No San Bruno rate hike for PG&E

Pub date February 22, 2011

EDITORIAL In a Feb. 18 message to shareholders, Pacific Gas and Electric Co. announced that the projected costs of the San Bruno pipeline explosion could exceed $700 million. Now the company wants to get some of that back from ratepayers. That will be a huge test for Gov. Jerry Brown and the California Public Utilities Commission, and send a signal about how the new governor will deal with the rogue utility. The outcome should be simple: every penny of the costs of cleaning up the mess, repairing and upgrading the pipelines, and setting damage claims and lawsuits should be paid out of PG&E profits.

Let’s review the facts.

The CPUC gave PG&E $5 million to upgrade the pipeline under San Bruno in 2009, but the company decided to spend the money instead on executive bonuses.

PG&E officials fought bitterly to prevent the federal government from cracking down on natural gas pipeline inspections.

PG&E never conducted serious inspections of a line that was past its rated use and had been poorly constructed in the first place.

PG&E intentionally inflated gas pressure in that line beyond what regulators say was safe.

It took PG&E more than an hour to shut off the gas after the explosion, making the resulting fire much harder to contain and quite possibly contributing to some of the eight deaths and destruction of more than 30 houses.

That’s not the sort of record that suggests that the pipeline disaster was an unavoidable accident. It certainly wasn’t caused by a natural disaster. It was corporate error — misuse of money, irresponsible monitoring of a dangerous piece of equipment, intentional efforts to blunt public oversight. The damage was PG&E’s fault.

The problem is that so far, the company hasn’t been held accountable. As John Weber, editor of The Bay Citizen, pointed out in a Feb. 5 column: “What consequences have PG&E and its executives faced for these blunders? None. The stock is doing just fine. The California Public Utilities Commission has awarded the company almost $30 million in bonuses for energy-saving targets that weren’t achieved. The company plans to hire a new gas operations executive, but no one has lost his job — except a hapless manager who thought it would be smart to spy on the online discussions of smart-meter opponents.”

Ideally, the CPUC and the federal regulators ought to levy the heaviest possible fines on the company and mandate far stricter maintenance oversight. At the very least, the commission needs to make it clear that no ratepayer money will go for San Bruno-related expenses.

The pressure should be on at every level of government. The San Francisco supervisors should pass a resolution calling on the CPUC to reject any rate hike that would force PG&E customers to pay for the accident. State Sen. Leland Yee (D-SF) has already issued a statement denouncing any rate hike. But the Legislature ought to go further and pass a bill that would state that no utility can charge its ratepayers for costs related to an accident that was clearly the utility’s fault.

Otherwise, the utility that killed eight people and destroyed an entire neighborhood will emerge unaccountable and unscathed. P.S. Go to to sign the Utility Reform Network’s anti rate hike petition.