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PG&E Fined $24.3M For Gas Distribution Pipeline Violations

A California regulatory judge on Wednesday assessed a $24.3 million fine against Pacific Gas and Electric Co. (PG&E) for failing to maintain accurate records on its natural gas distribution system. The action adds to a previous $10.8 million penalty for an incident two years ago in Carmel, CA.

California Public Utilities Commission (CPUC) Administrative Law Judge Maribeth Bushey said PG&E's violations included both systemic failures and isolated mistakes, imposing the bulk of the fines for the systemic missteps. Bushey's decision becomes a final action of the five-member CPUC in 30 days unless one of the parties in the case appeals or one of the five CPUC commissioners asks for a review.

A CPUC review could either change the decision or uphold it.

PG&E officials said they were reviewing the decision. "We've made significant improvements to our distribution records to promote safety, reduce risk and enhance reliability," said a utility spokesperson.

The fine, the latest in a series against the San Francisco-based combination utility (see Daily GPISept. 6, 2013), is the result of a proceeding on PG&E's recordkeeping opened in November 2014 related to a half-dozen incidents during recent years. Bushey determined that the utility's inaccurate records were relied upon for locating and marking underground pipeline facilities in anticipation of excavation by third-party contractors. This led to damages to the distribution system in a number of instances.

Besides a house leveling explosion in March 2014 in Carmel, the Bushey cited five other incidents from Sept. 17, 2010 -- a week after a PG&E high-pressure transmission pipeline ruptured, causing an explosion that killed eight people in San Bruno, CA (see Daily GPI, Sept. 13, 2010) -- to July 30, 2013, when inaccurately mapped or incorrectly recorded pipelines and facilities led to damage of the PG&E distribution system by third-party excavators.

"With the citation previously assessed for the Carmel incident, the total fine imposed on PG&E for distribution system incidents is $35.1 million," Bushey said. The third-party excavators rely on the utility maintaining accurate records for locating and marking underground facilities, she said.

Evidentiary hearings in the case were held for two days in January with witnesses for both the CPUC Safety Enforcement Division (SED) and PG&E being cross-examined, along with testimony from consumer watchdog The Utility Reform Network and representatives from Carmel.

SED recommended that the utility be assessed a fine of nearly $112 million to be paid to the state's general fund. PG&E opposed this and said it has successfully located and marked 99.98% of more than a half-million requests for digging by excavators that it receives in a typical year.

Since the San Bruno transmission pipeline explosion, PG&E has been fined more than $2 billion by the CPUC (see Daily GPIJune 10, 2013). Earlier this year, the giant utility was facing fines of more than $100 million for past natural gas system record-keeping errors that contributed to pipeline failures and explosions (see Daily GPIMarch 1).

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