Pacific Gas and Electric Co. (PG&E) lost twice Thursday as California regulators denied the utility’s appeal of a $16.7 million staff-imposed pipeline fine and assessed a separate $3 million penalty for shoddy record-keeping.

The move was not unexpected given two proposed decisions released last month (see Daily GPI, April 16). The fines are payable by PG&E shareholders to the state’s general fund. A PG&E spokesperson told NGI the utility will not appeal the $16.7 million fine in court.

“PG&E understands that when we make a mistake, we must own up. That’s what happened when our employees brought the missed leak survey maps to our attention last year,” said Nick Stavropoulos, executive vice president for gas operations. “As we stated in our appeal, we believe the penalty amount is excessive because we did the right thing by promptly self-reporting the violation.

“Even though the commission did not agree with our position on this penalty, we will not hesitate to continue self-reporting when we find anything that could compromise public safety.”

The $16.7 million penalty stems from a citation issued under newly acquired powers by the California Public Utilities Commission’s (CPUC) Consumer Protection and Safety Division (CPSD) for PG&E’s alleged failure to conduct gas leak detection surveys in seven cities in the East San Francisco Bay in Contra Costa County. The missed surveys involved some facilities installed as far back as 1993, said a CPUC spokesperson.

PG&E had appealed the fine — one of the largest ever — and CPUC administrative law judge (ALJ) Maribeth Bushey concluded that PG&E should pay the fine. The CPUC upheld the judge’s recommendation as a consent agenda item.

Separately, the state regulators approved the same ALJ’s recommendation that PG&E be fined $3 million for failure to comply with a CPUC pipeline records search directive. PG&E had already agreed to pay the fine in a settlement reached late last year (see Daily GPI, Feb. 27).

In March the CPUC approved an order that directed PG&E to appear at a hearing to show why it should not be found in contempt and fined.

“The CPUC’s penalty consideration case into whether the combination utility’s gas transmission pipeline record-keeping violated the law, and if so whether deficient record-keeping caused or contributed to a pipeline rupture in San Bruno Sept. 9, 2010, is a separate matter and is ongoing,” said the CPUC spokesperson, meaning additional fines could be forthcoming.

In a third action the CPUC expanded an ongoing proceeding to develop a broader crackdown on all in-state gas pipeline operators by requiring tougher management and financial audits of their natural gas operations. The latter is mandated by a new state law (SB 705).

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