Gas explosion controversy
Sep-17-2010

Pacific Gas & Electric planned in 2009 to replace a section of its gas pipeline just a couple of miles from the section that exploded last week in San Bruno, California, but never spent the $5 million of rate increases to do the work, a consumer watchdog group said Wednesday.

And further, said TURN [The Utility Reform Network], the utility asked for another $5 million for the same project in 2009 -- the year it should have completed the work it hasn't even started -- saying it wouldn't be completed until 2013.

"The money was spent on what they call higher priority work," said TURN senior attorney Mike Florio.

"You can't track the dollars one by one, but we do know they spent $62 million more on management incentive business than they had forecast in 2009," he said. "They spent $60 million on going back and re-doing gas leak surveys that they had botched elsewhere on their system."

PG&E; responded that it "is committed to performing the work necessary to assure the safety of its gas transmission system."

The utility said it had identified the line section as a "high priority project" in the earlier transmission rate filing, but "rescheduled the project" after an updated assessment in 2009. But the company did not explain why it needed an additional $5 million and three years to complete repairs on a section it said in its most recent rate filing was in the top 100 risks for failure.

"Coupled with the consequences of failure of this section of pipeline, the likelihood of a failure makes the risk of a failure at this location unacceptably high," the company said in that filing.

TURN officials think they know where some of the money went -- in 2009, the year PG&E; didn't spend $5 million on fixing the pipeline, the company did spend $5 million on bonuses for six top executives.

"The company's priorities appear to be skewed," TURN executive director Mark Toney said.

The line that exploded in San Bruno was laid down in 1948, as was the section PG&E; was supposed to replace. In the first filing, the utility noted that the "vintage 30-inch pipeline" runs through "several High Consequence Areas." In the second, it said the pipeline was "located in a heavily urbanized area."

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