California’s Public Utilities Commission is weighing major penalties against Pacific Gas & Electric after a staff investigation turned up numerous violations of laws, regulations and standards leading up to the deadly San Bruno explosion of 2010.
|A large section of ruptured pipe rests on the street where it was blown out of PG&E's burried system Sept. 9, 2010, in a California neighborhood.|
CPUC voted unanimously to open a “penalty consideration case” in the wake of a report by the agency’s Consumer Protection and Safety Division. The move clears the way for formal enforcement action and “significant penalties” against one of the nation’s largest utility companies, the commission said.
The 176-page staff report, released Jan. 12, details a company shoddy in record-keeping, unprepared for emergencies, indifferent to regulations, and focused on profits over safety.
Those factors all fed into the catastrophic San Bruno natural-gas pipeline explosion Sept. 9, 2010, that leveled scores of homes and businesses and killed eight people, the report concluded.
The report’s allegations against the utility include:
• Failure to follow accepted industry practice when installing the section of pipe that failed;
• Failure to comply with federal pipeline integrity management requirements;
• Inadequate record-keeping practices;
• Deficiencies in data collection and reporting systems;
• Inadequate procedures to handle emergencies and abnormal conditions;
• Deficient emergency response actions after the incident; and
• “A systemic failure of PG&E's corporate culture that emphasized profits over safety.”
The report was the third by an independent organization to paint a detailed, damning picture of PG&E’s practices.
In June 2011, an Independent Review Panel appointed by the commission concluded that the San Bruno disaster was "a consequence of multiple weaknesses in PG&E's management and oversight of the safety of its gas transmission system," and that the CPUC lacked the resources to adequately monitor the utility.
|Firefighters approach the blaze that claimed eight lives and gutted more than 70 homes and businesses in San Bruno.|
In August, a National Transportation Safety Board report traced the accident to inadequate quality assurance and quality control when the pipe was installed in 1956 and, since then, to an inadequate pipeline integrity management program that failed to detect, repair or remove the defective pipe.
NTSB also criticized exemptions granted to PG&E for pressure testing of the line, which likely would have detected the defects. PG&E was also criticized for lack of remote-control shutoff valves and for its slow response to the disaster.
Wide Investigation Scope
CPUC said its evaluation of PG&E “will not be solely limited to the events that took place on Sept. 9, 2010, but will include all past operations, practices and other events or courses of conduct that could have led to or contributed to the pipeline rupture in San Bruno.”
Given the NTSB’s conclusions about decisions made in 1956, and numerous reports since then about years of record-keeping problems, decades of PG&E practices could be put under the CPUC’s microscope.
The commission said it would “specifically consider what monetary fines and other remedies are appropriate to ensure that a catastrophe of this type does not occur again.”
‘Giving PG&E Its Day in Court’
CPUC President Michael R. Peevey said the three reports had provided “sufficient information and good cause” to move to the penalty phase.
"We are now, essentially, giving PG&E its day in court,” Peevey said. “If we determine PG&E has violated the law, we are prepared to impose very significant fines."
Commissioner Timothy Alan Simon, who also serves on a federal-level Pipeline Safety Task Force, predicted that the investigation would “show utilities the need to re-examine their response protocols, risk assessment, and records management for pipeline safety."
The process will include public hearings, officials said.
In a statement, PG&E president Chris Johns pledged cooperation with the new investigation.
“It is clear that PG&E's past gas operations practices were not what they should have been,” said Johns’ statement. “We have admitted these shortcomings, and we are committed to raising the level of pipeline safety to new, higher standards.
“Nothing is more important to us, and our customers, than making sure our operations are as safe as possible. To that end, we have already made fundamental changes to our gas operations and are continuing with our aggressive plan to make further improvements.”
Johns noted that the utility had already begun making some changes recommended in earlier reports, including pressure testing of lines (which caused some ruptures), “installing automated shut-off valves; updating our emergency response plans; and implementing our multi-year pipeline modernization plan …”
He added: "It is clear that our operations can be improved upon, and all of us at PG&E are working hard on that every single day.”
Even after the investigation was announced, however, PG&E continued to stumble, with new admissions of gaffes.
On Tuesday (Jan. 17), the utility admitted that it had lost track of development around more than 300 miles of its gas-transmission lines—a violation of federal law that could result in more fines against the company, according to a report in the San Francisco Chronicle.
CPUC ordered PG&E to check its system after the San Bruno explosion. “Investigators discovered soon after the blast that PG&E hadn't known the characteristics of the pipe that failed, and the company admitted that its record keeping was a shambles,” the Chronicle reported.
(The San Bruno line was described as seamless in PG&E records, but was actually welded—the origin point of the line’s rupture.)
In July, PG&E admitted that it had failed to reclassify 172 miles of its pipeline system “that once ran through rural areas but is now surrounded by houses, schools and shopping malls,” the newspaper said. The change in surrounding development should have subjected that pipeline to stepped-up inspections and pressure limits.
In a commission filing Tuesday, the utility subtracted 10 miles from its earlier total, but added 140 miles to the list of misclassified pipeline. It blamed the oversight on data entry errors.