Category Archives: San Bruno

Gov. Brown signs 3 bills tightening pipeline safety

Three bills that will tighten safety restrictions on natural gas pipelines as well as prioritize revenue for upgrades instead of executive compensation were signed into law Sunday by Gov. Jerry Brown.

Brown signed 34 pieces of legislation Sunday, including Assembly Bills 578, 861 and 1456, all sponsored by Assemblyman Jerry Hill, D-San Mateo.

Hill’s district includes the Crestmoor neighborhood in San Bruno, which was devastated when a PG&E natural gas pipeline exploded in September 2010. The blast and subsequent fire killed eight people and destroyed dozens of homes. Hill has made it a priority to increase regulations on utility companies to prevent another disaster.

AB 578 will require the California Public Utilities Commission, the agency that oversees and regulates utilities, to adopt the standards set forth by the National Transportation Safety Board. If the commission opts not to adopt the standards, it must submit reasons for the decision in writing.

Provisions under AB 861 would “ensure utilities don’t cut corners on safety and maintenance in order to convert ratepayer dollars into bonuses for executives,” according to Hill.

The assemblyman said company executives often receive big payouts even when there are pipelines that need to be replaced and standards that need to be upgraded.

With AB 1456, the CPUC will be required to adopt performance metrics for pipeline safety and will have the power to levy fines to those utilities that are found to be performing poorly.

Hill is scheduled to host a news conference announcing the signing of the legislation at the CPUC building in San Francisco at 10 a.m. today.

Bill would earmark PG&E fines for better pipelines

Two Bay Area lawmakers want to use revenue raised from fines leveled against Pacific Gas & Electric Co. – in connection with 2010’s San Bruno gas line explosion – to pay for upgrades to the utility’s transmission system, saying the move will save ratepayers hundreds of millions of dollars.

Under current state law, any fine assessed by the California Public Utilities Commission goes to the state’s general spending account, which pays for schools, prisons and other state programs.

Assemblyman Jerry Hill, D-San Mateo, on Tuesday introduced legislation that would dedicate money raised from the explosion fines to pipeline upgrades. The measure is co-authored by San Francisco Democratic Sen. Mark Leno.

Hill said state regulators are expected to level at least $200 million – and probably far more – in penalties against the utility in connection with the deadly explosion. If that money is used for pipeline replacement instead of general state spending, he said, ratepayers would save at least $660 million.

“PG&E should not be allowed to profit from what has occurred,” Hill said. “The way it works now … PG&E will borrow the money for capital improvement costs and ratepayers will have to pay the principal back as well as interest.”

But the PUC also has authorized PG&E to grant its shareholders an 11.35 percent profit on its capital improvement projects – money that gets taxed. All these costs are to be paid for by ratepayers unless the bill passes.

Hill said that when you add up all of the additional costs, every dollar of penalty money spent on pipeline upgrades will save ratepayers $3 to $4.

“To me, those ratepayers within the PG&E service area are ones who have suffered the most … by living with an unsafe pipeline system,” he said. “I feel that those are the ratepayers who should benefit, or at least be made whole, from the penalties related to San Bruno.”

The PUC has not yet assessed fines against PG&E in connection with the San Bruno incident, which killed eight people and destroyed 38 homes. But the utility’s managers set aside $200 million last year, saying they expect penalties could top that amount when three separate state investigations are complete.

Hill said PG&E is expected to spend more than $5 billion, including interest, over the next 50 years upgrading its transmission system to comply with federal recommendations.

Brian Swanson, a PG&E spokesman, said the utility has not taken a position on the bill but supports the concept.



PG&E Names New Executive to Gas Pipeline Team

PG&E added another executive to its gas operations team to help rebuild the company following the 2010 pipeline explosion in San Bruno.

Jesus Soto Jr., who is currently the vice president of operation services for El Paso Corp.’s pipeline group, will now become PG&E’s senior vice president of gas transmission, operations, engineering and pipeline integrity.

In his new role, Soto Jr. will be responsible for four areas for the company:

  • public safety and integrity management;
  • project engineering, design and management;
  • gas transmission; and
  • gas system operations.

“PG&E and our customers are fortunate to have someone with such a strong background working to make our system the best in the country,” said Nick Stavropoulos, PG&E’s executive vice president of gas operations, who was recently hired himself to help chart a new path for the utility following the San Bruno disaster. “We have already made excellent progress in turning our operations around, and there is still more to do. I have every confidence Jesus will play a major role in meeting this challenge.”

PG&E has been steadily making strides to revamp its pipeline operations by bringing in Stavropoulos and new CEO Anthony Earley and following through on the pipeline safety recommendations the National Transportation Safety Board issued following the explosion.

The utility also is trying to get a $2.2 billion plan approved by the California Public Utilities Commission to modernize its pipeline system throughout the state.

Meanwhile, PG&E has still been beset with problems stemming from its pipeline operations.

The CPUC recently fined PG&E $3 million for failing to comply with the commission’s orders to provide records for its gas transmission pipelines following the explosion. The company has set aside another $200 million for pending fines that are expected for the explosion.

More than 250 people have filed lawsuits against PG&E for the explosion, and the jury trial starts in July. The lawsuits are expected to be costly.

PG&E also just reached a settlement with the city for $70 million as restitution for the fire.

Soto said he hopes to help turn the company’s operations around.

“I look forward to quickly integrating myself into the PG&E Gas Operations organization and reinforcing a team and a culture that are driven to operational excellence anchored in public, employee and contractor safety, facility integrity, regulatory compliance and system reliability,” he said in a statement.


State Hearing to Focus on Increasing Funding for CA Public Utilities Commission

The California Public Utilities Commission is seeking to add seven new positions to its gas safety division 

A state assemblyman will be leading a hearing today to talk about possibly beefing up state regulators’ ability to oversee pipeline safety in the wake of the 2010 San Bruno pipeline explosion.

Assemblyman Rich Gordon, D-Menlo Park, who chairs the Assembly Budget Subcommittee on Resources and Transportation, will be conducting the hearing from 9 a.m. to noon in the state capitol. The legislators will be reviewing the increased funding the California Public Utilities Commission has received to strengthen its safety oversight and enforcement over gas, electric, communications and rail public utilities throughout the state.

In particular, Gov. Jerry Brown’s budget proposes a budget of $5.896 million for the commission and increasing its staff to 41 people, which would include seven new positions in its gas safety division and an additional $300,000 to build a gas safety database.

Investigators and critics blasted the CPUC after the PG&E pipeline explosion in the Crestmoor neighborhood because it only had nine inspectors, who were each responsible for overseeing the safety of an average of 11,000 miles of pipeline.

The CPUC has since added nine more safety inspectors—a move that reflects a change in the culture of the commission, according to a staff report that explained the increased funding.

The “CPUC admits that policy objectives took priority over safety prior to the San Bruno explosion,” the staff report said. The “CPUC’s reactive safety strategy, premised on the assumption that utilities recognized public safety as their top priority, was inherently misguided.”


Pipeline regulators propose broader public access

The California Public Utilities Commission on Monday proposed opening up public access to most records under the agency’s purview, a dramatic shift that would allow Californians to view documents detailing the safety records of natural-gas pipelines running under their neighborhoods.

The move comes 18 months after the explosion of a Pacific Gas and Electric Co. pipeline in San Bruno that killed eight people, and four months after a Chronicle investigation revealed that the vast majority of documents at the commission are barred from public access, including investigation reports on natural-gas pipeline accidents and safety audits of utilities such as PG&E.

The practice of shielding documents from public view spawned criticism by victims of the explosion and others, and prompted Sen. Leland Yee, D-San Francisco, to write a bill requiring such disclosure.

On Monday, Yee called the utilities commission’s proposal a “good first step.”

Terrie Prosper, a spokeswoman for the commission, said the proposed change would improve public access to records. “The public should have the widest possible access to information we possess,” she said.

In a written statement, the commission added that its public access regulations are “outdated and cumbersome, and often delay rather than facilitate access to records requested.”

A 60-page draft resolution, which the five members of the utilities commission will vote on in May, would change the agency’s rules to make documents publicly available unless a utility can show why the records should be hidden from view.

Currently, regulations require a vote of the commission before any unreleased paperwork may be made public – a vote that comes after the panel consults with utilities.

The proposal calls for automatically disclosing the outcomes of safety-related investigations and creating an online index of the commission’s available records and an online “safety portal” that houses all safety-related records.

California law now exempts the utilities commission from the state’s public records law, a contrast to other states, where such documents are routinely available.

Yee said the commission’s announcement is a good starting place but that his proposal, SB1000, should still move forward.

That legislation would repeal a 1951 state law exempting the agency from the state’s Public Records Act unless the commissioners vote to allow public access to specific documents.

“The fact that CPUC is willing to do much more than they are doing right now to be open and transparent – I think that’s a good thing,” Yee said. “But the best step is to support my bill and to pass it.”

To view the proposed regulations, go to: 


Calif. may lower fines for utility in fatal blast

A state administrative judge is proposing to fine a utility under fire for the deadly San Bruno pipeline explosion only $3 million, rather than going with a prior plan to charge Pacific Gas & Electric Co. $1 million each day for shoddy record-keeping.

A California Public Utilities Commission judge issued the proposal Wednesday, but it still needs approval by the commission before taking effect.

After a settlement was reached last year, the judge’s proposal would significantly lower the company’s penalties from the original proposal made by the commission’s executive director.

That plan would have fined PG&E $1 million a day for failing to hand over key safety records about its transmission lines, including for sections of the gas line that ruptured in San Bruno.


$67 million requested for pipeline safety

Federal pipeline safety programs would get an extra $67 million and nearly 120 new employees under a proposal President Obama announced Monday that brought cheers from safety advocates pushing to address accidents and growing safety concerns.

The request, part of the president’s $3.8 trillion plan, would almost double the number of enforcement agents nationwide, according to the Pipeline and Hazardous Materials Safety Administration. The increase also would cover improvements from research to accident investigation to information databases, according to an agency news release.

Pennsylvania safety officials and advocates and the national safety group Pipeline Safety Trust all urged Congress to approve the funding, though Republican leaders have said the president’s budget will be dead on arrival there.

Obama’s plan doesn’t provide a comprehensive solution to several key issues as the state’s pipeline system expands to handle the rush of shale gas, several officials said.

“It is helpful, but there are still huge gaps in pipeline safety,” said Myron Arnowitt, Pennsylvania director of Clean Water Action.

The Obama administration has been pushing for safety system upgrades for more than a year in light of deadly explosions in Allentown, Philadelphia and suburban San Francisco.

Pennsylvania has a growing expanse of pipeline from shale gas development and one of the country’s oldest home heating gas transport and distribution systems. Utility and pipeline companies were spending about $800 million annually going into 2011 to beef up the system, in part to meet increasing federal safety demands.

State lawmakers in December passed rules that will allow them to receive federal funding and hire 12 to 15 inspectors. The Public Utility Commission still wants Congress to pass the increase as part of a general need to improve safety, spokeswoman Jennifer Kocher said.

The state has 60,000 miles of pipe, and drillers could add 25,000 miles, according to federal figures and a report from the Nature Conservancy, an Arlington, Va.-based advocacy group. Nationwide, there were 10 pipeline incidents causing six deaths, seven injuries and more than $4.2 million in damage last year, according to the Pipeline and Hazardous Materials Safety Administration’s online database.

City of San Francisco sues to force feds to improve pipeline safety

The city of San Francisco took the unusual step Tuesday of asking a judge to force federal natural-gas safety regulators to step up efforts in California, saying the government “abjectly failed” to enforce pipeline laws before and after the 2010 explosion that devastated a San Bruno neighborhood.

At issue in City Attorney Dennis Herrera’s lawsuit, filed in U.S. District Court in San Francisco, is the performance of the little-known U.S. Pipeline and Hazardous Materials Safety Administration. Although it is charged with enforcing federal safety law, the agency relies on states to do much of its oversight.

Herrera’s suit says federal officials never set standards and let California’s enforcement dwindle in the years leading up to the September 2010 explosion of a PG&E pipeline in San Bruno.

‘Blind trust in operators’

In its investigative report on the blast, which killed eight people and destroyed 38 homes, the National Transportation Safety Board recommended that the pipeline agency tighten regulations on operators. The board’s chairwoman, Deborah Hersman, said PG&E had “exploited weaknesses in a lax system of oversight, and regulatory agencies that placed a blind trust in operators to the detriment of public safety.”

Herrera’s lawsuit echoes those findings, saying the pipeline agency stood by for more than a decade while the California Public Utilities Commission failed to detect PG&E’s safety problems, questionable pipeline-management practices and shoddy record keeping.

The state agency allowed utilities to police and report their own safety violations in lieu of being fined. The agency has changed its approach since the San Bruno disaster and recently proposed a $16.8 million penalty against PG&E for failing to conduct leak inspections on several miles of gas distribution pipelines in the East Bay.

“In the absence of any meaningful oversight by PHMSA, the CPUC has, for decades, forsaken its duty to enforce federal pipeline safety standards,” the city said in its suit. Under those circumstances, the suit said, “it is not a question of if another pipeline will explode, but a question of when.”

The pipeline safety agency issued a statement Tuesday declining to comment on the lawsuit but stressing its “core” commitment to safety.

“That’s why we devoted hundreds of hours of staff support and technical expertise to the NTSB and the California Public Utilities Commission to understand the San Bruno tragedy,” the agency said.

Failure to monitor

The suit said the federal government’s failures were putting San Franciscans at risk. It is the first time a local government has sought stricter regulation from the pipeline safety agency, said Rick Kessler, a lobbyist for the Pipeline Safety Trust, a nonprofit that focuses on safety improvements.

“If this brings better oversight and enforcement,” he said, “I applaud it.”

The suit seeks a court order to compel federal pipeline safety officials to set performance standards for state regulators who oversee gas transmission lines.

According to the complaint, the U.S. pipeline agency gave California $1.3 million in 2010 to oversee pipeline safety, yet “never meaningfully evaluated” how the money was spent or measured the effectiveness of the state’s program.

Federal officials knew California’s enforcement efforts had been understaffed since 1998, the suit said, resulting in a small proportion of federal funding being allocated to the state. Inspections became so infrequent by 2006 that the pipeline agency warned the Public Utilities Commission that California was jeopardizing public safety.

The explosion of a gas distribution pipeline in Cupertino in August, in which a condominium was destroyed, is evidence that the federal government hasn’t done enough to strengthen its regulatory efforts since the San Bruno disaster, the suit said.

That explosion happened because of a leak in a notoriously brittle type of 1970s-era plastic pipe, which the government recommended in 1998 that pipeline operators replace. Regulators have never ordered companies to do so, though.

Giving up authority

The federal agency, “for all practical purposes, has allowed gas pipeline operators like PG&E to regulate themselves and, in doing so, has improperly delegated its authority to enforce federal pipeline safety standards to those operators,” the suit said.

Although Herrera earlier threatened to sue the Public Utilities Commission as well, he said Tuesday that the state agency has improved its oversight of PG&E since 2010.

“We are participating in the administrative process to make sure the CPUC follows through on its pledge,” Herrera said in an interview.

PG&E had no comment on the suit except to emphasize actions it has taken since the San Bruno explosion to try to make its gas system safer.


PG&E chairman announces company will spend millions on improvements

Utility to spend nearly $400 million on gas and electrical infrastructure in an effort to repair its tarnished reputation.

Acknowledging that the company’s reputation is “in tatters,” PG&E’s new Chairman and Chief Executive Officer Anthony Earley announced Thursday the utility will spend $400 million over the next two years to improve its electrical and natural gas infrastructure.

Earley, who took charge of PG&E in August, spent an hour with the Editorial Board of The Tribune outlining the changes he plans to make to restore customer trust in the utility in the aftermath of the deadly natural gas pipeline explosion in San Bruno and questions about the seismic safety of Diablo Canyon nuclear power plant.

“We have to delight our customers,” he said. “Our reputation is in such tatters that we cannot afford to just satisfy our customers.”

Earley estimated it will take three to five years to restore trust in the utility “one customer, one constituency at a time.”

He also met with Diablo Canyon employees and urged them not to become complacent about safety.

Earley said the utility plans to hire a new chief nuclear officer who will focus solely on Diablo Canyon. Current chief nuclear officer John Conway also oversees electrical generation and splits his time between Diablo Canyon and company headquarters in San Francisco.

The new nuclear officer will be stationed at Diablo Canyon and will fill an intermediary position between Conway and plant manager Jim Becker. Earley did not say when the position would be filled, but said the utility is looking at candidates both inside and outside the company.

While management of the utility’s largest asset, Diablo Canyon, is ranked among the best in the nation, the company’s level of customer satisfaction, distribution system maintenance and speed of service are among the third and fourth quartiles of the industry, Earley said.

Chief among PG&E’s woes is the September 2010 pipeline explosion in San Bruno that killed eight people. Investigations have since revealed that the company’s pipeline record keeping was a shambles; the utility just recently admitted further gaps in its pipeline survey maps.

“As the San Bruno tragedy showed, if you don’t invest in infrastructure, you are going to have very serious problems,” he said. PG&E does not deliver natural gas in San Luis Obispo County; Southern California Gas Co. does.

Concerning Diablo Canyon, seismic safety and storage of highly radioactive used reactor fuel are two of the community’s biggest concerns. The utility is in the midst of performing $64 million in seismic studies to determine the earthquake potential of the faults surrounding the plant.

Earley said he supports the recommendations of a federal committee that has proposed the establishment of several temporary regional storage sites to take spent fuel from the nation’s 104 nuclear reactors. With abandonment of plans to build a federal repository at Yucca Mountain in Nevada, Diablo Canyon’s spent fuel will be stored onsite for the foreseeable future.

Citing the nuclear industry’s need to coordinate with federal regulators, Earley declined to make any promises that PG&E would lower the density of fuel assemblies stored in Diablo Canyon’s spent fuel pools by accelerating their transfer to dry casks. The pools are near their storage capacity, and PG&E has considered as a safety precaution reducing the density — possibly as low as 600 assemblies per pool — but not to their original, low-density configuration of 270 assemblies.

Earley also wouldn’t promise that the utility would meet a summer deadline to sign over property it owns in Wild Cherry Canyon behind Avila Beach to create a 65 percent addition to Montaña de Oro State Park.

“The concept is great,” he said, but added he has not had enough time to get up to speed on the project.

PG&E is the largest private employer in San Luis Obispo County with 1,500 employees. Approximately 1,400 of these work at Diablo Canyon. The utility has nearly 15 million customers in Northern and Central California.


Bill package targets gas pipeline safety

A state lawmaker who represents the San Bruno neighborhood devastated by a natural-gas explosion in 2010 introduced a package of bills Monday designed to prevent a repeat of the disaster, including one that would tie Pacific Gas and Electric Co.’s rates to its safety performance.

Assemblyman Jerry Hill, D-San Mateo, whose district includes the Crestmoor neighborhood where the PG&E gas explosion killed eight people, said the bills would build on recently enacted state laws mandating that pipeline operators pressure-test their gas lines, install emergency automatic shutoff valves on pipes and improve their emergency response protocols.

“Much work remains to be done … to prevent another disaster,” Hill said at a press conference outside the San Francisco offices of the California Public Utilities Commission, the agency that regulates PG&E and other pipeline operators in the state.

The package of three bills would:

— Require the PUC and pipeline operators to implement “in a timely manner” any gas-safety recommendations made by the National Transportation Safety Board.

— Require the commission to create a protection program for utility employees who disclose public safety threats.

— Order the PUC to consider the safety performance of PG&E and other utilities in setting gas rates that the companies can charge their customers.

Bill died last year

Hill introduced similar profit-limiting legislation last year, only to have it die in a Senate committee. “I vow to bring that legislation back every year until it is passed and signed by the governor,” he said.

Until recently, he said, PG&E was “gambling with the public safety – less money spent on pipeline safety inspections and pipeline replacements meant more money for profits.”

Hill said his bill tying gas rates to safety, AB1456, would “prevent this gamble from happening.” He said he was encouraged that the commission will hold a workshop Wednesday to determine how to consider safety performance in setting rates.

“The commission may be on its way to transforming itself from the lapdog it’s been to the bulldog it needs to be,” Hill said.

Hill’s legislation on adopting the National Transportation Safety Board’s gas safety recommendations, AB578, comes five months after the federal agency issued about a dozen recommendations to PG&E and the utilities commission in response to the San Bruno disaster. The board said a long history of mismanagement by PG&E of its gas system had caused the fatal explosion, and that the PUC hadn’t done enough to police the company.

Hill noted that the commission had “routinely ignored” past safety board recommendations, including that gas utilities install automatic shutoff valves on gas pipelines and replace a potentially brittle type of plastic distribution pipe, known as Aldyl-A, that was implicated in two PG&E explosions last year.

After those blasts in Cupertino and the Sacramento suburb of Roseville, PG&E announced plans to replace all 1,200 miles of its Aldyl-A pipe.

State says it’s acting

The PUC issued a statement Monday that outlined how it is complying with safety board recommendations, including requiring pressure testing of pipes, cutting pressure on gas lines whose maximum levels are in doubt, ordering records reviews and implementing a program to cite utilities promptly for safety violations.

Hill’s third bill, AB1197, would bar utilities from retaliating against workers who blow the whistle on safety problems.

PG&E spokesman David Eisenhauer said the company would be giving Hill’s measures “the attention they deserve.”

He said PG&E is already encouraging its employees to identify safety problems and said the company already prohibits retaliation against workers for raising concerns.

“Our leadership is actively requesting employees to share that information so we can investigate,” Eisenhauer said.