In what has become a public relations -- and financial -- concern, California regulatory staff on Tuesday slapped Pacific Gas and Electric Co. with an $8.1 million citation for allegedly failing to meet federal requirements in inspecting part of its natural gas transmission pipeline system earlier this year.
The California Public Utilities Commission (CPUC) safety staff said the focus is on contractor work for radiographic tests of pipeline girth welds. The tests were allegedly not in compliance with federal codes and CPUC requirements. In response, PG&E said it will present the CPUC with a review of the quality assurance processes associated with the inspections.
Regulatory staff called the allegations "serious lapses" by the San Francisco-based utility at a time when PG&E has been blistered by other proposed penalties of up to $17.25 million (see Daily GPI, Nov. 5). This latest black mark also is in the midst of a series of investigations in the wake of the September 2010 San Bruno pipeline rupture and explosion that resulted in a proposed $2.25 billion fine (see Daily GPI, June 7).
"It is totally unacceptable that prior to March -- two and a half years after San Bruno -- PG&E could employ contractors for important testing that would do such shoddy work, and still more unacceptable is that PG&E would do such poor quality control of their contractors," said CPUC's Jack Hagan, who directs the Safety and Enforcement Division. "Today's citation is only the latest reminder to PG&E that is serious lapses in management will not be tolerated."
PG&E Executive Vice President Nick Stavropoulos said an unannounced inspection by PG&E last March found a third-party contractor incorrectly performing a radiographic assessment of a girth weld.
"As a result of its inspection, PG&E immediately removed the contractor from the project and conducted an in-depth examination of records and a sample of welds," Stavropoulos said. To date, the utility has found close to 490 radiographic images from the same contractor that do not comply with code requirements, he added. Only two images were taken of the welds when three must be done before a pipeline can be put into service.
The problems were found on a transmission pipe in Brentwood on the East Bay, and PG&E has not identified any safety issues or issues with the integrity of any girth welds, a utility spokesperson said.
PG&E acknowledged that the radiographic images were below standard, and thus the utility violated required standards. As a result, the utility said it will draft a quality assurance plan for the CPUC that addresses the work of all the firms it has retained to do the radiographic testing.
PG&E said the CPUC had documented an investigation of the quality of its welding in 2012 and in September 2012 issued a report that "found no evidence of substandard welding work," a spokesperson said.
As part of the staff citation, PG&E was directed to expand its transmission pipeline leak survey program; develop a comprehensive plan for noncompliant radiographic testing; expand an existing corrective action plan to address noncompliant radiographic testing; engage with affected communities within 10 days to explain the safety implications of noncompliant radiographic testing; and present an overall plan that ensures the radiographic testing is performed "in accordance with industry standards and in a manner compliant with applicable codes and regulations.