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CPUC Judge Recommends $6.75M Fine for PG&E

A California regulatory judge has recommended that Pacific Gas and Electric Co. (PG&E) be fined $6.75 million for allegedly misstating facts to the California Public Utilities Commission (CPUC) regarding an incorrectly classified natural gas transmission lateral on the peninsula south of San Francisco.

CPUC Administrative Law Judge (ALJ) Michelle Bushey has determined that PG&E violated the regulatory panel's rules of practice and procedure by not correcting promptly a material misstatement of fact in a filing to the CPUC and later worsening the situation by "mischaracterizing" and downplaying the seriousness of the correction when filing it as a routine, nonsubstantive correction.

The alleged misrepresentations and misstatements occurred in July, but the case dates back to November 2012, when the 3.8-mile, 20- and 24-inch diameter lateral (Line 147) between longer transmission pipelines traversing the entire north-south expanse of the San Francisco Peninsula was found to be classified incorrectly in PG&E's record keeping system during a routine leak repair.

After the identification, correction and reporting of the lateral, elected officials in the suburb in which it runs, San Carlos, declared an emergency and had the pipeline shut down, although PG&E continued to stress that the line is safe (see Daily GPI,Oct. 10). Eventually, it caused the CPUC to order a show-cause regulatory proceeding, and in that ongoing case, Bushey is now calling for the multi-million-dollar fine.

Dating back to late 2011, PG&E was attempting to get maximum allowable operating pressure (MAOP) limitations on Line 147 and a connecting transmission pipe (Line 101) removed following the completion of hydrostatic testing of the line as part of the utility's efforts following the September 2010 rupture and explosion of another major transmission pipeline in the area in San Bruno.

The presentation of the eventual errors regarding Line 147 were not properly reported, and the ALJ's proposed decision said the utility's approach reflected "a lack of candor and appreciation of the public interest." PG&E officials have strongly rejected this assertion, but Bushey said she found the utility's explanations by the lead counsel for the filing to not be credible.

"PG&E's management knew or should have known that the information about the errors in Line 147 supporting information [to raise the MAOP] would be of great interest to the commission, parties and the public.

"The commission should impose the maximum fine on PG&E for its actions." Bushey proposed the $6.75 million as that maximum.

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