Pacific Gas and Electric Co. (PG&E) on Wednesday asked California regulators to approve an agreement the utility made with regulatory staff on an accelerated compliance plan and payment of up to $6 million in penalties.

The proposed agreement, in which PG&E does not admit to misconduct, resulted from the utility’s alleged lack of responsiveness in verifying its gas system’s safety following the rupture of one of its transmission pipelines in San Bruno, CA, last September. The stipulated agreement, for which the staff filed its own motion with the California Public Utilities Commission (CPUC), includes PG&E’s acknowledgment that the CPUC could assess additional financial penalties.

While the five-member CPUC has come down the hardest on PG&E in alleging its “willful failures” to search its records and calculate the maximum allowable operating pressures (MAOP) for its transmission pipelines in highly populated areas, the stipulation and agreement were hammered out with the CPUC staff at its Consumer Protection and Safety Division (CPSD).

The CPSD has continued to maintain that PG&E failed in its March 15 filing to fully comply with the state and federal directives it received in January after a National Transportation Safety Board (NTSB) interim report on the San Bruno pipeline rupture that killed eight people Sept. 8 (see NGI, Jan. 10).

PG&E told the CPUC in its filing that its agreement with the staff is preferable to continuing with an order to show cause proceeding that would “require substantial time and resources” for both the CPSD and the utility.

“Rather than engage in extensive litigation to determine whether the scope and speed of PG&E’s efforts and the clarity of its related communications with the commission constitute an ‘indifferent disregard’ of [the utility’s] duty to comply, PG&E believes the focus should be on ensuring the accuracy of [utility] records and the future safety of its pipeline operations,” the PG&E filing said. It said the agreed-upon penalty was “reasonable.”

The stipulation by the utility has two primary parts: $6 million in penalties and the new compliance plan, which is supposed to result in MAOPs for all of the utility’s HCA pipelines without engineering-validated pressure tests by Aug. 31.

The penalty stipulation calls for PG&E to pay $3 million within 10 days after the CPUC approves the agreement, and another $3 million if the CPUC finds that the utility “inexcusably” failed to meet a compliance plan milestone. The compliance plan requires PG&E to submit monthly reports to the CPUC and confer with the CPSD regulatory staff as the MAOP validation progresses, including any assumptions the utility plans to use and the field work it plans to conduct as part of its verifications.

PG&E has agreed to a “very, very aggressive schedule” to validate the MAOP of all of the utility HCA pipelines that have not been pressure tested, a PG&E utility spokesperson told NGI before the utility filing last Wednesday, adding that the utility agreed with the CPUC that the current exemptions for some pipelines should be revisited.

PG&E also has proposed outside the stipulated agreement to undertake a “very aggressive plan” for hydrostatically testing 150 miles of HCA pipelines this year. In total, through the stipulated and other agreements the utility is committed to test up to 705 miles of HCA pipelines.

The utility spokesperson reiterated that PG&E has proposed going well beyond the pressure testing of all of the HCA pipelines to do MAOP engineering analysis for all of the HCA pipelines that have been pressure tested already. “This is just an additional safety measure we want to do,” the spokesperson said.

In total, PG&E’s natural gas system includes 1,805 miles of transmission pipeline in HCA areas, such as the residential section in San Bruno where the fatal explosion and fire occurred last September. The first 705 miles of those miles are included in the accelerated schedule proposed for pressure testing. “In addition to that, we will be completing an engineering analysis of all the miles of HCA pipeline that have been pressure tested to provided an added level of safety,” the spokesperson said.

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