In Appeal, PG&E Asks For Reasonable, Proportionate San Bruno Penalty That Keeps Focus On Gas Safety

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Pacific Gas and Electric Company (PG&E)

Oct 02, 2014, 06:45 ET

SAN FRANCISCO, Oct. 2, 2014 /PRNewswire/ -- In a filing today with the California Public Utilities Commission (CPUC), Pacific Gas and Electric Company (PG&E) asked that any penalty associated with the 2010 explosion of a natural gas transmission pipeline in San Bruno be reasonable, proportionate and focus on what matters most to all parties involved – investing in gas safety.

In a statement, the company said:

"PG&E deeply regrets the loss of life, injuries, and the effect on the San Bruno community. PG&E has accepted legal and financial responsibility for this tragic accident and has made extraordinary efforts to prevent another such tragedy from occurring. We have respectfully asked that the Commission act to ensure that the penalty is reasonable and proportionate and that it takes into account the company's investments to promote pipeline safety as well as precedents involving other pipeline accidents. Importantly, we believe we can all agree that a final penalty should keep the focus on investments in gas pipeline safety."

Under the CPUC's proposed decision, nearly $1 billion would be sent to the State of California's General Fund and not be dedicated to gas system safety. The proposed decision also underestimates the cost of the penalty and disregards the significant investments PG&E has made since the tragic events of San Bruno.

While the CPUC has characterized the penalty as totaling approximately $2 billion, PG&E believes that the total shareholder impact would reach approximately $4.75 billion, including the previous $2.7 billion in estimated costs that shareholders have incurred or are forecast to incur, to improve and enhance the safety of PG&E's natural gas operations. (The estimated shareholder impact is a forward-looking statement and the ultimate amount of costs could differ materially depending on the scope and timing of work and other factors, many of which are described in PG&E Corporation's and PG&E's recent Securities and Exchange Commission reports.) The largest penalty ever previously assessed in the United States for a gas pipeline accident was $101.5 million.

Here are a few of the concrete actions the company has taken to make safety the cornerstone of its culture following the San Bruno explosion:

Change began at the top with Tony Earley joining the company as CEO in 2011. We restructured our gas operations business and hired the best natural gas experts in the country to run it.
We put 3,500 leaders at all levels of PG&E through safety training and we review the lessons of San Bruno with every new employee.
We have conducted advanced pipeline safety testing, replaced pipe where necessary and installed 150 new automated or remotely controlled emergency shut-off valves.
We built a new gas operations control center, employing the most advanced technology, from which we can monitor the entire system and respond more quickly and effectively to emergencies.
We're using new gas leak detection technology that is 1,000 times more sensitive than before in order to help find and fix leaks before they become a problem. When a customer calls to report a gas odor, we are now among the fastest in the entire industry in responding.
As a result of these and many other efforts, PG&E recently became one of the first utilities ever to earn two of the highest internationally recognized safety certifications—the International Organization for Standardization (ISO) 55001 and Publicly Available Specification (PAS) 55-1. These stringent certifications must be re-earned every year.

In addition, the company has settled claims amounting to more than $500 million with the victims and families of the San Bruno accident, established a $50 million trust for the City of San Bruno for costs related to recovery and contributed $70 million to support the city's and community's recovery efforts. PG&E's appeals to the CPUC can be read here.

About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with more than 20,000 employees, the company delivers some of the nation's cleanest energy to nearly 16 million people in Northern and Central California. For more information, visit www.pge.com/ and http://www.pge.com/about/newsroom/.

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