While Pacific Gas and Electric Co. (PG&E) is making progress in creating a “safety-first culture” in its natural gas pipeline operations, in past years the combination utility lost its safety edge with the merger of its electricity and natural gas utility operations, according to Nick Stavropoulos, PG&E executive vice president of gas operations.

Stavropoulos made the observation Wednesday in response to a question from the head of the California Public Utilities Commission (CPUC) during a CPUC workshop, “Hydrostatic Testing of Natural Gas Pipelines and Lessons Learned.”

The symposium in San Francisco, which CPUC Commissioner Mike Florio called a “check-in” point on PG&E’s ongoing pressure testing of its transmission and distribution pipelines, included Stavropoulos and his management team providing an overview of last year’s testing program of more than 160 miles of pipeline, three small segments of which turned up a leak and two ruptures.

Florio asked about whistleblowing PG&E employees complaining about shoddy work during that testing, but Stavropoulos said he found no evidence of that in reviewing past work and interviewing other employees.

Separately, San Francisco-based utility consumer watchdog group The Utility Reform Network (TURN) blasted the CPUC for excluding some viewpoints, including TURN’s, contending that “transparency” about the pressures being tested and the conditions of the pipes is essential. “We know that high-pressure testing works,” said TURN attorney Marcel Hawiger. “In at least one case, high-pressure testing identified a major problem. We want assurances from PG&E that equally effective methods are used for all potentially dangerous pipelines.”

In outlining the preventive nature of hydrotesting of gas pipelines, Stavropoulos said, “we want to find issues before the issues find us.” Among the 97 separate hydrostatic tests completed in 2011, PG&E found a leak in one segment and ruptures near the highest pressures the pipelines were legally able to operate under in two other segments. “So we found those weaknesses in those pipes before the weaknesses found us.”

CPUC President Michael Peevey asked Stavropoulos to use his 30-plus years of experience in the industry to speculate on how PG&E lost its safety-first orientation in its operations. “How did it slip?”

“I don’t think there is any one thing you can point to over time,” said Stavropoulos, who speculated that the combination of the gas and electric systems surely was one contributor. “Combining the gas and electric operations many years ago probably might have been the beginning [of the problems]. In turn, the process of losing focus on the gas business contributed to the situation because there are very significant differences.”

Stavropoulos pointed to new PG&E CEO Tony Earley, who came from two major combination utilities in his past jobs, as advocating keeping the two operating systems separate. When they’re combined, resources tend to be “sucked away” from the gas operations because the electricity operations are much larger and tend to pull away resources, particularly good employees. “The smartest people in the organization figure out that the electric side is where they need to go,” Stavropoulos said.

Over a period of time dating back to PG&E’s three years in Chapter 11 bankruptcy protection (2001-2004) a lot of management talent was lost on the gas side, he said.

Peevey said the biggest concerns of state regulators is that in creating the greater “safety-first culture,” utilities find ways to sustain that level of operations. Stavropoulos said he has hired a former chair at the National Transportation Safety Board, Jim Hall, who comes in with an outside team every five weeks and make a complete assessment of how PG&E is doing.

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