In what some are calling a “backroom deal” between PG&E and its regulator, the company has agreed to pay at least $3 million in fines and launch an accelerated plan to test its gas pipeline.
In exchange, PG&E would not have to defend itself against a charge of contempt by a regulator, the California Public Utilities Commission.
The deal comes just a week after CPUC leaders threatened to fine PG&E $1 million per day or more for allegedly failing to comply with the regulator’s explicit instructions to disclose information about its pipeline network.
PG&E had been ordered to comb through its records to determine whether it was safely operating some 1,800 miles of large gas pipeline in populated areas. The goal was to identify any lines that could be vulnerable in order to avoid another deadly explosion like the one that occurred Sept. 9 in San Bruno and killed eight people.
Specifically, PG&E was told to justify the pressure at which the company operates its pipeline.
The utility company met its March 15 deadline, but a day later, CPUC Executive Director Paul Clanon excoriated the company for what he described as an “inexcusable” refusal to come forward with information about the pipeline. He recommended the commission fine PG&E and force the company to defend itself against charges of contempt.
On Monday, PG&E responded by stating it had left out information about the pipeline in its initial filing because of a misunderstanding. Officials filed a second, more detailed account that day.
Then at Thursday’s CPUC meeting, Clanon announced that commission staff had come to an agreement with PG&E that would allow the company to essentially plead no contest to the charge of contempt, pay a fine of $3 million and meet an accelerated deadline schedule. Another $3 million in fines would be applied if the schedule was not met.
If the commission approves the deal, PG&E would be required to submit all drawings, alignment sheets, design construction and records for 700 miles of pipeline. The company also must submit documents determining the maximum pressure on the pipeline two weeks after each deadline.
The first set of documents is due by June 10. The final set is due by Aug. 10.
Also, the company will be required to submit monthly reports to the commission and meet with CPUC staff within the first 10 days of the month.
Not everyone was thrilled with the deal. Mindy Spatt, a spokeswoman for The Utility Reform Network, said the $3 million in fines was mere pennies for a company that often makes hundreds of millions of dollars in profit annually.
State Assemblyman Jerry Hill, who represents San Bruno, also blasted the agreement, describing it as a “backroom deal” that makes him call into question the transparency of the CPUC.
“This type of dealing erodes my faith in the public and transparent process the commission had promised,” Hill said in a statement. “The PUC’s decision looks to be premature, especially when records remain unavailable for hundreds of miles of pipeline that could ignite another explosion.”
But PG&E spokesman Terry Prosper said the goal of the proposed agreement is to get a list of very specific enforceable milestones for PG&E to achieve in its records search.
“And to move PG&E quickly back to that work,” Prosper said.
A public hearing on the compliance plan is scheduled for Monday.
Staff Writer Andrea Koskey contributed to this report.