PG&E threatened with fines by PUC 'Inexcusable' refusal to provide documents, PUC says

Image 1 of / 1 Caption Close PG&E threatened with fines by PUC 1 / 1 Back to Gallery

California regulators threatened to impose fines Wednesday against Pacific Gas & Electric for what they said was PG&E's "inexcusable" refusal to turn over documentation despite orders to justify safe pressure levels for untested gas transmission lines.

Under a deadline Tuesday, the utility had provided an accounting to regulators in which it said about one-quarter of its 1,805-mile urban system was safe based on pressure levels set under a 1970 law. It did not provide any engineering documents to support the safety of those lines, as demanded by federal investigators after inadequate record-keeping by the utility came to light following the deadly Sept. 9 San Bruno pipeline blast that killed eight people and destroyed 38 homes.

"PG&E's willful noncompliance of our direct order may put public safety at risk," said Paul Clanon, executive director of the state Public Utilities Commission. Clanon said he had sent a letter to the president of PG&E demanding documents not turned over by Tuesday's deadline. "PG&E must do its part by fully and timely complying with our orders, or face penalties."

In that letter, Clanon disputed PG&E's filing, in which it bases safe levels for 455 miles of lines on the highest operating pressure over a five-year period, as set out by the 1970 law - known as "grandfathering" of old pipes. "PG&E has no legitimate or good faith basis for the conclusion," Clanon wrote toPG&E President Chris Johns, citing the National Transportation Safety Board's stance that documentation "other than the grandfathering method described in PG&E's response," must be provided to vouch for safe pressure levels.

"By its action, PG&E is not only refusing to comply with the plain terms of the commission's orders and the NTSB's urgent safety recommendations, but worse, may be placing public safety in jeopardy," Clanon wrote. "This is particularly inexcusable in the wake of the tragedy at San Bruno."

Seeking fines

All told, PG&E could not provide documents to support pressure levels - other than by way of the grandfathering rules for the 455 miles - on nearly one-third, or 600 miles of its 1,805-mile urban area transmission system in Central and Northern California.

At its March 24 commission meeting, Clanon said, regulators will recommend that the panel move to seek fines for deliberate noncompliance. The PUC has the authority to impose fines of $20,000 per violation per day. Multiple instances could add up to $1 million a day or more, according to the PUC.

Assemblyman Jerry Hill, whose district includes San Bruno, said he spoke to Clanon, who is most concerned that the utility did not turn over any data to support safety on about 140 miles, or roughly 8 percent, of its system. That is on top of the 455 miles of lines whose safety was based on the 1970 law.

"I think this is a welcomed and appropriate course of action," Hill said.

PG&E spokesman Joe Molica said Wednesday that the utility has launched an "aggressive" effort to test or replace lines in question, but is "not satisfied" with results of its records check and knows "we have more work to do." Molica said the utility has come up with "key records" for all but 8 percent of its system.

Possible pressure cuts

The utility's record search comes as it is trying to head off threatened state orders to slash gas levels on transmission lines that are missing records to prove they are safe, arguing that such a move could hamper its ability to serve customers and even endanger public safety.

Clanon made no mention in the letter of possible pressure cuts looming for lines that cannot be justified as operating safely, but PUC spokeswoman Terrie Prosper said "we're strongly considering further pressure reduction orders."

On Tuesday, PG&E said it planned to test about 200 miles of its system, including many of the lines that had not been previously tested, with high-pressure water.

The company acknowledged that it has not been able to find records on the 140 miles of line, which include several miles of a pipe running from San Bruno into San Francisco and a stretch under Highway 101 in San Francisco.

In a filing with the state agency, PG&E noted that it had already reduced pressure on about 190 miles of pipeline in Northern and Central California for which regulators expressed concern about the pipes' ability to operate safely.

"Additional reductions could compromise PG&E's ability to execute substantial planned pressure testing this year," the company said. "Even more significant, further pressure reductions could jeopardize PG&E's ability to meet customers' natural gas needs and may create serious public safety risks."

Creating hardship

PG&E suggested it would create a hardship to cut the pressure on miles it intends to test with high-pressure water this year, which include 80 miles of major "backbone" lines running from the Arizona and Oregon borders into the Bay Area network.

The company raised the specter of pilot lights in houses going dark and gas seeping back into houses in uncontrolled outages if it has to cut back on such lines. To avoid that, PG&E said, it might impose "controlled curtailments" of gas service to businesses and homes.

"Natural gas service can only safely be restored on a customer-by-customer basis" after such a controlled outage, PG&E said in its filing. Relighting pilot lights, checking appliances and inspecting for leaks is a process that could "take weeks or even months," PG&E said.

Richard Kuprewicz, an independent pipeline safety consultant in Redmond, Wash., said PG&E might be overstating the danger of gas shortages if it is forced to curtail pressures on individual lines, given the typical redundancy in transmission systems.

Neighborhood and business district customers are typically served by smaller distribution systems that are fed by multiple transmission lines, Kuprewicz said.

"This is a transmission line - it is not hooked up directly to hospitals and schools," Kuprewicz said. "Your local homeowner isn't hooked into a transmission line."

He noted that the alternative to slashing gas levels is maintaining the existing pressure on possibly unsafe pipelines. And "if you rupture, you are down and you are not coming back for a long time," Kuprewicz said.