Indicted PG&E Can Be Held Accoutable

by Mark Toney, Published in San Jose Mercury News July 31–

If PG&E put the same level of commitment into public safety as it does into saturating the airwaves, billboards, newspapers, and our mailboxes with gorgeous advertisements trumpeting their community values–our gas pipelines would be the envy of the world. Instead, in April 2014, the California Public Utility Commission released a report documenting that among 20 sets of PG&E pipeline records chosen at random, auditors found that documentation on 11 of them was missing, erroneous, or filled with inconsistencies. Three and a half years after the San Bruno pipeline explosion that killed eight people, injured scores of others, and devastated a community, PG&E remains more far more skilled at polishing its image than with insuring pipeline safety.

Creating the kind of fundamental change to hold PG&E accountable for prioritizing public safety over public relations requires bold leadership from policy-makers at the federal and state level. Following is the beginning of a list of remedies, some of which have not been formally proposed by any parties, that would create profound change in business as usual.

The U.S. Attorney could impose–if PG&E were found guilty of pending criminal charges or, as part of a plea bargain, several remedies to change the PG&E corporate culture that led to decades of pipeline neglect and mismanagement that was documented by the National Transportation and Safety Board investigation of the San Bruno explosion. At the top of the list is to reconstitute the PG&E corporate board of directors by replacing all officers who were serving at the time of the explosion with new directors, which would include consumer advocates, union representatives, and public officials. An independent board of directors is the only entity with the authority to hold corporate management accountable on an ongoing basis. Any settlement of PG&E’s federal criminal violation could include ethics oversight that would put a stop to PG&E buying community support through television commercials, campaign contributions, lobbying, and charitable gifts, as well as ending its practice of bullying municipal agencies, community choice, and anybody else whose support it has been unable to purchase.

The California Public Utilities Commission has already been urged by TURN to apply $1 billion in state penalties to costs of repairing and testing the mismanaged system, rather than charging ratepayers to clean up the company’s mess. TURN has joined other consumer groups in calling for independent pipeline safety monitoring as well. But the CPUC has the authority to go far beyond what TURN or anyone else has asked for. Scott Hempling, a well—respected regulatory policy expert, in his January 2013 essay, “Competition for the Monopoly: Why So Rare?” notes that public utility commissions seldom revoke franchises, though they possess the authority to do so. Few things would get PG&E’s attention more making it compete with other utilities for the franchise to provide gas service in northern and central California. Now that’s a CPUC wake up call that even PG&E could hear.

Sadly, San Bruno wasn’t the first fatal explosion on a PG&E line; that happened in Rancho Cordova in 2008. PG&E apparently didn’t get the message then. This time, PG&E needs to be told loudly and more clearly that putting public relations ahead of public safety will cost them dearly.

Mark Toney is the executive director of TURN, the Utility Reform Network. He wrote this article for this newspaper.