Utility Watchdog Seeks Funds to Enforce Safety Regulations

When will the CPUC put safety first?

Serious safety violations at power plants go uncorrected because regulators have never used their formal enforcement powers, the California Public Utilities Commission stated in a budget request being considered by legislators.

Profit-driven power plant operators need prodding to correct problems that “put worker and public safety at risk,” but the commission lacks staff to litigate a formal enforcement action, according to the budget proposal. Commission staff regularly identify violations but can’t fine plant owners without a formal action.

Buffeted by criticism after the deadly San Bruno gas explosion in 2010, the utilities commission is requesting funding for 41 new positions to improve oversight of gas pipelines, electrical lines and railroads. One of those positions is for the power plant safety program. But the agency faces skepticism from legislators over whether additional funding actually will sharpen the commission’s regulatory teeth.

“I want to know that if the funds are allocated and the positions are filled that there will be a demonstrable improvement in public safety,” said Sen. Joe Simitian, D-Palo Alto, chairman of the budget subcommittee considering the proposal. “The tragedy in San Bruno has highlighted a larger set of systemic shortcomings.”

Subcommittee staff recommended rejecting the additional funding, suggesting that a “cultural change” is needed instead. Subcommittee members decided Wednesday to keep the issue open.

The commission’s budget request was particularly critical of power plant operators.

“Electric generators demonstrate a strong incentive to maximize profits by reducing or deferring maintenance, training and safety programs,” it said. “Many plants demonstrate that unless CPUC staff brings the plant’s attention to violations and seeks corrective action, the plant is unlikely to voluntarily spend profits in those areas.”

Because regulators have yet to initiate a formal enforcement action, it said, “serious infractions go uncorrected, which leads to recurring incidents.” Industry representatives strongly disagreed.

“I don’t think this is a real issue,” said Jan Smutny-Jones, executive director of the Independent Energy Producers Association. “The staff is trying to find a reason to be. We are unaware of any well-documented cases that would support these assertions.”

Smutny-Jones said power companies actually have a financial incentive to keep their plants well-maintained and running smoothly. The Utility Reform Network, on the other hand, called the commission’s language “potentially alarming.”

“It’s shocking to hear that there are safety violations that the Commission is aware of but has not required the utilities to correct,” Mindy Spatt, spokeswoman for the consumer advocacy group, wrote in an e-mail. “A watchdog with no ability to correct dangerous safety violations is truly a toothless watchdog.”

Commission spokeswoman Terrie Prosper said inspectors take informal enforcement actions “by identifying potential violations and ensuring the power plant operators make needed corrections.”

But without a formal action, staff can’t financially penalize recalcitrant companies. The agency is drawing up a proposal that will allow staff to impose fines, Prosper said in an e-mail.

The one additional staff position for power plant safety, she wrote, “should go a long way toward addressing the need we have.”

“Enforcement can always use additional tools to become more effective,” Prosper wrote. “The ability for staff to issue citations with penalties attached and additional staff to assist with exercising that enforcement ability will increase attention to risk minimization on the part of operators, which will improve safety.”