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PG&E Pipe Issues Occupy Regulators

California regulatory staff has released a report urging "significant penalties" for Pacific Gas and Electric Co.'s (PG&E) lax natural gas pipeline record-keeping and alleging that some of the misclassifications had resulted in pressures that violated federal standards and presented "significant risks" to the general public and went unreported for years.

PG&E has until July 23 to respond to the report; intervenors in the case are to respond by June 25.

The report by the California Public Utilities Commission's (CPUC) Consumer Protection and Safety Division (CPSD) is one of three ongoing CPUC proceedings resulting from the September 2010 pipeline rupture and explosion in San Bruno, CA.

PG&E utility President Christopher Johns recently told the National Transportation Safety Board (NTSB) that the utility had "made many fundamental changes to the operations and management practices throughout our gas organization."

A PG&E spokesperson told NGI the San Francisco-based utility has "completely changed our approach to training for this key role," and that combined with "thorough patrolling and documentation [now] ensures that all our transmission lines are operating at appropriate pressures for their location."

The CPSD said PG&E has admitted its failure to properly identify 898 pipeline segments with class location changes on its gas transmission system. Each failure, the regulatory staff report said, ultimately resulted in a failure to confirm or revise the appropriate MAOP.

"In failing to adequately monitor potential class changes, PG&E failed to provide the necessary continuing surveillance of its pipeline system under federal regulations [49 CFR 192.613]," the report said. "PG&E also admits it either did not patrol, or lacks patrolling records for, more than 100 miles of pipe segments in violation of [federal regulations...49 CFR]."

The CPSD concluded that the repeated violations "presented significant risks to the public and went unreported for many years." PG&E should have recognized the obvious weaknesses in its procedures, failed to meet "even minimum levels of training" for its employees and a showed general disregard for compliance with federal class location safety regulations, according to CPSD.

Johns said the utility last year conducted strength tests and verified strength test pressure records for 214.5 miles of pipeline, and in the first four months this year it completed an additional 37.6 miles as part of its pipeline safety enhancement plan (PSEP), which currently is before the CPUC for approval.

At the suggestion of the NTSB, PG&E has "a comprehensive emergency response procedure" for large-scale emergencies on transmission pipelines. The updated procedure identifies a single person in charge, outlines specific protocols and provides drills and training for key operating employees at the utility.

Meanwhile, in the state legislature several pipeline-related bills are still active, including Assembly Bill (AB) 478, introduced last Tuesday to redirect fines paid by natural gas utilities to help pay for pipeline upgrades. Hill has two other San Bruno-inspired bills. AB 578 would require the CPUC to consider implementation of any gas safety recommendations from the NTSB and AB 1456 would require the CPUC to consider a gas utility's safety performance in determining its future rates.

A critic of PG&E since the pipeline rupture, Assemblyman Jerry Hill (D-San Mateo), whose district includes San Bruno, introduced AB 478 to get any fined paid by PG&E or other utilities to be directed toward paying for the mandated upgrade of its natural gas distribution and transmission pipelines. A similar bill in the state Senate (SB 1350) was held in Appropriations Committee, presumably because the law would erode the state's general fund at a time when California is in the midst of a deficit crisis.

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