Final day of federal hearings for PG&E

Today was the last day of federal hearings for PG&E in Washington, D.C. The company has been under close scrutiny since its gas pipeline burst in San Bruno last September, killing 8 people and destroying dozens of homes. So far, the investigation has made some crucial revelations regarding the safety of PG&E pipelines.

We’ve been following with reporter John Upton of the Bay Citizen, who is there and is keeping a live blog of the proceeding. KALW’s Ben Trefny called him up on day one, when it was revealed that PG&E was using some questionable construction.

JOHN UPTON: There were a number of small segments of pipeline tagged onto the end of this already deficient pipeline. These little sections of pipeline which are called pups, they seem to have been basically gathered up because PG&E was running out of pipeline, and some of them were actually cut off of pipelines that had failed safety tests.

And so what workers did was they took a bunch of these little pieces of pipeline, they cobbled them together with welds, which increases vulnerability of a pipeline, welded them together and then just treated them as if they were a normal continuous stretch of pipeline. Now, that is actually kind of a very dangerous thing to do, because every time there's a weld it increases the possibility that something could go wrong.

Now that the National Transportation Safety Board has wrapped up its hearings, John Upton joins us again from Washington, D.C.

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BEN TREFNY: So you've been there for the last three days in Washington D.C. What overall is your impression of these hearings into the San Bruno Gas Pipeline Explosion and PG&E's role in it?

JOHN UPTON: Well, I think there's a much wider awareness now of the broad range of safety systems that utility companies could've been introducing over the past several decades, that they've not being doing so for complicated reasons. And I think now, what were going to see is a real push for improved safety of gas pipelines, nationally, not just in California. But that's going to come at a very severe cost and I think that once people start understanding how much this is going to impact their electricity rates, there might be some push back against these safety initiatives.

TREFNY: So it's not just PG&E who's been questioned here. For example the CPUC, the California Public Utility Commission's consumer protection director, Richard Clark was there in Washington. He said that out of 1,000 employees only about twenty are focused on pipeline safety issues. Now,many people have been saying that the CPUC itself should be investigated, including local representative, Jackie Speier. How much of that kind of discussion – making sure to keep the watchdogs accountable – has there been?

UPTON: There's been a lot of discussion about whether or not the California Public Utilities Commission and similar bodies across the nation are well enough funded to do their jobs properly in terms of keeping a close eye on these pipelines. And what we were hearing in the hearings yesterday is that no, these agencies simply are not receiving enough state funding to employ the number of inspectors that they need and to be doing the investigations that we as taxpayers and ratepayers would expect them to be doing. So, if we want to be safe from these pipelines, states and their political leaders will really have to need to start prioritizing utilities commissions when it comes to funding a little bit more than has been the case up until now.

TREFNY: That's going to be a hard sell in California where we're facing a $25 billion budget deficit.

UPTON: It's going to be a hard sell everywhere. Utility safety is not ever a thing that's on anybody's mind. Pipeline safety is something that's hardly ever considered. And as the memories of San Bruno and some of these other accidents start to fade, it's possible that a lot of the political weight that's being thrown behind utility safety/pipeline safety over the past four or five or six months it might start to dissipate and political leaders might start to think about how else they can spend this money.

TREFNY: Now, Jackie Speier came out after meeting with PG&E yesterday and her tone was positive, apparently. She was pretty confident that PG&E is the "new PG&E," and it could become the gold standard for this country that all other operators would follow. What do you make of that? Do you agree?

UPTON: Yeah, Jackie Speier certainly has taken a different turn when it comes to PG&E over the last 24 hours. The congresswoman offered some legislation that would require PG&E to install automated or remote-controlled safety valves on its pipelines and would also compel the company to send letters to all of its customers who live within 2,000 feet of a high-pressure pipeline. Towards the end of the hearings this week, PG&E actually came out and told the congresswoman that they would in fact undertake those measures. That was a lot of praise, not only from the congresswoman, but also from the chairwoman of the National Transportation Safety Board who credited the hearings with pushing PG&E in that direction.

TREFNY: Well, how about from the ratepayers though? PG&E has said that the overage price to install an automated or remote shutoff valve is about three quarters of a $1 million. So the initial twelve valves that they're committed to installing would cost about $9 million, and it seems that these might be passed onto the ratepayers because that's the people who pay PG&E's bills.

UPTON: It's actually worse than that. PG&E is expecting, according to it's latest letter to the CPUC on this issue, to replace about 300 valves throughout its network in Northern California, at an average cost of $750,000. In addition to that, they expect to spend between $200 and $300 million this year alone just trying to get paperwork together and performing inspections of potentially dangerous pipelines. So that all comes out to more than $500 million, and once PG&E divides that among it's 6.1 million customers, each customer is facing a rate hike of nearly $100. And that's only the tip of the iceberg, if some of these other safety measures that have been discussed this week are also initiated or introduced. So the cost to ratepayers will be severe, and you would probably expect to see some push back once those rate hikes start to be imposed, particularly as the memories of San Bruno fade. What the effect of this will be is pushing up the price of fossil fuels and potentially helping renewable energy compete with natural gas-derived energy.

TREFNY: So do you think a public hearing as just happened in Washington, do you think this has been a useful endeavor? It seems like there's been some concrete decisions made.

UPTON: I think this has been a very constructive week. I think we will certainly see, come out of this, some real action from government agencies in relation to pipeline safety. What that will eventually mean, I don't know. It could be a broad range of limited improvements all the way to dramatic improvements. But at least it's being discussed right now and that should've been the case over many years and even many decades.

How do you feel about the findings of the PG&E hearings? Let us know at news@kalw.org.