Former U.S. Sen. George Mitchell has been appointed to serve as mediator in ongoing talks aimed at resolving a series of enforcement cases against Pacific Gas and Electric Co. (PG&E) stemming from a natural gas transmission pipeline rupture and explosion two years ago in San Bruno, CA, the California Public Utilities Commission (CPUC) said.
Mitchell, who served as U.S. Special Envoy to Northern Island, President Obama’s Special Envoy to the Middle East and head of Major League Baseball’s steroid investigation, will serve as mediator in ongoing negotiations among PG&E, the CPUC’s safety enforcement staff and other parties to the proceedings, which include the city of San Bruno, the city and county of San Francisco, the CPUC’s Division of Ratepayer Advocates, as well as ratepayer advocacy group The Utility Reform Network.
“We are confident Sen. Mitchell can help achieve a solution that will resolve these cases sooner rather than later, bring justice to the good people of San Bruno, and move California forward to our goal of a much safer natural gas system,” said CPUC President Michael R. Peevey.
PG&E said it supports Mitchell’s appointment. “Sen. Mitchell has a distinguished career, including experience presiding over many complex negotiations,” said PG&E’s Tom Bottorff, senior vice president of regulatory affairs. “We are committed to working with Sen. Mitchell and the Commission to achieve a fair and comprehensive settlement of these issues.”
PG&E CEO Anthony Earley has said he expects a “global settlement” with the CPUC before the end of this year (see Daily GPI, Aug. 8).
CPUC’s safety staff alleges that PG&E committed significant violations of pipeline safety rules, which staff claims contributed to the blast (see Daily GPI, Sept. 13, 2010). Earlier this year PG&E criticized a CPUC staff assessment of its pipeline safety practices, although it did not dispute its liability for the San Bruno pipeline rupture and explosion (see Daily GPI, July 2).
Any stipulation agreed to in the mediation process must be publicly filed with the CPUC and considered by the CPUC’s five Commissioners in public after an opportunity for public review and comment.
Last week the CPUC issued a proposed decision that would authorize a pipeline safety enhancement plan proposed by PG&E and require the utility to absorb about two-thirds of the cost (see Daily GPI, Oct. 15). PG&E had requested $768.7 million in rate increases through 2014 to cover the initial costs of the plan. The proposed decision allows only $277.8 million, or 36%, of the requested amount over that period due to “PG&E’s past imprudent management,” the CPUC said. The plan includes pressure testing of 783 miles of pipeline; replacement of 186 miles of pipeline; installation of 228 automated valves; and upgrades to 199 miles of pipeline to allow for in-line inspections.
Most of the wrongful death lawsuits and serious injury cases related to the San Bruno rupture have been settled (see Daily GPI, Sept. 4). It is estimated that PG&E will pay out $1-2 billion in legal settlements and regulatory imposed penalties in the next few years (see Daily GPI, Feb. 16).
Mitchell, a Democrat, represented Maine in the Senate from 1980 to 1995, serving as Senate majority leader from 1989 to 1995. He is the chairman emeritus of law firm DLA Piper LLP and will be assisted by lawyers from that firm in his role as mediator, the CPUC said.
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