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San Bruno Seeks Court-Appointed Overseer for PG&E

| August 18, 2014
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A crater filled with water marks the site of the San Bruno pipeline explosion in September 2010. (Max Whittaker/Getty Images)

A crater filled with water marks the site of the San Bruno pipeline explosion in September 2010. (Max Whittaker/Getty Images)

San Bruno’s mayor and city manager are calling for court-imposed oversight of PG&E as part of the penalty for federal criminal charges stemming from the 2010 pipeline explosion that killed eight of the city’s residents and destroyed 38 homes.

“We have no faith in the [California Public Utilities Commission] to ensure safety improvements will be made,” San Bruno Mayor Jim Ruane wrote in a statement. “An Independent Monitor is critical to ensure public safety and restore public confidence.”

The mayor’s statement was backed up by a letter (embedded below) from City Manager Connie Jackson to Melinda Haag, the U.S. attorney for Northern California, asking that federal prosecutors seek appointment of an independent monitor if PG&E is convicted under a revised criminal indictment.

In a hearing Monday, PG&E’s attorney entered not-guilty pleas on the expanded indictment. The charges include 27 alleged violations of the Natural Gas Pipeline Safety Act of 1968 and one count of obstruction of justice claiming the company misled federal investigators probing the cause of the explosion.

“The issue that was raised as part of the obstruction allegation is that we had a paperwork error,” PG&E spokesman Greg Snapper said. “We fixed it. That was three years ago. That fix to the error has been out in the public domain for three years. We still maintain that no employee did anything wrong. No one violated the Pipeline Safety Act. No one broke any laws.”

If found guilty, PG&E could face more than $1 billion in criminal fines, in addition to nearly $2.5 billion in fines under consideration by the California Public Utilities Commission.

The call for independent supervision is directed in part at the CPUC, which San Bruno leaders say is too close to the utility it is supposed to oversee.

“We do not trust the CPUC to perform its statutory function,” City Manager Jackson said after Monday’s arraignment. “They continue to perpetuate an inappropriate, too-cozy relationship with the utility they are tasked with regulating.”

Jackson said correspondence between employees at PG&E and the commission, obtained through San Bruno public records requests, details a relationship that illustrates a conflict of interest.

The CPUC did not immediately respond to requests for comment.

The San Francisco Chronicle reported Monday on a safety conference ostensibly presented by the CPUC that was substantially organized by PG&E.

From Jaxon Van Derbeken’s article:

Beginning in August 2012, PG&E and its consultants suggested the broad themes for the conference and some of the panels’ talking points, including: “Should our expectations for public safety be specific, understood and agreed to by the parties or should they be mandated by the regulator?” At least two PG&E executives were to speak at the symposium.

It was PG&E’s idea to invite [National Transportation Safety Board Chairwoman Deborah] Hersman, the e-mails show, with one consultant saying he hoped she would underscore that industry-regulator cooperation is “essential to a successful outcome.”

One of the main conference organizers was Laura Doll, PG&E’s regulatory relations director. Before joining the company in 2011, Doll spent three years as deputy policy director at the utilities commission.

Doll was the PG&E official who replied, “Love you,” in an e-mail after [CPUC President Michael] Peevey’s chief of staff provided advice in 2013 on how PG&E could fend off a public request for information about the conference.

That symposium was eventually scrapped after San Bruno legal maneuvers that called CPUC commissioners’ participation into question as they debate a nearly $2.5 billion fine for the 2010 pipeline explosion.

“As the safety symposium emails demonstrate, PG&E is actually doing the staff work for the CPUC,” Jackson said. “There’s something really wrong with that.”

Gov. Jerry Brown recently defended Peevey. San Bruno officials are calling for his resignation.

San Bruno officials are also requesting that some money from fines be directed to a state pipeline safety trust that could fund education and advocacy for increasing gas line safety and a requirement that PG&E install fully automated shut-off valves on major pipelines.

A PG&E statement responding to the new indictment notes the company settled claims with victims and families of the San Bruno explosion for more than $500 million and has contributed more than $100 million to city recovery efforts.

San Bruno officials say they’re not seeking more compensation for their city. Instead, Jackson’s letter to U.S. Attorney Haag says, “Our abiding interest has been to assure that the necessary changes and improvements are made so that what happened in San Bruno does not happen again, anywhere.”

Read the letter below, followed by the most recent indictment:

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