CPUC to slap PG&E with fines, set new rules

February 24, 2011 8:47:47 PM PST
State regulators are unleashing an all-out campaign to reform utility safety standards and create penalties for violators, after last September's devastating gas line explosion and fire in San Bruno.

The California Public Utilities Commission is taking two simultaneous steps. It's planning to slap PG&E with hefty fines for its sloppy record keeping and it's taking steps to improve pipeline safety.

While the cause of the San Bruno explosion and fire is still underway, the state Public Utilities Commission says there's no reason to hold off on setting new rules for pipeline safety.

"This part is ready to move forward and our view was that this was important enough in and of itself to get moving on a fast track while the NTSB completes its work," said Mike Florio from the CPUC.

The process is expected to take two years, and it will include input from the public, utility companies, and pipeline experts. The new rules will apply to all gas pipelines, not just ones operated by PG&E The consumer watchdog group The Utility Reform Network, or TURN, welcomes the plans.

"We actually think the PUC is doing the right thing by opening a rulemaking now on pipeline safety because there are some actions and activities that can be taken now," said TURN Executive Director Mark Toney.

The CPUC wants to be notified any time a pipeline is pressurized above its maximum allowable level. The agency may also consider retrofitting pipelines to allow inline inspections, improving emergency response plans, developing risk assessment standards, and protecting whistleblowers.

The CPUC also raised for the first time that ratepayers may have to foot the cost. Assm. Jerry Hill, D-San Mateo, says a formula will have to be developed that's fair to customers.

"There may be a different rate of return applied to certain aspects of the transmission line improvements versus other costs that PG&E has to incur and other capital costs they may have," said Hill.

The CPUC also is taking action to determine penalties it will levy against PG&E for lapses in its record keeping. Such as records that indicated the San Bruno pipeline was seamless when it was not. Penalties could run $20,000 per violation, per day. The commission says the process will take time and will be on-going.

"When we hear from the NTSB and their final report, we'll have a lot more information about what can be done to prevent this from happening again," said Florio.

Three public hearings will be held to get input on improving pipeline safety. The first will be held in San Bruno on April 5th at the San Bruno Senior Center.

San Bruno Senior Center
1555 Crystal Springs Road
San Bruno, CA 94066-4769
(650) 616-7150


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