Posts Tagged ‘California Public Utilities Commission’
Tuesday, December 31, 2013 @ 04:12 PM gHale
The California Public Utilities Commission returned $375,000 Pacific Gas and Electric Co. (PG&E) paid as a natural-gas safety penalty, so the regulators can legally fine the utility as much as $2.5 billion.
The commission’s safety enforcement division imposed the fine earlier this month in response to a 2012 audit concluding that for more than four decades, PG&E lacked a legally required procedure to systematically monitor its gas-transmission pipelines for problems such as leaks and improper pressure levels.
Without a “unifying” system, PG&E’s gas-safety practices were “disconnected and did not result in effective” monitoring of its major pipelines, the safety division said. PG&E promptly paid the fine.
Not so fast, the regulators said. The agency’s safety arm sent a letter to PG&E withdrawing the citation, along with a check from the state treasurer for $375,000.
The problem for the utilities commission was many of PG&E’s gas-safety shortcomings have been at the center of exhaustive hearings into practices that contributed to the September 2010 explosion of a transmission pipeline in San Bruno. The blast killed eight people and destroyed 38 homes, and PG&E is facing as much as $2.5 billion in fines.
Commission legal-division attorneys involved in the San Bruno case were unaware of the $375,000 fine before the safety division issued it. They told attorneys for other parties in the San Bruno case it could trigger a form of regulatory double jeopardy.
In a statement Friday, the commission said it was returning the check to prevent any “confusion” between the conduct that prompted the $375,000 fine and the San Bruno case.
But dropping the citation and returning the money may not eliminate the utilities commission’s problem. Attorneys for parties involved in the San Bruno case said PG&E could point to the lower fine in arguing that a multibillion-dollar penalty for the disaster, which stemmed from many of the same gas-system deficiencies, would be excessive.
Tuesday, December 24, 2013 @ 02:12 PM gHale
Pacific Gas and Electric Co. (PG&E) is facing a fine of more than $14 million for the utility’s “delay and obfuscation” in revealing that its records for a natural-gas pipeline in San Carlos failed to show potentially risky welds, California regulators said.
However, the five-member California Public Utilities Commission also voted to allow PG&E to restore the line to nearly full pressure, accepting the company’s reassurances that the transmission pipe is safe.
The commissioners, all of them gubernatorial appointees, took turns lashing out at PG&E at their meeting in San Francisco before fining the company $50,000 a day for the 229 days executives waited to disclose the records problem — $11.45 million in all. They added a $2.9 million fine against the company for filing a document with the state that allegedly downplayed the seriousness of the safety issues.
“This penalty is designed to serve as a deterrent,” said Commissioner Mark Ferron, who led the push to approve a larger fine than the $6.75 million recommended by an administrative law judge.
“This fine sends a strong message to PG&E and all utilities we regulate that delay and obfuscation will not be tolerated,” Ferron said.
Commissioner Catherine Sandoval also went after top management, particularly Earley, for characterizing the San Carlos situation not as a safety hazard, but as a case of PG&E failing to observe regulatory niceties.
“No explanation has been given for that very long time period” during which PG&E withheld its record-keeping problem, Sandoval said. “I’m particularly concerned that it reflects a lack of candor.”
If it hadn’t been for “eagle-eyed people with shovels,” she said, the problem might still be there.
PG&E’s records for the 3.8-mile transmission line, known as Line 147, showed certain segments had no seam welds. However, when a work crew dug up the line at Brittan and Rogers avenues in October 2012 for routine repairs on a water line, a PG&E engineer spotted a suspected leak. PG&E crews then discovered welds dating from the 1920s that implicated in several pipeline failures elsewhere.
There were obvious similarities to the situation in San Bruno before the September 2010 explosion of a transmission pipeline that killed eight people and destroyed 38 homes. That pipe failed at a weld that PG&E didn’t know was there because its records showed the line had no seams. As a result, PG&E had never tested the line for potentially bad welds.
A consulting engineer asked PG&E executives in a November 2012 email whether they were facing “another San Bruno situation” in San Carlos, where the company did not know what kind of pipe it had in the ground. He wondered whether PG&E may have made a hidden problem worse when it tested Line 147 with high-pressure water in 2011, without knowing the suspect welds were there.
PG&E didn’t report the concerns to the state utilities commission staff until this past March. In July, it filed paperwork with the commission that appeared to be a notification of harmless errors.
The utilities commission is likely to decide sometime next year how much PG&E should end up fined for the San Bruno explosion and problems that contributed to it. Estimates of the fine range up to $2.5 billion.
PG&E insisted its test on the San Carlos pipeline in 2011 would have revealed any weld problems and that the line is safe. The commission, which had ordered PG&E to cut pressure on the pipeline sharply in October, indicated that company experts’ testimony had been persuasive and voted to let the utility push pressure back to nearly full level.
PG&E officials said they were pleased with the vote to restore the pressure on Line 147 but said the $14.4 million fine was “excessive.”
“We acknowledge our communication efforts fell short of expectations in this instance,” PG&E executives said in a statement. “We are committed to improving the way that we communicate” with the commission.
The statement said PG&E had “no intent to mislead or deceive the commission or its staff regarding Line 147.”
Monday, June 10, 2013 @ 05:06 PM gHale
The beleaguered San Onofre nuclear power plant on the California coast is closing after an epic 16-month battle over whether the twin reactors could safely restart.
Operator Southern California Edison (SCE) said it will retire the twin reactors because of uncertainty about the future of the plant, which faced a tangle of regulatory hurdles, investigations and mounting political opposition. With the reactors idle, the company has spent more than $500 million on repairs and replacement power.
San Onofre could power 1.4 million homes. California officials have said they would be able to make it through the summer without the plant but warned that wildfires or another disruption in distribution could cause power shortages.
It wasn’t clear how SCE would replace electrical production from the plant permanently. The California Public Utilities Commission said it will work with governments to ensure Southern California has enough electricity, which will require increased energy efficiency and conservation during peak usage, as well as upgrades to transmission and generation resources.
The plant between San Diego and Los Angeles hasn’t produced electricity since January 2012, after a small radiation leak led to the discovery of unusual damage to hundreds of tubes that carry radioactive water.
The plant “has served this region for over 40 years,” said Ted Craver, chairman of SCE parent Edison International. “But we have concluded that the continuing uncertainty about when or if (the plant) might return to service was not good for our customers, our investors or the need to plan for our region’s long-term electricity needs.”
SCE had been seeking permission from the Nuclear Regulatory Commission (NRC) to restart the Unit 2 reactor and run it at reduced power, in hopes of stopping vibration that had damaged the tubing.
“The Nuclear Regulatory Commission is aware of Southern California Edison’s plans to permanently shut down San Onofre, but we are waiting for formal notification of their decision,” said Victor Dricks, spokesman for NRC.
The problems center on steam generators installed during a $670 million overhaul in 2009 and 2010. After the plant shut down, tests found some generator tubes were so badly eroded they could fail and possibly release radiation, a stunning finding inside the nearly new equipment.
The four generators at San Onofre — two per reactor, each with 9,727 alloy tubes — function something like a car radiator, which controls heat in the vehicle’s engine. The generator tubes circulate hot, radioactive water from the reactors, which then heats a bath of non-radioactive water surrounding them. That makes steam, which then turns turbines to make electricity.
Edison has argued for months the Unit 2 plant could safely restart, but Craver raised the possibility of closing the plant because of lingering uncertainty about the future. The company had said little about the future of the heavily damaged Unit 3 reactor.
Questions arose over changes to the replacement generators — they were different than the originals, 23.6 tons heavier and hundreds of additional tubes ended up a part of design changes.
SCE, San Diego Gas & Electric and the city of Riverside own San Onofre. The Unit 1 reactor operated from 1968 to 1992, when officials shut it down and dismantled it.
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.