The California Public Utilities Commission (CPUC) last week unanimously (5-0) ordered Pacific Gas and Electric Co. (PG&E) to face a show-cause hearing today (March 28) over what the regulators unequivocally have determined is the utility’s lack of compliance in ongoing state and federal investigations of the Sept. 9 natural gas transmission pipeline rupture in San Bruno, CA. Separately, PG&E and the CPUC staff have worked out a preliminary stipulated resolution to correct the situation on an accelerated basis.

The CPUC staff now has what its general counsel calls essentially a consent decree in which the utility agrees to a $6 million financial penalty and a new compliance plan. Under this arrangement, the utility is not admitting it did not comply, but is agreeing to pay the fine and to pursue the new compliance to pressure test up to 600 miles of transmission pipelines in high consequence areas (HCA). This staff-initiated stipulation, including the fine, will be considered at Monday’s hearing and would require separate approval by the CPUC.

Under increasing criticism from state and federal regulators, PG&E said it favors phasing out the practice of using historic operating pressures to establish the maximum allowable operating pressures (MAOP) for pipelines in heavily populated areas. The utility favors this change for pipelines in California and nationally.

PG&E has come under a lot of heat for its latest report to the CPUC that referred to the historic operating pressure method as having been applied to a number of its gas transmission pipelines in high-consequence areas (HCA) such as the quiet residential part of San Bruno where last Sept. 9 a PG&E pipeline (Line 132) ruptured.

PG&E’s latest report raised concerns regarding whether there was sufficient testing to support the MAOPs for the pipelines in and around San Bruno (see NGI, March 21). PG&E filed the report with the CPUC in mid-March, and regulators said the MAOP documents “do not appear responsive to [our] order to comply with the National Transportation Safety Board (NTSB) directives to compare installed pipe to as-built drawings and calculate MAOP based on the weakest section of the pipeline or component.”

State regulatory show-cause and penalty action stem from an interim report in early January from the NTSB and the CPUC’s subsequent order for PG&E to thoroughly review its system records to determine if pressure testing had been completed on all of its pipelines in heavily populated areas (see NGI, Jan. 10). Concerns were raised as to whether there was sufficient testing to support the MAOP for the pipelines.

Based on PG&E’s latest submittal, the CPUC said it concluded that the utility is currently operating 8% of its natural gas transmission pipeline system “without documents supporting the purported MAOP.”

Since the CPUC’s publicly expressed criticism, PG&E has shown improved responsiveness to the state regulators as was evidenced by the its stipulated agreement with the CPUC staff headed by its Executive Director Paul Clanon. Nevertheless, Commissioner Michel Florio said he was “alarmed” that PG&E has acknowledged that more than 600 miles of high-pressure transmission pipelines in HCA areas “appear to have no records that they were pressure tested.”

While he said he was encouraged by PG&E’s most recent compliance actions and stipulation with the staff, Florio said he hoped the show-cause order “will send PG&E a clear message that we will not tolerate noncompliance through this [ongoing investigative] process. This commission has a constitutional, legal and moral duty to protect natural gas customers, and we must do everything in our power to make sure we live up to these obligations.”

After voting on the show-cause hearing, the commissioners received a report from Clanon on the CPUC staff’s separate negotiations with senior officials at the San Francisco-based combination utility. With a subsequent filing March 21, PG&E has made a “good-faith effort” to take steps in the right direction, Clanon said.

While it thinks it has made some “good progress” on validating pipeline records, PG&E said earlier in March it is “not satisfied with the results to date” and acknowledged needing to do more. PG&E said it will continue culling its records on pressure testing and will make regular reports to the CPUC. The utility maintains that it is following the Jan. 3 edict from state regulators.

“[We] support the thoughtful review and enhancement of existing safety standards, including phasing out the use of historic operating pressure to establish MAOP of pipelines in California and nationally,” a utility spokesperson told NGI.

On Tuesday PG&E’s Kirk Johnson, vice president for pipeline engineering, answered questions about the utility’s earthquake preparedness in the wake of the Japan disaster at a state Senate Select Committee on Earthquake and Disaster Preparedness hearing in Sacramento. Johnson and a Sempra Energy utility executive reiterated that gas pipeline systems can survive pretty well in most quakes, although there is still more work in some identified crossings of major faults to design and engineer around potential displacement of the earth.

General violent ground movement that occurs with quakes of a 6.0 magnitude or greater is not usually disruptive to gas pipeline systems, but severe displacement of a few feet or more along active faults could be problematic. Thus, PG&E and Sempra’s Southern California Gas Co. (SoCalGas) and San Diego Gas and Electric Co. (SDG&E) are working to ensure that the latest techniques, materials and technologies are used wherever major gas pipelines have to cross known active earthquake faults.

“PG&E has mitigated to date 15 earthquake fault crossings, and we have plans to modify several additional crossings,” Johnson told the state legislative committee. “In addition, as part of our 2020 [pipeline upgrade] Program, we will be proposing the installation of automatic shutoff valves on several pipelines that cross faults.” (These would be pipes of 8 inches in diameter or greater in HCA areas crossing active faults with a greater than 2% chance of a quake occurring in the next 30 years, he said.)

Historically, Sempra Energy’s utility engineering vice president Joe Rivera said, there have been 11 major earthquakes (magnitude 5.8 to 7.3) in Southern California since 1933, and in five of those quakes the gas utility system did sustain what he called “some significant damage,” the most recent being the 1994 Northridge quake.

Rivera said that since 1984 SoCalGas and SDG&E have had a comprehensive pipeline system upgrade effort, including “seismic upgrades on all of our above-ground facilities, new transmission pipelines using the latest design criteria for crossing faults, a 10-year large-scale program to get rid of all pre-World War II piping, and a fault-crossing program for existing pipelines in which we are going pipeline-by-pipeline to assess that crossing and making the necessary upgrades to protect that system.”

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