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PG&E wants to raise bills $12 a month to make 239 pipelines safe

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POSTED July 3, 2012 1:55 a.m.

SAN FRANCISCO (AP) — Pacific Gas & Electric Co. on Monday proposed raising utility customer’s bills by as much as $12 per month to upgrade its gas and electricity systems, as more questions surfaced about the company’s oversight of its gas lines in the wake of the deadly San Bruno explosion.

The company sent its proposal to raise rates by more than $2 billion over three years to California regulators, saying the extra funds were necessary to accomplish a major overhaul of its gas distribution and electrical systems. Much of the money would go to replace older gas lines, install leak detection systems, connect new residential and business customers, replace cables and make other upgrades, the utility said.

The utility has come under fire for poor management of its aging network of gas pipelines since the 2010 San Bruno explosion that killed eight people and destroyed 38 homes in the San Francisco suburb.

The company’s proposal is just the first step in the process used to set natural gas and electricity rates for utility customers, and it will need to be approved by the California Public Utilities Commission. PG&E seeks $1.25 billion in 2014, $500 million in 2015 and $500 million in 2016.

Tom Bottorff, senior vice president of regulatory relations for the San Francisco company, said in an interview Monday the improvements are necessary to “make our system one of the safest in the nation.”

According to a March review by the utility, more than 200 of its high-pressure transmission pipelines still have sections riddled with vulnerable seam welds, the exact failure that federal investigators said prompted the San Bruno explosion.

The 239 problematic pipeline segments span a total of 47 miles throughout Northern and Central California and are at risk of failure because of their age or the company’s previous practice of pressurizing the lines above legal limits, according to the filing.

Among the pipeline segments with “unstable manufacturing seam threats” are extensions of Line 132, the high-pressure transmission line that exploded in San Bruno on Sept. 9, 2010. Investigators later determined an inferior weld on that line caused the accident, although the company had previously maintained the pipe was seamless.

Over the next two years, the company plans to pressure test, replace or otherwise examine the pipeline segments the report identified, the company said.

“This is part of our effort to look at every possible threat to every section of pipe and fix it before it becomes a problem,” said spokesman David Eisenhauer. “It’s something we want to address quickly.”

Regulators will decide what types of upgrades to the company’s high-pressure transmission lines are appropriate in a separate proceeding tied to the aftermath of the San Bruno explosion. The utility faces millions of dollars in fines in a host of proceedings before the commission.

Consumer advocates said the rate increases for distribution line and electrical upgrades weren’t justified, given that the company has also asked for its customers to pay for the lion’s share of a separate plan to pressure-test or replace any untested segments of its transmission lines.

“These increases could push more customers over the edge,” said Mindy Spatt, spokeswoman for The Utility Reform Network, based in San Francisco. “It remains to be seen whether there is any justification, in terms of safety or reliability, for the massive increases PG&E is proposing.”

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