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San Carlos Mayor May Consider Lawsuit Over Pipeline Pressure

The CPUC is allowing PG&E to raise San Carlos pipeline pressure, but sets $14.35 million fine for misleading filing by the gas and electric utility. The pipeline runs beneath Brittan Avenue.

San Carlos Mayor Mark Olbert   Patch file photo
San Carlos Mayor Mark Olbert Patch file photo
By Bay City News

The California Public Utilities Commission at a meeting in San Francisco Thursday allowed PG&E to raise the pressure in a controversial natural gas pipeline in San Carlos to a normal operating level.
           
At the same time, the commission fined the utility $14.35 million for submitting a misleading and seven-months-late correction of information about seams in the pipeline.
           
"The CPUC expects nothing less than forthright and timely disclosure in all matters of public safety," said Commissioner Mark Ferron, who proposed the fine.
           
"This fine sends a strong signal to PG&E, and to all of the utilities that we regulate, that delay and obfuscation will not be tolerated," Ferron said.
           
"PG&E needs to rebuild the public's trust," said Commissioner Michel Florio.
           
The five commissioners voted unanimously to approve both decisions concerning Line 147, which runs on an east-west axis for 3.8 miles underneath Brittan Avenue in San Carlos.
           
The ruling on the pressure allows PG&E to raise the amount to 330 pounds per square inch, up from the reduced 125 pounds per square inch ordered by the commission in October while it conducted a safety probe.
           
San Carlos leaders have questioned the line's safety since early October, when they learned of internal PG&E emails, written 11 months earlier, that raised worries about inaccurate records on the pipe.
           
In one email, a consulting engineer expressed concerns about thin walls and corrosion in the pipe and asked, "Are we sitting on another San Bruno situation?"
           
A rupture, explosion and fire at another pipeline in San Bruno killed eight people in that city in 2010.
           
Although the commission's staff, an outside expert and PG&E have said raising the pressure in Line 147 would be safe, San Carlos asked for more time to have its own expert investigate it.
           
San Carlos Mayor Mark Olbert said after the meeting, "Today we are disappointed to see PG&E and the CPUC continue their sad tradition of placing service above safety."
           
Olbert said the city is considering various options including a possible lawsuit challenging the CPUC decision.
           
The city had unsuccessfully proposed allowing PG&E to raise the pressure to 240 psi and to allow 330 psi in an emergency.
           
But Florio said during the meeting, "unfortunately, that is not a feasible option." He said that in order to perform its function as a cross tie, the line had to operate at the same pressure as north-south lines running up either side of the Peninsula.
           
"Without the pressure at 330, there simply won't be enough gas to serve Northern California" during cold winter weather, Florio said.
           
PG&E said in a statement that it welcomed the pressure decision and said, "This line plays a critical role in delivering natural gas safely and reliably to PG&E customers in the Peninsula."
           
The company said of the commission's second decision, "We believe the fine associated with this ruling is excessive."
           
But it said, "We acknowledge our communication efforts fell short of expectations in this instance."
           
The fine was levied in a separate proceeding in which the commission found that PG&E violated a rule that anyone who does business with the PUC must "never mislead the commission or its staff by an artifice or false statement of fact or law."
           
Pressure in Line 147 and other lines was reduced after the San Bruno explosion, but in 2011, the commission allowed PG&E to restore pressure in the San Carlos line to 365 psi on the basis of pipeline information the utility had submitted.
           
Beginning in October 2012, PG&E discovered that three segments of the line were not seamless as had been reported and that a fourth did not have a double weld. Instead, all four segments had a weaker type of single weld, which required a pressure limit of no more than 330 psi.
           
The ruptured pipeline segment in San Bruno was also incorrectly recorded as seamless, the commission noted in its decision.
           
The PUC found PG&E senior management was aware of the errors by
November 2012. But the company did not formally report the information to the
commission until July 3, 2013, and when it did so, it used an incorrect and
misleading procedure, according to the commission.
           
PG&E labeled the records correction "errata," a term usually used for rectifying typographical errors. Such filings are not allowed after the record in a proceeding has been closed and PG&E should have petitioned to reopen the record instead, the commission said.
           
Ferron wrote in the decision adopted by the commission that the filing misled the panel in two ways.
           
First, he said, PG&E allowed "key safety information" on which commission had based its 2011 maximum-pressure decision to remain uncorrected
for seven months.
           
Secondly, the "errata" filing's title and content did not convey the nature or significance of the correction and did not explain when and how PG&E discovered the errors, the PUC said.
           
In addition, the decision said, "The misleading nature of the document was exacerbated by its submission date of July 3, 2013, before a holiday weekend."
           
Several commissioners said they were disappointed that PG&E Corp. Chief Executive Officer Tony Earley had testified at a Dec. 2 hearing that
"from a safety standpoint, there was not an issue." PG&E said it reduced the
pressure to below 330 psi after discovering the errors.
           
Commissioner Catherine Sandoval said it is up to the commission to determine how safety is affected.
           
"The discovery of information related to the maximum allowable operating pressure is a safety event, not merely a compliance error," Ferron said.
           
Ferron had originally proposed a fine of $17.25 million, but reduced the amount in a revised proposal Wednesday after recalculating the number of days. The commission did not consider an administrative law judge's proposal for a $6.75 million fine and instead voted only on Ferron's proposed decision.
           
The fine of $50,000 per day includes $11.45 million for allowing the information to stand uncorrected between Nov. 16, 2012, and July 3, plus $2.9 million for submitting a misleading and incomplete correction on July 3 that was not fully explained by PG&E until Aug. 30.

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