The new chief of PG&E acknowledges that his company’s image and business performance were severely tarnished by last year’s deadly pipeline explosion in San Bruno, but said Monday that significant changes are under way.
In a briefing with reporters, chairman, CEO and President Anthony Earley said his first three months on the job have focused on restructuring the company to increase accountability, improve service and bolster the internal standing of natural gas experts.
Because such experts fled PG&E due to the combination of its gas and electricity operations, PG&E has now separated those two businesses, Earley said.
The disaster on Sept. 9, 2010, claimed eight lives and destroyed dozens of homes in San Bruno; it also spawned investigations at the state and national level, scores of lawsuits and countless media reports.
“The confidence that our constituencies have in the company is at an unacceptably low level,” Earley said. “We understand the seriousness of the problem. We’re doing everything we can to prevent it from ever happening again.”
An internal realignment to promote “clear accountability” for important functions such as engineering and operations also was instituted.
“There was some lack of clarity about who’s responsible for what” in the past, Earley said. He also touted “significant changes” in company leadership and the hiring of about 200 engineers.
PG&E will spend an extra $200 million per year in 2012 and 2013 to accelerate work projects, increase training and improve its gas and electric business and service, Earley said. He promised a focus on business essentials; “a culture of openness”; and treating employees, customers, regulators and political leaders “with respect.”
“Given what’s happened to this company over the past few years, we can’t just be an average performer,” he said.
Earley also faced questions about PG&E’s $2.2 billion program to make safety enhancements to its pipeline system. Ratepayers are expected to absorb about $1.7 billion of that.
“That’s probably the right ballpark for what ought to go into rates,” Earley said. “The actual impact on a customer’s rate is not large.”