Sept. 9, 2010: A 30-inch PG&E gas pipeline burst in San Bruno, killing eight people, injuring dozens more and destroying 38 homes. In court documents, PG&E first tried to blame the rupture on a city sewer project that allegedly damaged a "state of the art" pipeline. Residents themselves were accused of somehow being negligent.
A year later, the National Transportation Safety Board pinned the blame squarely on PG&E, reporting that the pipeline that burst was substandard when it was installed in 1956. In an advertising campaign that followed, PG&E's new chief executive officer and chairman, Tony Earley, acknowledged the utility company had "lost its way" and vowed to regain the trust of its customers.
With a decision expected later this year, the California Public Utilities Commission staff is proposing PG&E pay a $2.25 billion penalty, which would fund ongoing safety improvements. Included is a $300 million fine to PG&E shareholders that would be paid directly to the state's general fund. The proposal also would limit PG&E's ability to deduct "credits" for safety repairs made since the 2010 explosion and fire.
San Bruno Mayor Jim Ruane, who is pushing for a $3.8 million penalty, told reporters, "As we approach the three-year anniversary of this devastating tragedy, we remain firm in our belief that the only way to prevent future accidents is by penalizing PG&E to the maximum."
Earley told Bloomberg News last week that the CPUC's proposed penalty could force the utility company into bankruptcy. His warning seemed to contradict the findings of PG&E's own paid expert and a CPUC consultant that the company could afford to pay a $2.25 billion penalty without hurting its creditworthiness. But it's this declaration by Earley that has us scratching our heads: "If the purpose was to get the company's attention, you have the company's attention."
Common sense might support Earley's contention that the billions of dollars PG&E already has spent to repair and upgrade its system, as well as the avalanche of lawsuits the company faces, would be sufficient incentives for PG&E to "find its way" and pay more attention to safety. But then earlier this month, the utility company demonstrated it still is not paying attention.
Despite the CPUC instructing the company to tighten its oversight of its old power plant demolitions, PG&E did not hire an independent expert to review its plans to implode (or, more accurately, explode) its old power plant at Coffee Road and Rosedale Highway in Bakersfield.
On an early Saturday morning, the blast set off by PG&E's contractor sent shrapnel flying more than 1,000 feet into a crowd of spectators, severely injuring one man, inflicting other damage, and leaving us to wonder: Just what will it take to really catch PG&E's "attention" to safety?