PG&E Gives Short Shrift to Electric Supply Adequacy

California energy regulators announced two new investigations of Pacific Gas and Electric Co. on Friday and, in one of the cases, proposed that the troubled utility pay a $7.1 million fine.

California energy regulators announced two new investigations of Pacific Gas and Electric Co. on Friday and, in one of the cases, proposed that the troubled utility pay a $7.1 million fine.

One investigation by the California Public Utilities Commission will determine whether PG&E failed to line up enough electricity supplies in advance for three months last year and should pay the fine as a result. The other will focus on whether the company violated environmental conditions that the commission placed on the construction of an electrical substation near Bakersfield in 2009 and 2010.

Neither investigation is related to the ongoing probe of last year’s fatal pipeline explosion in San Bruno, which focused intense scrutiny on PG&E. The new investigations, however, follow repeated criticism of the commission’s relationship with PG&E, with critics claiming that the regulators have been loath to penalize the companies they cover.

A PG&E spokesman said Friday that the company, based in San Francisco, takes seriously the need to follow all applicable regulations in its projects. And he blamed the question of inadequate electricity supplies on mistakes that the company made in its reports to the commission.

“We did secure the required amount of energy resources to serve our customers for those months,” said spokesman Brian Swanson. “However, we made clerical errors in our filings for those months, which we corrected soon after.”

Following California’s electricity crisis 10 years ago, the commission adopted rules that require utilities to buy more electricity than needed to meet expected demand. The utilities must file monthly reports to the commission showing that they have enough electricity supplies under contract for the coming month.

According to the commission, PG&E fell short in March, April and July of 2010. The company didn’t miss its requirements by much. July had the biggest shortfall: 286.8 megawatts, roughly the output of one or two small power plants.

“We’re surprised that PG&E got caught short,” said Marcel Hawiger, staff attorney for The Utility Reform Network watchdog group. “If they didn’t comply, they should pay. Their shareholders should pay.”

The shortfall did not mean that PG&E customers were at risk of a blackout. The state had adequate electricity supplies throughout the year, said a spokeswoman for the California Independent System Operator, the organization that manages the state’s electrical grid.

The other investigation will examine PG&E’s construction of a substation. According to commission staff, the company violated several rules and procedures designed to protect the local environment. For example, PG&E allegedly did not hire a qualified biologist to train the contractors how to avoid harming two protected species on the site – the kit fox and the burrowing owl.

No specific fine has been proposed in the second investigation.