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Utility to Pay $70M in Pipeline Blast

Tuesday, March 13, 2012

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Pacific Gas & Electric will pay more than $70 million to the City of San Bruno, CA, as restitution for one of the nation’s deadliest pipeline explosions, which leveled a neighborhood and killed eight people in 2010.

 San Bruno Fire Department

 San Bruno Fire Department

The explosion hurled a 28-foot section of pipeline 100 feet, destroyed dozens of homes and killed eight people.

The utility and the city announced the agreement on Monday, just as the California Public Utilities Commission released two new reports calling PG&E’s pipeline safety records “a mess.”

Tab Mounts

The $70 million municipal restitution package, which the parties called unprecedented, is in addition to an earlier commitment by PG&E to fund replacement and repair of the city’s infrastructure and other costs related to the accident and restoration of the neighborhood.

That fund, which had been capped at $70 million, will now be capped at $50 million as part of the restitution agreement, officials said.

PG&E still faces claims from dozens of civil lawsuits, and the City of San Bruno has said it will also seek a share of the fines CPUC is expected to impose on PG&E in the case. The utility has said it expects fines totaling more than $200 million.

PG&E agreed to pay the restitution money within 30 days and will not seek to recover the funds through insurance or customer rates.

‘We Will Help the Victims’

The city will establish a not-for-profit public purpose entity to manage the funds and determine how they should be spent. The funds are more than twice the city’s annual budget.

“The community of San Bruno has suffered through a terrible tragedy, and we understand that this accident will affect this community forever,” PG&E President Chris Johns said in a video interview.

“We committed the night of the tragedy and continue to commit that we will help the victims and the community heal and rebuild. Today's announcement is another step in that process.”

‘Integrity Management without Integrity’

The explosion Sept. 9, 2010, caused a 28-foot-long rupture in PG&E’s 30-inch-diameter Line 132. The explosion blew open a crater 72 feet long and 26 feet wide, launching the ruptured section 100 feet. Dozens of homes were destroyed, and eight people were killed.



Substandard, poorly welded pipeline was cited in the blast. PG&E’s shoddy recordkeeping makes it impossible to determine if substandard pipe is elsewhere in its system, officials said.

Subsequent state and federal investigations uncovered a host of factors in the blast, portraying the utility as a company that put profits above safety with shoddy records, inadequate inspection and testing, and—in the words of one federal safety official—“an integrity management program without integrity.”

The blast was traced directly to the use of a substandard, poorly welded pipe section that investigators said should never have been installed—and whose use should have been discovered later by appropriate record-keeping, testing and inspection. PG&E’s records described the pipe as seamless.

An investigation by The San Francisco Chronicle found that the utility had recorded dozens of leaks along the doomed line in the decades before the blast. A dozen lines in the system “had a total of more than 100 leaks that the company never accounted for,” the newspaper reported. “None, however, had more unexplained leaks in its history than Line 132.”

‘Scattered, Disorganized’ Records

Also Monday, CPUC released two reports that detailed widespread lapses by PG&E in keeping records on its thousands of miles of high-pressure gas transmission lines.

The records are so incomplete that there is no way to tell whether other substandard pipe was installed in the system and that officials have no reliable basis for making decisions on pipeline maintenance or replacement, the reports said,

“The reports conclude that PG&E’s gas transmission records and safety related documents were scattered, disorganized, duplicated, and were difficult, if not impossible, to access in a prompt and efficient manner,” said CPUC, whose Consumer Protection and Safety Division (CPSD) gathered the information as part of the utility’s effort to assess penalties in the case.

Before the 2010 rupture, “PG&E stored its pipeline records for any given job in up to 10 different locations, without the necessary document control processes in place to track their location, existence, or contents,” CPSD found.
“PG&E failed to keep and maintain information needed to promote gas safety.”  Alleged recordkeeping failures “include the location of re-used pipe in service, numbers and conditions of leaks, pressure information, and other information critical to pipeline safety,” the commission said.

Concluded one report: "In lay terms, PG&E's record keeping was in a mess and had been for years.”


Tagged categories: Explosions; Health and safety; Pipeline

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