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PG&E Faces Bigger Fine Despite Safety Improvements

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PG&EPacific Gas and Electric Co. has made progress on new federal safety recommendations, but California regulators still want to level a stiffer fine for company stemming from the fatal 2010 gas pipeline explosion in San Bruno.

On March 13, the new president of the California Public Utilities Commission, Michael Picker, announced a proposed fine of $1.6 billion for PG&E, up from $1.4 billion proposed last year.

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The new proposal would require the utility’s shareholders to pay more of the fine and direct more money to pipeline safety upgrades. PG&E has already spent $2.25 billion in safety upgrades for its pipeline system, according to reports, and the company announced March 18 that it has completed many of the National Transportation Safety Board’s new safety recommendations for the gas pipeline industry.

These recommendations were a result of a safety study, titled “Integrity Management of Gas Transmission Pipelines in High Consequence Areas,” released Jan. 27 by the NTSB. The study identified 28 recommendations that would expand and improve guidance on the application of the integrity management practices nationwide for gas operators, regulators and industry associations.

PG&E has already completed or is in the process of implementing many of these new safety recommendations that include:

  • Completing the review of nearly four million records associated with all 6,750 miles of PG&E’s transmission pipeline system to enhance knowledge of more than 400,000 pipeline components and associated attributes.
  • Conducting a field survey of all 6,750 miles of PG&E’s transmission pipeline system to verify the precise location of each line and to map its positional accuracy using high-precision GPS technology.
  • Developing a comprehensive program to consider all relevant pipeline condition data to help better evaluate and address risks to the integrity of the natural gas pipeline system.
  • Launching an integrated gas transmission geographic information system to provide its gas professionals with multiple layers of pipeline data including material specifications, testing history, and maintenance and operations information that enhances PG&E’s integrity management capabilities.
  • Establishing a multi-year plan to triple the ability for PG&E’s transmission pipelines to be inspected through in-line inspections.
  • Working across the natural gas pipeline industry to explore and leverage innovation in developing new in-line inspection technologies to inspect pipelines previously considered “uninspectable” with commercially available tools.
  • Implementing enhanced training and qualifications of all personnel involved in the integrity management program.

“Over the past several years we have been building a safety-first culture, implementing best-in-class practices across gas operations and sharpening our focus to provide our customers with safe, reliable and affordable energy,” said PG&E’s executive vice president of gas operations Nick Stavropoulos in a company statement. “These new NTSB recommendations will aid our industry and help keep our company on the path toward becoming the safest, most reliable gas system in the nation.”

Additionally PG&E has closed nine out of 12 safety recommendations in response to the 2010 pipeline incident in San Bruno. Of the three remaining safety recommendations, the NTSB considers PG&E’s progress “open-acceptable response,” which means acceptable progress, pending completion.

“We continue to make real, measurable progress to improve our gas system. We are pleased to have completed nine out of 12 NTSB recommendations, but there is still more work to be done,” Stavropoulos said. “We are focused not only on fulfilling the remaining three recommendations, but also continuing to implement these new NTSB safety recommendations as part of our commitment to provide our customers safe, reliable and affordable gas service.”

The new proposed penalty could be approved as soon as April 9.

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