PG&E Hit with Huge Fine

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.

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“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.

One Response to “PG&E Hit with Huge Fine”

  1. Dennis Speer says:

    Sorry PGE but you have been paying out funds to your shareholders that should have been put into maintenance and pipe testing/surveys.
    That you finally are checking and notice that you have been woefully delinquent is not an excuse for the years of stolen profits.

    I am just getting too old. I remember when Utilities were boring investments only for old ladies. The deal for being able to be a monopoly in an area was that they got a 10% profit, and only that no matter what. Now they can make lots more than that due to changes in regulations…..and along with the excitement of higher returns comes the opportunity to have lower returns, or no returns, or total loss with liabilities beyond all resources.

    You shareholders should suffer due to the bad decisions of management. And the shareholders, were they not dominated by folks sitting on boards of directors, should fire the managers that decided to not inspect pipelines.

    My bet is that a mid level manager will be sacrificed for these deficiencies and the top dogs that really made the decision will get bonuses for “finding the perpetrator and dealing with him”.

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