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CPUC acts more like lapdog than watchdog of PG&E
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Editor’s note: Dennis Wyatt is on vacation. This column first appeared on July 26, 2011


Want some reading that will curl your hair?

Just pick up a copy of the 194-page June 24, 2011 report of the independent review panel’s examination of the San Bruno explosion where a PG&E natural gas pipeline killed eight people and leveled a neighborhood. The report was prepared at the request of the California Public Utilities Commission that comes off more of a PG&E lapdog than a PG&E watchdog.

It is stuff that PG&E and the CPUC is hoping never gets wide distribution. They may get their wish given television’s inability to get beyond sound bites and needing visuals and the short attention span of many in the printed media.

The following bulletin points are taken verbatim from the report:

• 1 “The NTSB’s findings to date indentified both the material and the fabrication welds of the section of pipeline that failed did not meet either 1) the engineering consensus standards applicable to natural gas pipelines at the time or 2) the PG&E specifications in effect at the time of construction.”

• 2 “The panel was mindful of the external criticism that has been leveled at PG&E. While it was acknowledged the company has many talented professionals, the CPUC admitted it was less effective in dealing with PG&E than any other utilities because of the “culture” of PG&E.”

• 3 “Management’s focus in recent times appears to have been focused on the occupational safety of its employees and lacking an equivalent focus on the public safety aspects of its system.”

• 4 “PG&E provided erroneous data because of a lack of 1) robust data and document information management systems to archive historical data and 2) processes to capture emerging information about the underground gas transmission line.”

• 5 “But the goals (PG&E) sets for management compensation purposes, its investments, and its practices do not suggest its focus is on achieving and industry leading pipeline safety and integrity program.”

• 6. “PG&E’s internal audit of its processes in 2010 identified in the field personnel were not adhering to the inspection policy during third-party construction, but no training was undertaken to remediate the nonconformance. Further, the company lacks a clear, disciplined communication process between field and general office engineering and between gas transmission engineers and integrity management personnel.

• 7 “To fail to inspect during major adjacent earth disturbance and then to analyze the effect of that earth disturbance after-the-fact are examples of the operator pushing its luck.”

• 8 “PG&E has no overall strategy to improve how it assesses the integrity of its system.”

• 9  “In reviewing the pipeline 2020 program, we did not find it to be well-reasoned or based on a thoughtful examination of alternative. The plan appears to be reactive.”

• 10 “PG&E’s management acknowledged to the panel that the implementation of field force automation is not as advanced as what other companies in the industry have available.”

• 11 “In early 2007, (PG&E’s) Enterprise Risk Management program identified gas and electric system safety as one of the top 10 catastrophic risks facing PG&E. … PG&E defined a major natural gas transmission accident as one that had any of the following consequences: financial exposure from $100 million to $500 million; significant injury, illness or environmental impact; and/or national or international attention resulting in a severe negative consequence to the company’s image or reputation with regulators, consumers, or the general public.”

• 12 “We would cite the following five factors as contributing to a dysfunctional culture…. excessive levels of management… inconsistent presence of subject matter expertise in management ranks… appearance-led strategy setting…. insularity … (and) overemphasis on financial performance.”

In a nutshell the CPUC essentially lets PG&E do as it pleases because to the for-profit’s “culture” apparently holding San Francsico-basd utility to lower standard than anyone else.

As for PG&E image seems more important than safety. They also cry poor when it comes to spending money on pipeline safety yet they dumped 

• $46 million into the Proposition 16 campaign in a failed attempt to get voters to amend the California constitution to provide PG&E with a guaranteed monopoly.

• $35 million to sweeten departed chief executive officer Peter Darbee’s severance package.

• $12 million to buy a new corporate jet.

• more than $10 million into bonuses paid to top executive as a reward for steering them to the edge of bankruptcy.

That’s $103 million in just four instances that could have gone into improving pipeline safety.

And that is on top of a $35 million fine for state imposed building and collection violations, $26 million in fines for a 2009 Christmas Eve natural gas pipeline explosion that killed a customer in Rancho Cordova and millions more in fines for wild land fires started due to failing to maintain power line right-of-ways.

It is clear PG&E refuses to put the public’s interest first and that the CPUC is inept at making sure PG&E doesn’t get reckless with its drive to put profit above public safety.

The time has come to pull the plug on the CPUC and/or PG&E and start all over.


This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at or 209.249.3519.