allegations

By Published On: July 31, 2014

Months after public records requests and a lawsuit, a stack of formerly withheld records revealed “shocking and unlawful” exchanges between state regulators and Pacific Gas & Electric, the city of San Bruno claimed July 28. The next day, a federal grand jury for the Northern District of California charged the utility with obstructing justice during the National Transportation Safety Board’s investigation of the pipe blast in San Bruno in September 2010 and additional pipeline violations. A new complaint was filed in court July 29, superseding an earlier one by the U.S. Attorney April 1. The new filing alleges the utility told federal investigators it followed a threat response policy, which was later found to be “an unapproved draft” erroneously released, stated the U.S. attorney Melinda Haag. “The consequence of this practice was that PG&E did not prioritize as high-risk, and properly assess, many of its oldest natural gas pipelines, which ran through urban and residential areas,” added the US attorney. The utility now faces a total of 27 charges in federal court, most for alleged violations of the pipe safety act, and a penalty that could exceed $1 billion. PG&E called the superseded filing “unwarranted,” but acknowledged “mistakes were made.” Earlier, San Bruno obtained 7,000 pages of “emails that demonstrate the California Public Utilities Commission process is corrupted and that the agency has lost its ability to carry out its mandated regulatory function as a watchdog for the public,” Jim Ruane, San Bruno mayor, said. Some of the correspondence between the regulator and regulated utility now in San Bruno’s hands include tips on how to effectively deal with the administrative law judge handling the proceeding with a proposed $2.5 billion penalty. All these actions are a result of PG&E’s gas transmission pipe rupture in San Bruno that killed eight and destroyed more than three dozen homes. To force the release of documents, San Bruno filed five public records requests at the commission between May 2013 and January 2014. It also filed suit in San Francisco Superior Court, alleging the commission’s failure to release requested documents violated the Public Records Act (Current, April 10, 2014). The commission stated July 25 that the number of documents requested by the city, as well as commission staff constraints, were largely responsible for its delayed document release. “The delay in doing so was due to the breadth of the city’s requests, the volume of records to be located and reviewed, and the limited availability of staff resources to conduct a comprehensive search and review,” stated Karen Clopton, commission interim general counsel. The city agreed to drop its public records complaint in superior court after the records were forwarded. After reviewing the documents, San Bruno urged commission president Mike Peevey to recuse himself from voting on his staff’s proposed $2.5 billion penalty for PG&E because the city alleges he is partial to the utility. As part of the ongoing commission proceeding, San Bruno is set to make a filing calling on Peevey to recuse himself from the final vote on the penalty pending at the CPUC. San Bruno wants PG&E executives sanctioned for what it considers illicit exchanges with regulators. The city seeks to “ensure the safety of PG&E’s gas pipelines so that what happened in San Bruno never happens again anywhere.” During a July 31 earnings report to the financial community, the utility said responses to the filing are due August 12. Whether a ruling on the issue will be part of the pending penalty case at the CPUC or be addressed separately is not known, Chris Johns, PG&E president told the financial community. “N ow nobody is asking for a delay in the proposed decision,” he added. The CPUC stated July 31 the administrative law judges’ competing decisions are to be out within 60 days. The commission stated that it “takes seriously all allegations of bias and rule violations and will evaluate the motions” filed by San Bruno. Improper welding, deficient pipes and shoddy recordkeeping were found to be key reasons for the 2010 explosion. In May 2013, the commission safety division recommended the unprecedented fine after finding the blast was “entirely foreseeable and preventable” (Current, May 10, 2013). San Bruno also wants Gov. Jerry Brown to strip Peevey of his presidency before his second six-year term sunsets at the end of this year. “The situation is urgent,” said Connie Jackson, San Bruno city manager.

Share this story

Not a member yet?

Subscribe Now