Leaving the job of finding the cause of last Thursday's San Bruno pipeline disaster to federal investigators, California's lead utility regulator and Pacific Gas and Electric Co. (PG&E) assured energy utility customers that everything is being done for the victims and public safety.
Following orders from the acting governor and president of the California Public Utilities Commission (CPUC), CPUC Executive Director Paul Clanon sent a letter to PG&E President Christopher Johns Monday, directing the San Francisco-based combination utility to take 11 separate steps focused on Line 132, the 30-inch diameter high-pressure pipeline that failed in a residential neighborhood.
First, PG&E was directed to drop by 20% the pressure on Line 132 below what it was at last Thursday at the time of the failure, and keep it at that reduced level until further directed by the CPUC. The utility on Sunday had announced a voluntary 10% drop in pressure to all three transmission pipelines passing through the San Bruno-San Mateo County area (see Daily GPI, Sept. 14).
Separately, PG&E announced Monday the creation of the "Rebuild San Bruno Fund," making available up to $100 million for the residents and city of San Bruno. PG&E Corp. CEO Peter Darbee and Johns met with San Bruno Mayor Jim Ruane and San Bruno residents to announce the fund and pledge their commitment to rebuilding San Bruno, which includes covering the city's costs associated with its response to the event.
"We know that no amount of money can ever make up for what's been lost," Darbee said. "This program is just one piece of our promise that PG&E will live up to its commitment to help rebuild this community and help the people of San Bruno rebuild their lives." To administer these funds on behalf of the company, PG&E said it will partner with government officials, community leaders and organizations, including the American Red Cross and the United Way of the Bay Area.
Two major credit rating agencies split on their initial reaction Monday -- Standard & Poor's Ratings Services (S&P) placed the utility's holding company, PG&E Corp., on "credit watch -- negative," given the potential long-term costs of the disaster in liability payments, but Moody's Investors Service said the company's ratings would be unaffected for now. After dropping 8% on Friday, PG&E stock closed up 5 cents Monday at $44.26/share and gained another 60 cents Tuesday to $44.86/share.
Funds will be used to provide both immediate and long-term support to San Bruno residents and the city for three primary purposes:
Meanwhile, PG&E gas transmission operations were directed to ensure the safety of the whole San Bruno area; complete detailed leak surveys on its transmission pipeline in residential areas and report the results to the CPUC by Oct. 12; establish a plan to inspect the entire PG&E transmission pipeline system and submit it to the CPUC's Clanon by Sept. 23; and examine customer leak complaints and the utility's response to them and report any deficiencies in those past responses.
Further, the CPUC specified six other actions by PG&E: making all employees and contractors necessary available to the National Transportation Safety Board and state investigators; preserving all records related to the incident; preserving all maintenance records on Line 132; reexamining classifications for transmission pipelines to see if they need changing; investigate and report the forecast versus actual transmission maintenance expenses from 2005 to present; and review of all transmission pipeline valve locations.
Also on Monday, PG&E provided San Bruno officials with a check for $3 million to help compensate the city for its estimated expenses incurred to date. The company is also taking steps to assist residents. PG&E will provide disbursements of $15,000, $25,000 or $50,000 per household depending on the extent of damage.
Recent statistics from the Department of Transportation indicate that the natural gas transmission pipeline system "is among the safest modes of transportation in the nation," the Interstate Natural Gas Association of America (INGAA) said Tuesday.
"While PG&E is not an INGAA member, nor was the San Bruno pipeline an interstate pipeline, the tragic events in California underscore the need for and importance of continued high levels of safety practices across the entire natural gas pipeline industry," according to INGAA President Donald F. Santa, who said INGAA looks forward "to any lessons that can be learned from the San Bruno incident following what is certain to be a thorough and important investigation."
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