Judge Proposes $6.75 Million Fine For PG&E For Sketchy Pipeline Recordkeeping

A state administrative law judge in San Francisco today proposed fining PG&E Co. $6.75 million for delaying and then mischaracterizing its correction of significant errors in records on two Peninsula natural gas pipelines.

The pipelines are Line 147, which runs for 3.8 miles beneath Brittan Avenue in San Carlos, and Line 101, which extends from San Francisco to Milpitas. The errors affected the maximum pressure allowed in the pipes.

California Public Utilities Commission Administrative Law Judge Maribeth Bushey said in the proposed decision that PG&E began learning of errors in its records on welds or seams in Line 147 in October 2012, but did not publicly file a correction with the commission until July.

When PG&E did submit a public correction on July 3, Bushey wrote, it called the mistakes “errata,” a word usually used for minor errors such as typographical slips.

In using an “errata” procedure for the filing, PG&E created “a false impression of insignificance,” Bushey said.

“The errors discovered included pipeline incorrectly recorded as seamless, a fact pattern distressingly similar to San Bruno,” Bushey wrote.

“It is not credible that PG&E’s engineers and executives did not recognize the provocative nature of these facts in light of the intense public interest in natural gas pipeline safety,” Bushey wrote.

The delay and mischaracterization of the correction “had the effect of misleading the commission and the public,” she said.

In San Bruno, a pipeline rupture, explosion and fire in September 2010 killed eight people and destroyed 38 houses.

Federal and state regulators have concluded that one of the causes was inaccurate records that showed a section of the pipe to be seamless.

The filings on Lines 101 and 147 are part of an ongoing proceeding in which the commission is seeking to improve pipeline safety.

In the case of Line 101, PG&E explained in the July correction that it had improperly relied on a 1989 test to justify the line’s maximum pressure.

Although the utility did not file its public correction until July, the utility had reduced the pressure in Line 147 last year and in Line 101 in April.

The proposed fine now goes before the San Francisco-based commission, which will consider it at either its Dec. 5 meeting or a later date.

PG&E and other parties in the proceeding—which include the cities of San Carlos and San Bruno and consumer groups—can submit comments on the proposal by Nov. 19 and respond to others’ comments by Nov. 25.

PG&E spokeswoman Brittany Chord said, “We’re reviewing the proposal and will respond by the process set by the commission.”

In a brief submitted to the commission this fall, the utility contended it had made “a good faith attempt to provide formal notice of the error” and said its July 3 filing was “not a purposeful, reckless or grossly negligent attempt to mislead.”

San Carlos City Manager Jeff Maltbie said, “We’re pleased to see the PUC took strong action in proposing such a fine. I would call it a good start.

“We’re hopeful this will be the first of many fines to come,” Maltbie said.

In a separate proceeding, the PUC is currently looking into the safety of Line 147 and has ordered PG&E to operate the line at reduced pressure of 125 pounds per square inch for the time being.

The PUC action came after San Carlos officials learned earlier this month of internal emails written by PG&E engineers in November 2012 that expressed concerns about record inaccuracies for Line 147 and the fact that the pipe is thin and had showed corrosion.

One consulting engineer wrote, “Are we sitting on another San Bruno situation?”

PG&E has said it has looked into those concerns and extensively checked on the pipe and maintains that Line 147 is safe. A hearing before Bushey in the San Carlos investigation is scheduled for Nov. 15.

In the broader post-San Bruno proceeding concerning general pipeline safety, the commission ordered PG&E in 2010 to temporarily reduce the pressure in Lines 101 and 147 from 375 to 300 pounds per square inch.

The utility submitted the previous incorrect data to the commission in 2011 as part of an application in which it won permission to restore the pressure in the two lines to 365 pounds. It said that four sections of Line 147 were either seamless or had double-arc welds.

In the correction, PG&E said the four segments in fact had single-arc welds, which would lead to a requirement for lower pressure.

After learning of the errors, but before submitting the public correction, PG&E reduced the pressure in Line 147 to 330 and Line 101 to below 300.

Bushey wrote that PG&E completed its internal investigation of Line 147 in March and informed the commission’s safety enforcement staff of its errors on March 20. She calculated the fine period as starting on that date.

A consumer group, The Utility Reform Network, or TURN, had urged a fine of $12.7 million, with the penalty period dating back to PG&E’s initial discovery of record inaccuracies when its engineers repaired a minor leak in Line 147 in October 2012.

Julia Cheever, Bay City News

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