PG&E Faces Big Fine for Flawed San Carlos Pipe
By Jaxon Van Derbeken
Chronicle Staff Writer
Pacific Gas and Electric Co. should pay a $6.75 million fine for delaying the disclosure of record-keeping flaws on a San Carlos gas pipeline that were "distressingly similar" to problems that contributed to the San Bruno gas line disaster of 2010, a regulatory judge ruled Wednesday.
In a sternly worded recommendation to the California Public Utilities Commission, Administrative Law Judge Maribeth Bushey concluded that PG&E showed "a lack of candor and appreciation of the public interest" by waiting several months to formally notify the state of the problems on its San Carlos gas transmission line.
When PG&E finally disclosed the problems, it did so in a routine filing that gave no acknowledgement of the gravity of such flawed records, the judge said. The utility has insisted all along that the line has been tested and is safe.
PG&E cut pressure on the San Carlos line and other nearby lines after a transmission pipe exploded in San Bruno in September 2010, killing eight people and destroying 38 homes. In persuading state regulators to allow it to boost pressure back to preblast levels in San Carlos in 2011, PG&E said it had conducted a high-pressure water test designed to check for problems in accordance with its records on the pipe's specifications.
When it repaired a leak on the line last October, however, PG&E discovered its records were wrong. Parts of the line listed as seamless in the files actually had notoriously problematic seam welds that dated from the 1920s.
Flawed from the start
PG&E was similarly unaware it had welds on the portion of the San Bruno line that exploded, so it never conducted tests that might have exposed problems. Several of the welds were flawed from the day that they were installed in the mid-1950s and one finally ruptured, causing the blast.
After PG&E discovered the San Carlos record-keeping problem, a consulting engineer asked in an internal e-mail in November 2012 whether the pipe could pose the risk of "another San Bruno situation."
PG&E didn't tell the Public Utilities Commission staff about the inaccurate records until March, however, and didn't file paperwork with the commission until July 3. When it did, Bushey said, the company told regulators that the problems were apparently minor "errata."
In fact, Bushey said, the documentation flaws were "distressingly similar" to the inaccurate records on the San Bruno pipe. She accused PG&E of trying to pass off the problem as "a routine and nonsubstantive" issue.
PG&E spokeswoman Brittany Chord had no comment on the ruling. "We are reviewing the proposed decision" and will file a response next month with the five-member utilities commission, she said.
The commissioners, appointed by the governor, will vote on whether to uphold the fine.
The 20-inch San Carlos pipe, known as Line 147, runs almost 4 miles and connects a pair of larger transmission lines that run up the Peninsula to San Francisco. The portion with the antiquated welds was discovered at Rogers and Brittan avenues.
After learning of the flawed records and existence of problematic welds, the utilities commission ordered PG&E this month to reduce pressure on the line by about two-thirds until the company can prove the pipe is safe.
PG&E's lead lawyer, Joseph Malkin, who submitted the July filing to the commission, testified before Bushey that he had acted in good faith and had no intention of misleading regulators or downplaying the problem. In retrospect, he said, he should have alerted the commission before he made the filing.
In her ruling, Bushey said Malkin's testimony "is not credible because it is not logical."
Malkin, who has "decades of experience," knew better than to slip news of a major problem into a matter-of-fact filing on a closed case, the judge said.
"Attempts at legal exculpation have no place in our proceedings to address these urgent issues," Bushey said. "PG&E needs to rebuild the commission's and the public's trust in the safety of its operations."
Fining the company, she said, is necessary to "ensure safe operations and to restore public trust."
Bushey noted that the National Transportation Safety Board had expressed "justifiable alarm" about the company's faulty records in its investigation of the San Bruno explosion. She said PG&E admits it had the "absolute obligation" to bring the San Carlos problem to the commission promptly.
"It is not credible that PG&E's engineers and executives did not recognize the provocative nature of these facts in light of the intense public interest in natural gas pipeline safety," Bushey said. The "unreasonable delay" in reporting the problems, she said, "had the effect of misleading the commission and the public."
State Sen. Jerry Hill, D-San Mateo, a vocal critic of PG&E whose district includes both the San Bruno blast site and San Carlos, said the fine is justified.
"It is an appropriate fine, but it doesn't deal with the safety issue that was disclosed by their inaccurate record-keeping," Hill said. "How many more pipes, how many issues are there out there?"