In reporting a sharp uptick in quarter-over-quarter earnings Monday, PG&E Corp. CEO Anthony Earley predicted that its San Francisco-based utility, Pacific Gas and Electric Co., will resolve pending regulatory and enforcement issues related to the fatal San Bruno natural gas transmission pipeline rupture and explosion two years ago.
Earley fielded questions on the San Bruno issues from financial analysts during a conference call in which PG&E reported 3Q2012 income of $361 million, or 84 cents/share, compared with $200 million, or 50 cents/share, for the same period last year when the utility booked significant one-time charges related to San Bruno and other outstanding legal issues.
Earlier this month PG&E encountered setbacks in pending cases related to the San Bruno tragedy as the California Public Utilities Commission (CPUC) issued a proposed decision on the utility’s multi-year, multi-billion-dollar pipeline enhancement plan, which would require PG&E shareholders to absorb two-thirds of the initial costs (see Daily GPI, Oct. 15). Last Friday the CPUC announced it had dropped attempts at a mediated settlement among PG&E and various San Bruno parties (see Daily GPI, Oct. 29).
Earley said the state regulatory staff’s proposal “fails to recognize that much of work [to upgrade the utility pipeline system] has been created by new standards and requirements” imposed since the San Bruno incident, which killed eight people. He also reiterated PG&E’s belief that a mediated settlement of the enforcement cases would be the best approach.
In both cases, Earley said he is “optimistic” that the CPUC will see the merits of the utility’s pipeline plan being supported by ratepayers and that a settlement of the enforcement cases can still be achieved before the end of this year, although it likely will not be approved by the CPUC until sometime next year.
“While we are deeply disappointed in the proposed decision we will continue to move forward with projects to meet new safety standards, and we will continue to work with regulators and others to reach a balanced agreement that resolves the various regulatory issues and provides adequate support for critical investments,” Earley said.
Noting that shareholders have paid for nearly all of the $915 million spent so far in pipeline-related work in San Bruno’s aftermath, PG&E utility President Chris Johns said 85 miles of transmission pipelines were tested in 3Q2012 and an additional 350 miles will be completed through 2014.
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