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State Regulators Join San Francisco, PG&E Pipe Fray

A standoff between the city of San Francisco and its major private-sector utility, Pacific Gas and Electric Co. (PG&E), which is preventing the last few miles of outdated cast iron natural gas pipelines in the city from being replaced, has caused state regulators to enter the dispute.

California Public Utilities Commission (CPUC) Chief Counsel Frank Lindh wrote San Francisco City Attorney Dennis Herrera Thursday threatening to invoke state preemption over a local ordinance placing excavation moratoriums over some areas of the city in which the old pipelines now lie. Appeals earlier by CPUC officials, including President Michael Peevey, have not been able to break the administrative logjam between PG&E gas pipeline crews and San Francisco's Public Works Department.

The CPUC on Thursday directed Lindh to contact the city/county's top legal official, citing gas pipeline safety issues over which the CPUC is the state's chief regulator. CPUC officials earlier in the summer reminded the city that last year a natural gas leak from a 12-inch diameter cast-iron gas pipeline main that dated to 1928 caused an explosion that killed five people and destroyed several buildings in Allentown, PA (see NGI, Feb. 21, 2011).

No other utility now regulated by the CPUC has any remaining cast iron pipeline in its local distribution operations, the CPUC said. PG&E has worked steadily during the past 26 years to whittle down its more than 800 miles of the 60-year or older pipe from its system, leaving only 48 miles, 43 miles of which are in San Francisco.

Lindh said the remaining 43 miles of pipe in the is dangerous and the utility is prepared to complete the work to replace it. "The utility company, however, has been barred by the city's public works department from completing this important safety project due to a city street paving ordinance," he said.

Lindh told the city attorney that the CPUC's jurisdiction over pipeline and gas utility safety -- under federal law -- trumps the local city paving ordinance. "The law on this subject is not in doubt," Lindh said. "As I hope you [the city attorney] will quickly recognize, the city's street paving ordinance is preempted and therefore of no lawful effect as applied to a commission-regulated utility embarked on a commission-supervised pipeline safety initiative."

The city attorney's office had no reaction last week to the CPUC's move, and the state regulatory commission's spokesperson would not speculate on whether PG&E eventually would move forward with or without the city's blessing.

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