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Audit Raises Questions About PG&E Pipeline Spending

Information from a state regulatory commission staff audit released on Monday by a local congresswoman raised more questions about the thoroughness of Pacific Gas and Electric Co.'s (PG&E) maintenance repair and replacement work historically on its natural gas transmission pipeline system, and specifically the Line 132 that had a segment rupture in a neighborhood of San Bruno, CA, last September.

In question is a total of $183 million in ratepayer funds authorized by the California Public Utilities Commission (CPUC) in the late 1980s and 1990s for which there is no repair or replacement work accounted for, according to information that Rep. Jackie Speier (D-San Mateo County) made public from the latest CPUC review of the 1987-1999 period. The CPUC said the expenditures were authorized as part of three separate PG&E general rate case decisions during the 13-year period.

In more recent years (2000-2010), PG&E has overspent on pipeline safety-related work, according to the CPUC information provided to Speier's office.

Speier criticized the San Francisco-based combination utility for allegedly scrimping in the past on replacement of pipe that it is now spending millions of dollars to hydrostatically test. In addition, local news reports indicated that sections of Line 132 were all replaced more recently except for a half-mile stretch that includes the segment that failed last Sept. 9, resulting in an explosion and fire that killed eight people and devastated the Glenview neighborhood in San Bruno.

That allegation was not included in the CPUC information that Speier's office released, and a PG&E statement made no mention of it. The utility instead reiterated its commitment to safety and closely reporting its pipeline activities to the CPUC.

"The information released by the CPUC [Monday] highlights PG&E's gas pipeline replacement program (GPRP) and the money spent to achieve the goals of this program," said a PG&E spokeswoman, adding that the GPRP goal is to raise the level of safety in its pipeline system. "There is no greater responsibility than operating a safe and reliable natural gas pipeline system for our customers, and we will continue to work with our regulators and public safety officials as we move forward."

After initially asking the CPUC for the audit in March, Speier on Monday was critical of PG&E concerning the time it has taken to obtain information from the utility. "I am assured by the CPUC that the new monitoring practice will strengthen its oversight of natural gas operators," the congresswoman said.

Noting that the latest audit information confirms that PG&E's gas operations need to be more closely monitored, Speier said, "PG&E is now required to file a safety report twice a year on its operation, inspection and replacement of pipelines with full scrutiny placed on how authorized money is spent. Obviously, this degree of monitoring didn't exist when PG&E decided to forgo replacing aging pipelines in San Bruno in the early 1990s.

"In fact, PG&E decided not to replace the very pipelines it is now going to spend millions to hydrotest. It is tragic that it took a disaster that killed eight people to bring to light the ramifications of $183 million in underspending."

Although asked, PG&E had no specific response to these claims by the congresswoman or in local news media reports.

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