PG&E Pipeline Safety Enhancement Plans (PSEP)

Background

In February 2011, the CPUC opened a Rulemaking to establish a new model of natural gas pipeline safety regulations in the wake of the San Bruno pipeline explosion in 2010.

In 2011, the CPUC ordered California’s investor owned natural gas utilities to submit individual Pipeline Safety Enhancement Plans (PSEP) for the purpose of addressing pipeline safety issues in the wake of the 2010 San Bruno natural gas pipeline explosion, and subsequent investigation.  PG&E submitted its PSEP Application in August 2011 addressing four key areas:  1) Pipeline Modernization; 2) Valve Automation; 3) Pipeline Records Integration; and 4) Interim Safety Enhancement. Evidentiary Hearings were held at the CPUC in March 2012.

In December 2012, the Commission adopted its Proposed Decision authorizing PG&E to spend $2.2 billion to implement its Pipeline Safety Plan, for which PG&E's customers will be responsible for at least 55% of the costs.  The Decision disallows certain costs, imposes earnings limitations, allocates risk of inefficient construction management to shareholders, and requires on-going improvement in Safety Engineering.

The CPUC ordered PG&E to file an updated PSEP within 30 days of completing its validation of Maximum Allowable Operating Pressure (MAOP). On July 1, 2013 PG&E completed its MAOP validation. On July 8, 2013, PG&E sent a Letter to the CPUC requesting an extension of time to submit its revised PSEP, from the required 30 days to 120 days.

On July 8, 2013, ORA filed a Motion urging the CPUC to order PG&E to include a Quality Assurance/Quality Control (QA/QC) plan as part of revisions to its multi-billion dollar natural gas pipeline safety upgrade plans (see details below).

See the ORA PG&E Pipeline Safety Enhancement Plan Update webpage.

 

ORA Position

ORA supports the Commission December 2012 Decision to implement important safety improvements to PG&E's pipeline system.  However, ORA had recommended that PG&E customers should not be responsible for paying for these upgrades given PG&E's mismanagement of its pipeline system and that customers have already paid for the costs of such pipeline maintenance and upgrades.  Instead PG&E shareholders should bear the full costs of Phase 1 costs of making important improvements to ensure its pipeline system is safe. The Decision incorporated several ORA recommendations including requiring PG&E:

  • To be responsible for cost overruns.
  • Improve its pipeline recordkeeping system using shareholder funds
  • Bear the cost of hydrotesting pipelines installed after 1955 for which records cannot be found.

However, the Decision does NOT:

  • Prioritize improvements first to the highest risk pipelines.
  • Require replacement of some transmission pipelines where PG&E indicated that testing was not sufficient to reduce the risk of future ruptures.
  • Incorporate consumer advocates' recommendation to hire an independent expert to review the implementation of PG&E's safety plan.

See ORA's November 29, 2012 Reply Comments on the CPUC Proposed Decisionon PSEP.

See ORA's November 16, 2012 Opening Comments on the Proposed Decision.

See ORA's January 31, 2012 PSEP Testimony

ORA QA/QC Motion

On July 8, 2013, DRA filed a Motion urging the CPUC to require PG&E to include a Quality Assurance/Quality Control (QA/QC) plan as part of its revised gas Pipeline Safety Enhancement Plan (PSEP) and for the CPUC to carefully review that plan. In its Motion, ORA argues:

  • A QA/QC plan is essential for such a large project, and without such a plan, there can be no assurance that the revised PSEP will be correctly designed and implemented.
  • A QA/QC plan is needed for safety and risk management purposes.
  • Despite several requests from DRA, PG&E has not provided a comprehensive QA/QC plan or demonstrated that it understands the purpose of a comprehensive QA/QC plan.
  • Direction from the CPUC is necessary in light of PG&E's history of failure to perform adequate QA/QC on very large projects (e.g., revised PSEP; Diablo Canyon nuclear power plant construction).

See ORA’s July 8, 2013 Motion. 

 

Proceeding Status

PG&E is required to submit to the CPUC a revised PSEP 30 days after completing its validation of Maximum Allowable Operating Pressure (MAOP), which was completed on July 1, 2013.   

See the proceeding docket.

 

Other Resources

ORA Pipeline Safety Enhancement Plans Portal  

Joint Party letter opposing CPUC's process to appoint mediator for San Bruno-related proceedings

Independent Review Panel's Report 

ORA Editorial, Acting Director Joe Como

ORA Press Release on PG&E's PSEP