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California Regulators Launch Safety Probe of PG&E

California regulators on Thursday unanimously agreed to investigate the safety operations and culture at San Francisco-based Pacific Gas and Electric Co. (PG&E) following a string of incidents over the last five years.

The five-member California Public Utilities Commission (CPUC), itself the target of criticism for its oversight of PG&E, will attempt to determine whether the utility "has corporate governance, clearly documented organizational goals and objectives, and work procedures that prioritize and improve safety."

Earlier this month, the regulatory panel issued a proposal for an investigation of the safety commitment and culture within PG&E that would be carried out by the commission's investigative unit (see Daily GPIAug. 19).

“A public utility’s track record of safely operating its system is dependent on more than messages and slogans," CPUC President Michael Picker said.  "An effective safety culture is shaped by the governance, policies, budget, practices and most of all, the accountability set by the top leadership.”

While the launch was unanimously approved, at least two commissioners had cautionary words directed at the upcoming probe, for which the CPUC will retain an outside expert.

Commissioner Carla Peterman encouraged the regulators to look at the broader industry-wide context for the various safety lapses at PG&E dating back to the September 2010 San Bruno gas transmission pipeline failure and explosion, which killed eight people.

"While we have outlined a number of incidents with the PG&E pipeline infrastructure since San Bruno, I find the information has not been put in the context of similar instances that may have occurred in similar utilities over the same time period," Peterman said. "I'd be interested in knowing how other utilities have fared during that time and how has PG&E fared relative to the rest of the nation." She said regulators need to be mindful of what are realistic expectations for utilities.

"We need to get to the root of the problem and determine why PG&E keeps having safety-related issues," Picker said, calling the large utility's performance "uneven." The CPUC Safety and Enforcement Division has been authorized to hire an independent expert and set a budget of $2 million for the investigation.

CPUC staff cited "systemic issues" at PG&E previously identified by an independent review panel hired by state regulators and a separate report from the National Transportation Safety Board following the San Bruno explosion (see Daily GPISept. 27, 2011).

Commissioner Mike Florio said he supports the probe but that it is "important to distinguish" this investigation from numerous ones already completed or ongoing related to PG&E safety operations. "Those were all backward-looking to determine if rules were broken and penalties required," Florio said. "This is really current and forward-looking."

He called the new investigation an "opportunity" for PG&E to demonstrate the progress it claims to have made in the past few years. "The company is saying the right things, and this is an opportunity to find out if the reality on the ground matches the rhetoric."

"As we have said since this was originally announced, we look forward to a constructive dialogue with the commission and staff and to sharing our commitment to safety and the concrete actions we have taken over the last several years to back it up," PG&E spokesman Keith Stephens said. "We've made incredible progress toward our goal of becoming the safest and most reliable energy provider in America, but we have more to do and we won't rest until it’s done and done right."

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