Plan Would Grant PG&E More Money To Maintain Pipes

Requiring safety reports from PG&E is a good first step, but must be coupled with penalties for violations to motivate PG&E to make the right decisions.

Pacific Gas and Electric Co. may soon get more money to spend on maintaining and repairing its natural gas pipelines.

Late Tuesday, the California Public Utilities Commission issued a proposal that would increase the amount of revenue PG&E collects from customers to run its natural gas system. The maintenance of PG&E’s pipelines has come under intense scrutiny after one of the lines exploded in San Bruno on Sept. 9, killing eight people.

The proposal does not cover the costs of the emergency repairs, inspections and document searches that have followed the explosion.

Under the proposal, written by one of the commission’s administrative law judges, PG&E’s natural gas-related revenue would rise from $461.8 million in 2010 to $514.2 million in 2011, $541.4 million in 2012, $565.1 million in 2013 and $581.8 million in 2014. PG&E had originally asked for as much as $614.8 million in 2014.

If the commission approves the proposal, the average residential customer’s monthly gas bill would rise 1.2 percent this year, to reach $52.22. The commission could vote on the proposal next month.

The extra money would come with strings.

PG&E, based in San Francisco, would be required to file safety reports with the commission detailing how it spends the money on maintenance and repair projects. If the utility took money that had been allocated to a particular repair project and decided to spend the funds on something else, the report would have to explain that decision.

That new requirement would address a criticism leveled against PG&E in the wake of last year’s blast. The company in 2007 planned to spend $4.87 million to replace a portion of the same pipeline that exploded, then decided that other projects had higher priority. Critics wondered if PG&E missed a chance to spot flaws in the line.

"The requirement for the safety report is a great first step for the commission and the public to be able to track their spending on pipeline safety," said Marcel Hawiger, staff attorney with The Utility Reform Network.

He added, however, that the semiannual safety reports, by themselves, would not be enough to improve PG&E’s pipeline maintenance.

"The main thing the commission can do is to penalize PG&E for violations, to motivate them to make the right decisions," Hawiger said. "That’s the key factor that’s been missing."

The proposed decision closely follows an agreement that PG&E and TURN reached last year on the amount of money the company would need to run its natural gas system. That agreement, however, preceded the San Bruno blast. PG&E could face added expenses if the commission orders changes in the way the company runs its system.

Should that happen, PG&E would have to ask the commission to approve any additional revenue.

"It’s very early, so we really don’t know what we’ll need to do," said PG&E spokeswoman Christine Cordner.

Sanctions: Regulators intend to seek sanctions against PG&E for failing to verify safe pressure levels for nearly 1 out of 10 pipeline miles in its urban gas transmission system.