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PG&E, Regulators Near Approval of Pipeline Agreement

Pacific Gas and Electric Co. (PG&E) will file Wednesday with California regulators its final agreement to pursue an accelerated verification of operating pressures for up to 700 miles of transmission pipeline in heavily populated areas, along with paying a $3 million fine and agreeing to pay an additional $3 million in fines if it fails to meet the new deadlines for completing the pressure testing.

The safety division staff at the California Public Utilities Commission (CPUC) also will file its part of the stipulated agreement, following a show-cause hearing Monday in San Francisco. It was ordered last Thursday as part of the regulators' unanimous determination that the utility has not adequately complied in ongoing state and federal investigations of the Sept. 9 natural gas transmission pipeline rupture in San Bruno, CA (see Daily GPI, March 25).

Separately, PG&E and the CPUC's staff Consumer Protection and Safety Division staff worked out a stipulated preliminary resolution to correct the situation on an accelerated basis, and that is what both were directed to file on Wednesday by the administrative law judge who conducted Monday's afternoon hearing.

The CPUC staff now has what its general counsel calls essentially a consent decree in which the utility agrees to a potential $6 million in financial penalties and a new compliance plan, the final version of which will be approved by the five-member CPUC, presumably next month. Before that decision, the parties in the case -- including a major utility consumer group -- will file their responses to the staff-PG&E agreement by April 8.

PG&E has agreed to a "very, very aggressive schedule" to validate the maximum allowable operating pressure (MAOP) of all of the utility high consequence area (HCA) pipelines that have not been pressure tested, a PG&E utility spokesperson told NGI Tuesday, adding that the utility agreed with the CPUC that the current exemptions for some pipelines should be revisited.

PG&E also has proposed outside the stipulated agreement to undertake a "very aggressive plan" for hydrostatically testing 150 miles of HCA pipelines this year, and that was discussed at Monday's CPUC hearing. In total, through the stipulated and other agreements the utility is committed to test up to 705 miles of HCA pipelines.

The utility spokesperson reiterated that PG&E has proposed going well beyond the pressure testing of all of the HCA pipelines to do MAOP engineering analysis for all of the HCA pipelines that have been pressure tested already. "This is just an additional safety measure we want to do," the spokesperson said.

In total, PG&E's natural gas system includes 1,805 miles of transmission pipeline in HCA areas, such as the residential section in San Bruno where the fatal explosion and fire occurred last September. The first 705 miles of those miles are included in the accelerated schedule proposed for pressure testing. "In addition to that, we will be completing an engineering analysis of all the miles of HCA pipeline that have been pressure tested to provided an added level of safety," the spokesperson said.

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