DRA Pleased that the CPUC Issued a Decision To Force Safety Improvements in PG&E’s Natural Gas Transmission Pipeline System but Disappointed that the Decision Doesn’t Go Far Enough on Safety and Makes Customers Pay For PG&E’s Mistakes 

 

SAN FRANCISCO, December 20, 2012 – The Division of Ratepayer Advocates (DRA), the independent consumer advocacy division within the California Public Utilities Commission (CPUC or Commission), is pleased that the CPUC issued a decision today on PG&E’s Pipeline Safety Enhancement Plan (Plan) that will help improve PG&E’s Transmission Pipeline Safety. At the same time, DRA is disappointed that the Commission is letting PG&E charge its customers for more than 55% of the $2.2 billion in upgrades to its natural gas transmission pipeline infrastructure, when utility customers have already paid for those upgrades that they never got. 

The decision incorporated several DRA recommendations: it requires PG&E to be responsible for cost overruns, to improve its pipeline recordkeeping systems using shareholder funds, and to bear the cost of hydrotesting pipelines installed after 1955 for which records cannot be found. However, the decision fails to sufficiently ensure safety because it doesn’t require PG&E to prioritize all of the highest risk pipelines first. The decision also fails to require replacement of some transmission pipelines where PG&E’s own testimony indicates that testing was not sufficient to reduce the risk of future ruptures. 

Additionally, DRA is disappointed that the Commission declined to adopt the recommendation of consumer advocates (DRA, TURN, City of San Bruno, and the City and County of San Francisco) to hire an independent expert to review PG&E’s implementation of the Plan. 

“An independent monitor is essential to ensure that PG&E is prioritizing safety over other competing objectives,” said Joe Como, DRA’s acting director. “Given PG&E’s past mismanagement of its pipeline safety responsibilities, this is a company that needs to be on probation for a while.” 

While the decision significantly disallows portions of PG&E’s proposed budget, it requires PG&E customers to fund at least 55% of the Plan costs, and maybe more over the life of the pipelines. The Plan does not implement new standards, but implements safety upgrades that customers previously paid for through their utility bills. 

See DRA’s webpage on the PG&E Pipeline Safety Enhancement Plan. 

For more information on DRA, please visit www.dra.ca.gov.