No good answers - Page 4

PG&E sharply questioned at hearing on San Bruno explosion

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Kirk Johnson, vice president of gas operations at PG&E, spoke at the hearing
PHOTO BY REBECCA BOWE


Sen. Mark Leno (D-San Francisco) suggested that the CPUC should exercise more hands-on oversight. "Might it make sense to look at a different way of working with them?" Leno asked. He noted that the San Bruno explosion wasn't the first time a PG&E pipeline failure had resulted in a loss of life or significant property damage. "We've got a pattern here," Leno said. "And we're not doing anything differently. In fact, we're not even fining them."

In 2008, a PG&E gas leak in Rancho Cordova led to a pipeline explosion, killing one person and injuring a few others. Leno reminded the CPUC of this tragedy, demanding to know if the agency had fined PG&E after finding the utility was at fault. It hadn't yet, Clanon responded.

When Leno pressed for an explanation, Clanon said, "We were slow, and we should've been quicker." The utility can be fined up to $20,000 for each violation, Clanon explained — and as things stand, there are no additional penalties for violations resulting in injury or death.

A HARD LOOK

Since the San Bruno pipeline explosion occurred, the CPUC has convened an independent panel of technical experts to assess the disaster, a parallel effort to the NTSB investigation. The committee will issue a set of recommendations on how PG&E should change its design, operation, construction, maintenance, or management practices to improve safety.

"We'll be examining whether there may be systemic management problems at the utility," Clark noted. The CPUC panel may also recommend new legislative changes to allow the state to clamp down on PG&E's activities. "We're taking a hard look at ourselves, and we're taking a hard look at PG&E," Clark said.

One point that's abundantly clear is that the utility does not lack the money to address its system deficiencies. PG&E revenue was $13.4 billion in 2009, its rates are 30 percent higher than the national average, and its shareholders receive a cool 11.35 percent return on equity.

The utility came under fire this past spring for sinking $40 million into Proposition 16 — a ballot measure that would have effectively eliminated competition for the monopolistic utility by snuffing out municipal power programs. Now that its unaddressed repairs in San Bruno and elsewhere have come to light, the company's profits and substantial executive bonuses may come under closer scrutiny.