Posts Tagged ‘California Public Utilities Commission’
Thursday, May 9, 2013 @ 02:05 PM gHale
Pacific Gas & Electric Co. (PG&E) should pay a $2.25 billion fine for its negligence leading up to the deadly 2010 gas pipeline explosion in a San Francisco Bay Area neighborhood, a state agency said.
The California Public Utilities Commission’s (PUC) investigators said the fine, would be the largest ever assessed by a state regulator, was an appropriate remedy for dozens of violations extending back decades, and said the company’s shareholders should shoulder the cost, not the utility’s customers.
“They have just plain failed to follow safety standards in so many areas,” said Brigadier General Jack Hagan, director of the commission’s Safety and Enforcement Division. “This is going to send a very strong deterrent message to PG&E that this kind of conduct and culture will not be tolerated.”
The blast in San Bruno sparked a fireball that killed eight people, injured dozens more and destroyed 38 homes in the quiet bedroom community.
The National Transportation Safety Board (NTSB) unanimously agreed in 2011 that the accident was the result of what board chairman Deborah Hersman called a “litany of failures” by PG&E, as well as weak oversight by regulators.
Separate from the NTSB investigation, investigators at the utilities commission blamed PG&E for the explosion, which occurred when an underground pipeline ruptured at the site of a decades-old faulty weld, sparking a gas-fueled fire.
The City of San Bruno, which is still struggling to rebuild the neighborhood devastated in the blast, said earlier Monday the utility’s shareholders should pay no less than $1.25 billion in fines, plus at least $1 billion toward pipeline inspection and upgrade costs.
PG&E will file its proposal later this month, and a judge from the utilities commission will make a final decision about how much to fine PG&E later this year.
“The penalties proposed by the commission staff and others far exceed anything that I have seen in my 30 years in the industry,” PG&E Corp. Chief Executive Tony Earley said. He added the penalty “could dramatically set back our efforts to do the right thing by making it harder and more costly to finance the remaining improvements that are needed in our gas system.”
Consumer advocates said the fine the commission proposed was appropriate, given the company’s myriad violations before the blast and an outside consultant’s finding that PG&E could raise $2.25 billion in equity to cover fines without damaging its financial condition.
Monday, March 25, 2013 @ 11:03 AM gHale
Utilities remain on alert at all times because of the potential harm one little cyber attack could cause, but California officials are especially on their toes these days.
The California Public Utilities Commission is now considering rules to bolster cyber-security protections to prevent potentially devastating attacks.
The agency warned utilities were becoming vulnerable to cyber attacks as their networks add smart meters and other computerized gear. Many providers are reluctant to report they suffered an attack because they worry disclosure could expose them to liability.
Experts say a cyber attack against an electric utility could lead to massive power outages that shut down water and transportation, threaten the sick and elderly and cause billions of dollars in damage.
“We will see catastrophic outages,” James Sample, Pacific Gas & Electric Co.’s (PG&E) chief information security officer, warned state regulators at an energy company forum. “We are dealing with a very intelligent adversary.”
Although PG&E doesn’t believe hackers have caused major problems at the San Francisco-based utility, Sample said, “We’re seeing increased phishing-type attempts,” typically fake emails aimed at stealing information.
Late last year, the U.S. Department of Homeland Security reported hackers were infiltrating “oil and natural gas pipelines and electric power organizations at an alarming rate.” The agency said it knew of 198 such “cyber-incidents” just last year.
Thursday, May 31, 2012 @ 05:05 PM gHale
Beleaguered Pacific Gas and Electric Co. (PG&E) could be facing more fines for violating standards related to running high-pressure natural gas pipelines at or near densely populated areas.
PG&E has been under intense scrutiny after a pipeline blast in 2010 killed eight people in San Bruno, CA. In March, the utility agreed to pay $70 million to resolve and settle related claims.
PG&E’s failure to properly classify its pipelines and document past patrols of transmission lines led to 3,062 violations of state and federal standards, PG&E said in a regulatory filing Tuesday, citing a regulatory report.
The duration of the violations was equivalent to more than 15 million days, according to the report by the Consumer Protection and Safety Division of the California Public Utilities Commission (CPUC).
The report urged the CPUC to levy significant penalties but did not recommend a specific amount, PG&E said.
Pacific Gas, which has it operations in northern and central California, could get a fine of up to $20,000 per day for each violation that occurred after Jan. 1, 1993 and before Jan. 1 this year.
The fines may go up to $50,000 for violations that occurred on or after Jan. 1 this year, PG&E said in the filing.
Pacific Gas can respond to the report by July 23, PG&E said.
Monday, April 23, 2012 @ 11:04 AM gHale
PG&E is facing a fine of nearly $17 million for irregularities in the utility’s gas pipeline safety testing in Contra Costa County, the California Public Utilities Commission (CPUC) said.
In January, the California Public Utilities Commission issued a $16.76 million citation for the utility’s failure to conduct gas safety tests on more than 13 miles of gas distribution pipelines in several cities in Contra Costa County, including Danville, Antioch, Pittsburg and Concord.
Some stretches of pipeline had not undergone tests for leaks since 1993, a violation of federal and state pipeline safety regulations, according to CPUC.
PG&E, which serves Pinole residents, appealed the citation in February. The appeal ended up denied by a CPUC administrative law judge, and CPUC re-ordered the utility to pay the citation Thursday.
PG&E self-reported the missed leak surveys, and the utility does not disagree with the safety violations, just the “excessive” amount of money it has to pay, said PG&E Executive Vice President for Gas Operations Nick Stavropoulos.
“PG&E understands that when we make a mistake, we own up,” Stavropoulos said. “As we stated in our appeal, we believe the penalty amount is excessive because we did the right thing by promptly self-reporting the violation.”
Stavropoulos went on to say that PG&E has “dramatically stepped up” its efforts to make sure that its operations and equipment are tested and safe, in the Bay Area and throughout PG&E’s service area.
Tuesday, March 13, 2012 @ 05:03 PM gHale
Pacific Gas & Electric Co. (PG&E) will pay $70 million in restitution to San Bruno for the 2010 pipeline explosion that killed eight people in the San Francisco suburb, company and city officials said.
The money will establish a nonprofit organization to help the community recover from the Sept. 9, 2010, blast, which also injured dozens of people and destroyed 38 homes, PG&E and San Bruno said in a joint statement.
The funds will help San Bruno “get beyond the tragedy and devastation caused by PG&E’s explosion and fire,” said Mayor Jim Ruane. “As a community and as a city, we remain fully dedicated to assuring our community’s full recovery.”
The agreement does not settle about 90 civil lawsuits that victims of the explosion have filed against the San Francisco-based utility. A trial is set for July 23 in San Mateo County Superior Court.
The nonprofit organization will determine how the restitution will benefit the community as a whole. PG&E will make the $70 million payment within 30 days and won’t seek to recover the money through insurance or customers’ utility rates, officials said.
The company previously set up a $100 million fund to support emergency needs in the aftermath of the explosion in a quiet neighborhood overlooking San Francisco Bay.
“We committed the night of the tragedy, and continue to commit, that we will help the victims and the community heal and rebuild,” said PG&E President Chris Johns. “Today’s announcement is another step in that process.”
PG&E officials have said the company plans to compensate blast victims and hopes to settle the civil lawsuits without going to trial. They have not specified how much the company will pay victims.
Federal investigators blame PG&E for the explosion, saying a litany of failures led to the blast, which they concluded was the result of an “organizational accident,” not a simple mechanical failure.
Escaping gas fed a pillar of flame 300 feet tall for more than 90 minutes before workers were able to manually close valves that cut off gas to the ruptured pipeline. Investigators said the damage would have been less severe had automatic valves been in place.
The California Public Utilities Commission voted unanimously in January to open a top-level legal investigation into whether PG&E broke any laws, a process that ultimately could end in hefty fines for the company. Agency staff issued a scathing report saying the natural gas line blew up in part due to what they called the systematic failures of PG&E’s corporate culture, which emphasized profits over safety.
Monday, February 6, 2012 @ 11:02 AM gHale
PG&E is looking at more than $16 million in fines for failing to conduct gas pipeline leak surveys on a stretch of pipeline in Contra Costa County, said California Public Utilities Commission (CPUC) officials.
Surprise was PG&E reaction to the $16.7 million fine, since the utility self-reported the problem to the state regulatory agency in December and has taken steps to survey the 14 miles of affected pipeline and repair the 22 leaks discovered on them.
Pipeline Safety Bill on Obama’s Desk
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PG&E to Replace Faulty Gas Pipe
San Bruno Blast: ‘A Litany of Failures’
Feds: CA Pipeline Blast ‘Clearly Preventable’
“To receive a penalty this extreme for being open, transparent and accountable is disappointing,” said Nick Stavropoulos, PG&E’s executive vice president of gas operations. “In fact, members of the commission recently applauded the work our team did and the company’s recognition of the employees who came forward.”
PG&E failed to conduct regular leak surveys of the affected pipelines because the utility did not accurately update its maps to reflect new construction. While some of the new construction occurred within the past five years, in other places the violations date back to 1993, according to the CPUC citation.
“Because of the duration and seriousness of the violation and the numerous opportunities PG&E had to find these problems earlier, we concluded that a citation was warranted,” said Michelle Cooke, interim director of the CPUC’s Consumer Protection and Safety Division.
Friday’s citation is the first under a new program authorizing CPUC staff to issue fines without the approval of the commission. The citation program, approved in December, is one of a number of changes the agency made in response to the September 2010 San Bruno pipeline explosion, which killed eight people, injured scores of others and destroyed dozens of homes.
PG&E has 10 days to either pay the fine with shareholder dollars or submit an appeal. The utility is reviewing the citation and fine to determine whether to appeal, spokesman Brian Swanson said.
Monday, November 28, 2011 @ 07:11 PM gHale
Pacific Gas and Electric Corp. (PG&E) will receive a $38 million fine for the 2008 gas explosion that killed a Rancho Cordova man, said the California Public Utilities Commission (CPUC).
The CPUC will take up the matter at its Dec. 1 meeting.
If approved, PG&E will pay the full fine to the state general fund within 20 days of the vote, bringing closure to the state’s three-year investigation into the Christmas Eve 2008 explosion.
PG&E previously agreed to pay $26 million to settle the state’s investigation. But last month, the company said it would pay the higher amount, which was set by an administrative law judge who criticized the company for the “severity and gravity” of its errors and failures that contributed to the explosion.
In filings with the CPUC, PG&E admitted it was late responding to complaints of a gas leak, and it installed the wrong pipe when performing repairs on the gas line prior to the explosion, which killed 72-year-old William “Bill” Paana and injured five others.
PG&E has said its customers will not pay for the fines.
Wednesday, June 22, 2011 @ 01:06 PM gHale
Pacific Gas & Electric Co. (PG&E) will $26 million in penalties and acknowledged safety violations in a fatal natural gas explosion that destroyed one home and damaged several others in a Sacramento suburb on Christmas Eve 2008, state regulators said.
If approved by the full California Public Utilities Commission, it would be the largest safety-related fine assessed by the regulator in more than 10 years.
The explosion in Rancho Cordova killed 72-year-old Wilbert “Bill” Paana and injured five others, including Paana’s daughter and granddaughter. Investigators found PG&E installed incorrect pipe during a repair in 2006 and was slow in responding to a leak report the day of the blast. PG&E did not immediately return a call seeking comment.
The motion to approve the agreement — signed by attorneys for the commission’s Consumer Protection and Safety Division and the company — cited February 2011 testimony in which “PG&E stated, ‘The tragic explosion and fire … resulted from a series of failures by PG&E employees to follow prescribed procedures, failures for which PG&E takes full responsibility.’”
The utility has faced intense scrutiny over the 2008 blast and another in 2010 that killed eight people in San Bruno.
Under the terms of the stipulated resolution, PG&E would pay a $26 million fine to the state’s General Fund and agree it violated several pipeline safety regulations. In addition, the company would pay the costs of the state investigation and the proceedings against the utility. The fines and costs would go to shareholders, not customers.
As part of the agreement, PG&E agreed pipe installed at the home on Paiute Way was not authorized for use as a gas line and not correctly pressure-tested; that it also installed inadequate pipe in the nearby city of Elk Grove in 2006 and did not follow its own procedures after discover of the problem, which could have uncovered the problem in Rancho Cordova; that it should have administered drug and alcohol tests to the employees who responded to the Christmas Eve leak; and its response that day was “unreasonably delayed and not effective.”
Wednesday, June 15, 2011 @ 11:06 PM gHale
Pacific Gas & Electric (PG&E) and its regulator had a culture of checking off boxes, rather than deeply considering the safety of their system, according a report released late last week by an independent panel.
The California Public Utilities Commission (CPUC) created the panel last year to assess the factors that contributed to the explosion of a PG&E gas pipeline in San Bruno last September, which took the lives of eight people and destroyed dozens of homes.
The panel found:
• PG&E and CPUC had a culture more attuned to simply complying with federal code than focusing on the safety of their system.
• A failure at PG&E and CPUC to adequately learn from mistakes or problems discovered internally and elsewhere in the industry.
• Major problems with the quality and availability of records about pipeline safety.
• At PG&E, a focus on the occupational safety of employees, but no similar focus on the pipeline system’s safety.
• A lack of technical understanding among the management at PG&E.
• People low on the totem pole at CPUC had indeed discovered some problems at PG&E, but people at the top of the agency never took those concerns seriously.
• PG&E’s “Pipeline 2020”, it’s response to the explosion, is unimpressive and prescriptive.
• CPUC remains understaffed and undertrained.
Commissioners heard the testimony of the panelists and vowed to take their recommendations seriously. Commission president Michael Peevey called the report “damning of PG&E across the board,” and agreed there has been a history of a “culture of complacency” at CPUC.
Shortly after the report hit the street, PG&E issued a statement calling the report “thoughtful” and saying they are moving quickly to adopt its recommendations. Their statement also took full responsibility for the explosion.
“We are deeply sorry for the tragic accident in San Bruno. And we are committed to earning our customers’ trust and confidence by continuing to do whatever is necessary to bring our performance up to industry-leading standards and see that an accident like the one in San Bruno never happens again,” officials said in a statement.