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PG&E faces heavy fines
March 24, 2011, 03:51 AM By Bill Silverfarb Daily Journal staff

The California Public Utilities Commission is ready to levy fines against Pacific Gas & Electric for "deliberately” not complying with orders to determine safe operating pressures for certain high-risk gas transmission pipelines.

The orders follow National Transportation Safety Board recommendations after the San Bruno gas pipeline explosion and fire in September.

"By its action, PG&E not only is 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,” CPUC’s Executive Director Paul Clanon wrote in a letter dated March 16 to PG&E President Christopher Johns.

The commission meets this morning in San Francisco and CPUC staff is expected to recommend that the commission issue an Order to Show Cause why PG&E should not face fines and penalties for not complying with CPUC orders.

The item is not yet agendized, however.

The commissioners will first vote this morning whether to agendize the item. If it does, a second vote will determine whether commissioners believe PG&E failed to comply with a March 15 deadline to produce hundreds of thousands of documents detailing pressure tests on its more than 1,800 miles of natural gas transmission pipelines in high-risk areas.

PG&E is still missing about 8 percent of the documents it is required to keep and has requested more time to meet CPUC’s order.

U.S. Rep. Jackie Speier, D-San Mateo, blasted the utility yesterday for requesting more time.

"It is unacceptable, even laughable, for a multi-billion dollar, publicly traded utility to plead for more time to get its life-critical records in order,” Speier wrote in a prepared statement. "It is time for the CPUC to fine PG&E for its incompetence ... PG&E needs to pay the fine, fix the system and pay the price.”

Making the system safe immediately must be PG&E’s top priority, Speier wrote in the statement.

Depending on the commission’s vote today, PG&E could face an evidentiary hearing as early as March 28, said CPUC spokesman Andrew Kotch.

The CPUC has statutory authority to levy fines of $20,000 per violation, per day. Multiple instances of wrongdoing could result in fines of $1 million a day or more.

PG&E was ordered to determine the valid maximum allowable operating pressure, MAOP, for certain high-risk gas transmission pipelines using "traceable, verifiable and complete records” for which the utility company was directed to undertake an extensive search.

The utility company reviewed more than 1.25 million documents leading up to the March 15 deadline, said PG&E spokesman Joe Molica.

In a response to the CPUC from PG&E last week, the utility company said it took the commission’s order to be "to identify reliable records confirming the performance of a pressure test or the determination of MAOP based on the historical high operating pressure.”

But CPUC’s Executive Director Paul Clanon said PG&E has no legitimate or good-faith basis for that conclusion.

"As you well know, the whole purpose of the NTSB’s urgent safety recommendations, and for the commission’s directive to PG&E, was to find, to the extent possible, a basis for setting maximum allowable operating pressure by means other than the grandfathering method described in PG&E’s response. This is particularly inexcusable in the wake of the tragedy at San Bruno,” Clanon wrote in a letter to PG&E’s president.

The NTSB requested PG&E to produce detailed documents after looking into why a 30-foot section of line 132 in San Bruno’s Glenview neighborhood exploded on the evening of Sept. 9.

Documents related to line 132 showed that it had seamless welds but an NTSB review of the pipe showed that it did, indeed, have welds.

The inaccurate documents prompted NTSB and then the CPUC to direct PG&E to get its documentation in order.

But some of PG&E’s high-risk pipelines may not have proper documentation, Molica said.

Gas pipes installed before 1970, for instance, had MAOP standards set at historical highs, Molica said. And some documents may not exist for pipes installed before 1961, Molica said. Line 132 in San Bruno was installed in 1956.

Going forward, Molica said, the utility will replace short sections of pipeline for safety purposes rather than test the sections for MAOP.

The utility wants to recalculate the MAOP on all high-risk pipelines, Molica said. High-risk pipelines are those that run through heavily-populated areas.

The pressure went up dramatically in line 132 just before it exploded in San Bruno at about 6:10 p.m., Sept. 9, leaving eight dead and nearly 40 homes completely destroyed.

"Our objective is to exceed the directive of the CPUC,” Molica said. "Reviewing and validating will take time.”

The CPUC meeting is 9 a.m., today, 505 Van Ness Ave., San Francisco.

Bill Silverfarb can be reached by e-mail: or by phone: (650) 344-5200 ext. 106.

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