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PG&E’s Terrible, Horrible, No Good, Very Bad Week

| January 28, 2011
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PG&E — the Rodney Dangerfield of investor-owned utilities with an $18 billion market cap.

Not only did federal, state, and local officials all pile on this week in criticizing the company over its handling of the San Bruno gas explosion, but Gov. Jerry Brown appointed longtime PG&E detractor Mike Florio to the agency in charge of regulating it — an action that may not quite be the equivalent of charging Michael Pollen with oversight of food companies, but is at least in the neighborhood. (Maybe Erin Brockovich will get a call too…)

The train of bad news really started chugging last Friday, when the National Transportation Safety Board said it had discovered a severely stressed weld on a seam of the San Bruno gas pipeline that exploded last year, killing eight people and destroying 38 homes. PG&E’s records had indicated that the weld was seamless. From the Chronicle:

The incomplete weld, experts say, was so inferior as to be substandard even at the time of the pipe’s installation in 1956. Its vulnerability casts further doubt on the validity of the already-questioned pressure peak level, set by PG&E at 400 pounds per square inch, on the line.

PG&E’s records – shown by investigators to be in error – indicated that the line was seamless, when in fact the San Bruno site was part of a cobbled assortment of potentially inferior 4-foot-long seamed pipes of apparently unknown origin. Records for hundreds of miles of pipelines elsewhere in PG&E’s system are now under scrutiny and regulators might compel the use of high-pressure water testing to seek out similar weld flaws.


The weld’s inferior condition was underscored by the Chronicle’s previous discovery that PG&E had increased pressure on the pipeline, as well as on others. Jackie Speier, who represents San Bruno in the House, called the company’s practice of spiking pipeline pressure “Russian roulette.”

This week, NTSB Chairwoman Deborah Hersman blasted PG&E for its shoddy recordkeeping. Again from the Chronicle:

Deborah Hersman described how her investigators learned shortly after the 30-inch transmission pipeline exploded Sept. 9 that PG&E had no clue about the line’s characteristics, and said that to this day the company has been unable to find basic records on the manufacture and 1956 installation of the pipe. By law, companies are supposed to retain such documentation and use it to check for potential threats to pipelines.

“In the years since the pipe was put into service, decisions regarding inspections, operating pressures and risk management plans were all based on facts that were just plain wrong,” Hersman said in a speech in Washington to the National Research Council’s Transportation Research Board, a gathering of thousands of policymakers, researchers, industry officials and academicians.

PG&E’s key mistake was its belief that the pipe had been built without seams. In fact, the pipe had been cobbled together from several pieces and had a poorly welded longitudinal seam that finally ruptured, the safety board said last week.

The tone of Hersman’s comments indicated that the agency could come down hard on PG&E when it issues its final report on the explosion…

Yesterday, Jackie Speier said PG&E President Chris Johns told her that the company can’t find critical documentation on pipeline pressure capacity in many Northern and Central California urban areas.

On Tuesday, Gov. Jerry Brown appointed Mike Florio to the California Public Utilities Commission. Florio was the longtime attorney of TURN, a vocal consumer watchdog group that has frequently opposed the utility. Yesterday, sitting at his first meeting as commissioner, Florio indicated in remarks to reporters that an enforcement proceeding against PG&E was very possible.

The company’s multiplying woes have also been a drag on the reputation of its regulator.Last Tuesday, San Mateo County District Attorney Steve Wagstaffe, who is reviewing the possibility of civil or criminal charges related to the case, complained that the PUC has been slow to turn over documents his office requested. Meanwhile, under pressure from San Francisco City Attorney Dennis Herrera and State Sen. Mark Leno, the commission announced that it will hold public hearings on the disaster.

The PUC took a further hit when the Chronicle’s Matier & Ross reported that the agency had created a foundation to “solicit money from the very companies it is supposed to be keeping an eye on.” Though even TURN and Florio minimized its importance, Assemblyman Jerry Hill (who engaged in a public argument with commission president Mike Peevey two weeks ago) blasted the agency for a conflict of interest.

With hearings scheduled, detractors empowered, civil and criminal charges under consideration, officials on the warpath, and the final NTSB report still to come, the utility may be able to decrease pressure on its pipelines, but is unlikely to do so on itself.

And then there’s the whole SmartMeter thing

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Category: Economy, Environment

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