With its shareholders picking up about 80% of the tab, Pacific Gas and Electric Co. (PG&E) spent more than a half-billion dollars last year on natural gas transmission pipeline/storage safety-related work, according to a report the utility filed with state regulators last Friday. The total was $81.9 million more than a budget settlement approved at mid-year 2011 by the California Public Utilities Commission (CPUC).

The San Francisco-based combination utility spent $512.8 million, with shareholders footing $404.6 million of the bill, according to its semi-annual transmission safety report to the CPUC. State regulators had authorized $430.9 million for 2011 gas transmission expenses as part of a general rate case that pre-dated the September 2010 transmission pipeline rupture and explosion in San Bruno, CA.

Separately on Tuesday, CPUC Executive Director Paul Clanon called on PG&E to hire independent consultants, paid for by shareholders, to examine the utility’s safety and security proposals for both its gas and electricity systems as part of a proposed multi-billion-dollar general rate case. The gas part will incorporate PG&E’s pending pipeline safety plan and recommendations from the CPUC and federal regulators in the wake of San Bruno.

“The CPUC is working on multiple fronts to implement recommendations made by an independent review panel and the National Transportation Safety Board following the rupture,” a CPUC spokesperson said. “As part of this effort, the CPUC began a stakeholder process to integrate safety and security more fully into the ratemaking process.”

In the last half of 2011, PG&E said it surveyed 30,712 miles of pipeline, performing 11,449 facility inspections. These activities included 4,807 miles of pipeline leak surveys performed; 25,616 miles of pipeline patrolled; and maintenance and inspections of more than 3,000 valves and 1,500 district regulator stations. In its highly publicized pressure testing efforts, the utility completed hydrostatic testing of 188.1 miles of pipeline in highly populated areas and completed another 134.5 miles of integrity management assessments.

PG&E has been criticized for allegedly not spending all of the monies authorized in rates for pipeline safety and maintenance work, and it accepted responsibility for things that were not done or were done poorly before, during and after the San Bruno pipeline explosion (see Daily GPI, Sept. 5, 2011).

In its latest report, PG&E said there were no projects planned for last year that were rescheduled to this year. Two large projects were put on hold: rebuilding a compressor at Topock where Southwestern supplies are picked up at the Arizona-California border, and expansion of another transmission pipeline (Line 407), which is not immediately needed because projected load growth has not materialized.

PG&E’s report said that last August the utility’s Pipeline Safety Enhancement Plan (PSEP) was submitted to the CPUC with about $220.7 million of work included for 2011. “While a lot of this work is proposed to be funded by PG&E shareholders in 2011, the PSEP filing proposes cost recovery for pre-1970 pipeline costs, beginning in 2012,” the utility told the CPUC.

In an ongoing proceeding, the CPUC still must determine if PG&E is allowed to put in rates all of its PSEP costs in the next three years. The PSEP carries an estimated $2.2 billion price tag (see Daily GPI, March 1).

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