Posts Tagged ‘PG&E’

Monday, April 13, 2015 @ 02:04 PM gHale

PG&E’s safety culture will now go under the microscope after regulators said the utility is safe, but not safe enough.

That comes after PG&E ended up fined $1.6 billion Thursday for causing the fatal gas-pipeline explosion in San Bruno, CA, over four years ago, after a hearing marked by emotional statements from victims of the blast and sharp words about continued flaws in the utility’s safety record.

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“PG&E is safer. But I just don’t believe PG&E is safe enough,” Michael Picker, president of the state Public Utilities Commission (PUC), said after the PUC voted 4-0 to levy the penalty. Citing numerous lapses involving PG&E’s sprawling natural gas pipeline system since the 2010 San Bruno explosion. Picker said he was ordering the PUC to conduct a wide-ranging probe into PG&E’s safety culture.

The $1.6 billion fine — which exceeds the $1.45 billion the utility reported in profit in 2014 — is not the last of PG&E’s legal troubles. It has already been hit with multiple fines and penalties, still must confront a 28-count criminal indictment on federal charges and is under investigation by state prosecutors who are probing the email controversy. Search warrants served by the state attorney general at the residences of Michael Peevey, who stepped down at the end of 2014 as PUC president and was replaced by Picker, and former PG&E regulatory executive Brian Cherry show criminal investigators were seeking evidence of improper communications, judge shopping, bribery and obstruction of justice involving the utility and the state agency.

Investigators believe a combination of PG&E’s flawed record keeping and shoddy maintenance, coupled with the PUC’s lax oversight, were the key factors behind the explosion that killed eight and wrecked a quiet San Bruno neighborhood.

The $1.6 billion penalty is the largest ever against a utility in the United States. The largest previous penalty was a $101 million punishment against El Paso Natural Gas for a fatal explosion in New Mexico in 2000.

Picker questioned whether PG&E is too big to provide safe utility services.

“Is the organization simply too large, being spread across a sizable portion of a large state, and encompassing diverse functions such as gas transmission and gas distribution, as well as electric service, to succeed at safety?” Picker said.

Picker pointed to safety breaches at the Metcalf electricity substation in South San Jose and gas system incidents in Kern County, Carmel, Morgan Hill, Castro Valley, Cupertino and Milpitas — all of which occurred since the September 2010 explosion — as examples of PG&E’s ongoing safety flaws.

Yet the PUC also stumbled in its oversight of PG&E, Picker acknowledged.

“We failed,” Picker said. “PG&E violated its public trust. But we weren’t vigilant enough.”

The new ruling requires that PG&E shareholders pay $850 million for gas system safety improvements, the company refund $400 million to gas customers, and PG&E pay a $300 million fine to the state.

“Since the 2010 explosion of our natural gas transmission pipeline in San Bruno, we have worked hard to do the right thing for the victims, their families and the community of San Bruno,” PG&E spokesman Keith Stephens said. PG&E said it won’t appeal the PUC penalty.

San Francisco-based PG&E already spent or committed to spend $2.8 billion on shareholder-funded safety improvements to its pipeline system, replaced more than 800 miles of cast-iron pipes of the type that failed in San Bruno with modern pipes, and installed more than 200 gas valves that can operate automatically or end up controlled remotely. The utility also has opened a state-of-the-art control center in San Ramon that is the nerve center of PG&E’s gas system.

Tuesday, January 27, 2015 @ 03:01 PM gHale

Pacific Gas & Electric (PG&E) is facing $530,000 in fines for safety violations for failing to “immediately excavate and examine pipelines that showed signs of signs of potential corrosion” and repair potentially hazardous defects, said the California Public Utilities Commission (CPUC).

The fines include $430,000 for violations first discovered during an audit that began in September 2012, and confirmed by another investigation by the regulatory agency that “lasted in 2014.”

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The utility ended up fined another $100,000 for letting non-qualified personnel perform field work, causing potential hazards for the public and utility employees. Investigators found those violations during an audit started in November 2013.

“We’re evaluating the citations and it’s important for our customers to know that since these audits took place, we’ve taken action by making significant process improvements,” said Donald Cutler, a PG&E spokesman. “We are working to resolve the issues to the satisfaction of the CPUC.”

PG&E has 10 days to pay up or contest the fines, the CPUC said.

The safety citations are small when you look at the other costs PG&E incurred since the 2010 San Bruno explosion, including a $70 million settlement with the city of San Bruno, $565 million to settle claims with San Bruno victims and families, and a $1.4 billion fine imposed by the CPUC last September, along with $635 million in repairs.

Tuesday, September 16, 2014 @ 06:09 PM gHale

It is one thing to talk about a cyber attack on a power plant, but a physical attack takes on another look entirely.

That is because an attack last year on the Silicon Valley’s power grid appears to have involved only one shooter and did not require access to technology or a high degree of training, an FBI official said.

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John Lightfoot, who manages the FBI’s counterterrorism efforts in the San Francisco Bay Area, spoke at a utility industry conference in San Francisco Tuesday and reiterated the bureau’s position that there is no indication the April 2013 shooting of a Pacific Gas & Electric Co. (PG&E) power station outside San Jose was an act of terrorism.

Jon Wellinghoff, former head of the Federal Energy Regulatory Commission, called the attack a sophisticated act of terrorism and raised concerns about the security of the nation’s power grid. Other officials have echoed his concerns.

Lighthouse said the attack was not difficult to execute. Though more than one person may have been involved in the full incident, FBI investigators think there was just one shooter, he said. Additionally, Lighthouse said many of the shots missed the target.

“We don’t think this was a sophisticated attack,” Lighthouse said in a report in the San Francisco Chronicle.

The incident began when one or more people lifted heavy manhole covers south of San Jose, climbed under the road and cut AT&T fiber optic cables, temporarily knocking out 911 service and phone service, sheriff’s officials have said.

About 15 minutes later, someone fired a high-powered rifle into a nearby PG&E substation, damaging numerous transformers.

Wellinghoff, who was in office during the incident, has said he reached his conclusion after consulting with Defense Department experts.

Lighthouse said the attack does not meet the bureau’s definition of terrorism. The FBI is not aware of any political or social agenda the incident was able to further, and Lighthouse said no one has claimed responsibility for it.

Wednesday, August 6, 2014 @ 05:08 AM gHale

A federal grand jury charged Pacific Gas & Electric (PG&E) last Tuesday with lying to federal investigators in connection with a fatal pipeline explosion that killed eight people and leveled a suburban Northern California neighborhood in 2010.

The U.S. attorney in San Francisco unveiled the obstruction of justice charge and 27 related counts, which are in a new indictment charging the utility with felonies. It replaces a previous indictment that contained 12 counts related to PG&E’s safety practices, but not obstruction.

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Prosecutors say PG&E hampered the investigation by lying to National Transportation Safety Board (NTSB) investigators after the blast. In particular, PG&E officials stand accused of trying to mislead the NTSB about the pipeline testing and maintenance procedures the utility was following at the time of the explosion and for six months after.

“The consequence of this practice was that PG&E did not prioritize as high-risk, and properly assess, many of its oldest natural gas pipelines, which ran through urban and residential areas,” the U.S. attorney’s office said.

The other charges accuse the utility of failing to act on threats in its pipeline system even after the problems ended up identified by its own inspectors. The indictment charges PG&E with keeping shoddy records, failing to identify safety threats and failing to act when they found threats. No employees or executives are facing charges in the San Bruno disaster. Prosecutors could still file another indictment charging individuals.

The utility said in June it was expecting the new indictment. PG&E spokesman Greg Snapper said company officials have not read over the indictment.

“However, based on all of the evidence we have seen to date, we do not believe that the charges are warranted and that, even where mistakes were made, employees were acting in good faith to provide customers with safe and reliable energy,” Snapper said.

The new charges expose PG&E to more than $1 billion in fines. It had previously faced up to a $6 million fine under the old indictment

NTSB investigators later found PG&E had inaccurate records on its more than 6,000 miles of gas transmission lines, and that as a result hadn’t tested for the defective seam weld that ruptured a pipeline and ignited the fireball that leveled several blocks and left eight people dead in San Bruno.

In addition, the utility is facing lawsuits and $2.5 billion in civil fines from regulators, including the state Public Utilities Commission. San Bruno city officials on Monday demanded the head of the PUC resign, alleging the agency had improper contacts with PG&E.

Along with causing the deaths, the explosion injured dozens and destroyed 38 homes. Nearly four years later, the neighborhood about 12 miles south of San Francisco is still recovering.

“What the U.S. prosecutor is saying is that PG&E did not use the proper procedure under the law for evaluating the integrity of their pipelines,” San Bruno City Manager Connie Jackson said. “On top of that, they represented to NTSB that the procedure they were using was correct and approved” when it wasn’t.

On Tuesday, San Bruno Mayor Jim Ruane said “the new criminal charges demonstrate a pattern of deceit by PG&E.”

PG&E said in May that it has committed $2.7 billion over the next several years for safety-related work following the incident.

Wednesday, April 23, 2014 @ 09:04 PM gHale

Facing 12 criminal felony counts that allege it intentionally violated federal pipeline safety laws in connection with the 2010 natural gas explosion in San Bruno that killed 8 people, injured 66 and destroyed 38 homes, PG&E pleaded not guilty to the charges Monday.

The utility, whose executives weren’t present for the arraignment, entered the not guilty plea through its attorneys at a hearing at the U.S. District Court in San Francisco.

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If PG&E ended up convicted on all 12 felony counts, the utility could face a fine of up to $6 million. But the penalties could exceed $6 million if the court finds the company gained financially from its misconduct or if the victims’ losses come into play, according to the U.S. attorney’s office, which is prosecuting the case.

San Francisco-based PG&E, in a news release issued after the arraignment, said, “While we don’t believe any employee intentionally violated federal pipeline safety regulations, the legal process will ensure that all of the facts related to this tragic event are fully reviewed.”

It characterized the San Bruno blast as “a tragic accident,” and added: “We’re accountable for that and make no excuses. Most of all, we are deeply sorry.”

PG&E said it committed $2.7 billion to upgrade and improve its century-old natural gas system. In an earlier filing, it warned securities regulators and its investors that it could end up forced to accept court-supervised control by an outside authority of some or all of the utility’s natural gas operations.

In a separate proceeding before the state Public Utilities Commission, PG&E faces fines of up to $2 billion as its punishment for the San Bruno explosion.

After a pair of administrative law judges at the PUC review the facts related to the potential fines and issue a proposed ruling, the five-member PUC will make a final decision, expected before the end of the year.

Thursday, April 3, 2014 @ 05:04 PM gHale

Pacific Gas and Electric Co. (PG&E) is facing federal felony counts involving safety violations linked to a deadly 2010 natural gas pipeline explosion in the San Francisco Bay Area.

The indictment charges the utility with 12 felony violations of federal pipeline safety laws, which could carry a total possible fine of $6 million, or more if the court decides it somehow benefited financially from the disaster.

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Federal prosecutors said PG&E knowingly relied on erroneous and incomplete information when assessing the safety of the pipeline that eventually ruptured, sparked a fireball and leveled 38 homes in San Bruno, CA.

Nearly four years later, the neighborhood where eight people died and dozens injured is still recovering.

“The citizens of Northern California deserve to have their utility providers put the safety of the community first,” U.S. Attorney Melinda Haag said.

The indictment accuses the company of failing to act on threats in its pipeline system even after their own inspectors identified the problems.

About a year after the explosion, investigators with the National Transportation Safety Board found these lapses by PG&E led to the blast.

The board also characterized the explosion as an “organizational incident,” not a simple mechanical failure.

PG&E Chairman and Chief Executive Tony Earley said Tuesday the company is holding itself accountable and is deeply sorry.

“We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so,” Earley said in a statement. “We want all of our customers and their families to know that nothing will distract us from our mission of transforming this 100-plus-year-old system into the safest and most reliable natural gas system in the country.”

PG&E Corp., the parent company of PG&E, said on its website the “federal criminal charges filed today have no merit.”

“PG&E believes that its employees did not intentionally violate the federal Pipeline Safety Act, and that even where mistakes were made, employees were acting in good faith to provide customers with safe, reliable and affordable energy,” the statement said.

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.

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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.

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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.”

Thursday, November 7, 2013 @ 06:11 PM gHale

Pacific Gas and Electric Co. was hit with a $8.1 million fine for a contractor’s botched inspections of more than 200 welds on natural gas pipelines from Petaluma to Lodi, California regulators said.

The contractor, TC Inspections Inc. of Rodeo, performed substandard inspections of 224 welds on a dozen pipelines during a testing and replacement program that PG&E began after the San Bruno explosion of 2010 that killed eight people, according to the state Public Utilities Commission.

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The gas transmission lines run under cities including Oakland, El Cerrito, Livermore, Petaluma, Lodi and Manteca, and the Calaveras County hamlets of San Andreas and Valley Springs, the commission said.

PG&E discovered problems with the company’s work when crews replaced a gas line in Brentwood. It found TC Inspections had performed substandard X-ray inspections on girth welds running under Fairview Avenue between Fairview Court and Balfour Road, the utilities commission said.

That line was not in service, so the commission’s staff did not fine PG&E for the Brentwood problems. However, the other pipelines that TC Inspections had vouched for were in service.

PG&E is ultimately responsible for the pipes’ condition, regardless of whether it delegated the inspection work to an outside contractor, the commission said in levying the $8.1 million fine.

None of the lines poses a public danger, said Sumeet Singh, the PG&E engineer who oversees the tracking and inspection of the company’s pipelines.

Federal and state rules require each new girth weld on an urban line to be X-rayed around its circumference. Instead of three X-ray images, TC Inspections performed only two, leaving part of each weld uninspected, PG&E officials said.

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