The $2.25 billion penalties proposed by the California Public Utilities Commission (CPUC) Safety and Enforcement Division for the San Bruno, CA, pipeline explosion in September 2010 “far exceed anything that I have seen in my 30 years in the industry and fail to appropriately account for the actions taken by the company,” PG&E Corp. CEO Tony Earley said late Monday.

The CPUC safety division recommended the penalties — the largest ever recommended at the state or federal level — for three penalty cases that arose following the Pacific Gas and Electric Co. rupture nearly three years ago (see Daily GPI, May 7). City of San Bruno officials had recommended the same amount also on Monday.

Earley last week had said settlement talks for outstanding regulatory cases had broken down, and he said the issues would be litigated at the CPUC (see Daily GPI, May 6; May 3). The three cases being reviewed by the CPUC regard PG&E’s gas transmission operations in or near locations of higher population density, record keeping practices and the San Bruno explosion.

“I understand the desire to punish PG&E,” said Earley. However, he said he was “deeply concerned that an excessive penalty, such as those proposed, could dramatically set back our efforts to do the right thing by making it harder and more costly to finance the remaining improvements that are needed in our gas system. To avoid this, it is essential that the commission take a more balanced approach in rendering its final decision.

“Since this tragic event occurred, PG&E has been clear in its commitment to take full accountability, to address the needs of victims and, most importantly, to transform this company into the safest gas provider in the country.” Among other things, Earley said management “recruited a leadership team comprised of the best gas operators in the industry,” including Nick Stavropoulos, executive vice president of gas operations.

“This team has made remarkable progress toward our goal of building the safest system,” Earley said. “In just over two years, we have completed seven of the 12 recommendations made by the National Transportation Safety Board. PG&E’s shareholders have funded $1.4 billion of these improvements. No other gas utility has completed safety work on this scale.”

Earley said there was “much more work to do.” As of December, PG&E had spent more than $1 billion on pipeline testing, upgrades and maintenance since September 2010 (see Daily GPI, Dec. 20, 2012). PG&E this year plans to strength-test or validate 189 transmission miles; replace 59 miles of pipeline; automate 67 valves; retrofit 121 miles of pipeline for in-line inspections; and perform in-line inspections of 78 miles of pipeline.

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.