Costs of PG&E Pipeline Neglect To Be Paid By Customers

For Immediate Release from TURN, The Utility Reform Network


Contact:  Mindy Spatt, TURN, 415.929.8876, ext. 306


Thursday, June 23, 2016–Today, as PG&E faced criminal charges for years of pipeline neglect, the California Public Utilities Commission approved an 85% rate hike that will shift the costs of that neglect from shareholders to customers.  The Commission decision acknowledged that customers should not pay the costs of PG&E’s mistakes, but then allowed PG&E several opportunities to do just that.

Corrosion is one of the most significant safety risks for transmission pipe, but one PG&E neglected for decades.  There is abundant evidence that PG&E’s corrosion management was riddled with violations and poor practices for years.   Now it has to catch up.  “PG&E let their pipes rust for years,” said TURN legal director Thomas Long, “Now, PG&E wants customers to pay, again, for maintenance that should have been done all along — but wasn’t.”

And while the Commission gave lip service to the unreasonableness of customers paying to remedy PG&E’s decades of bad record-keeping, PG&E was allowed to collect customer funding up front to fix its problems, with the possibility of refunds to customers later — and an easy path for PG&E to avoid paying them.

“PG&E’s rates are already among the highest in the US,” said TURN executive director Mark Toney.  “These high rates have not guaranteed safety or reliability, but instead resulted in well over a quarter of a million households being shut off in 2015.”

Many of those households facing service shutoffs are seniors, disabled people and families with small children, whose health and safety are jeopardized when they have to live in homes without heat, light, and hot water. These vulnerable customers, who often face the deadly combination of skyrocketing housing costs and stagnant incomes, will be hardest hit.  Average monthly gas bills that were about $42 in 2014 would increase to $59 by 2018, costing customers about $215 more per year.  In cold winter months, gas bills for some customers will go up as much as $40 per month.

According to federal prosecutors, PG&E’s pipeline neglect was driven by greed for higher profits,” said Toney.  “Those profits came at the expense of customers’ safety, and now should be put back into the system in order to reduce the risks created by PG&E’s greed.”