Hearings Begin for PG&E's Pipeline Upgrade Plan

The California Public Utilities Commission began its hearings today to consider PG&E’s proposal to modernize its pipeline system—a plan that was proposed in the wake of the 2010 San Bruno pipeline explosion.

In August, PG&E announced what the company described as a comprehensive safety plan that includes enhanced electronic monitoring and expanding the use of automated valves. 

PG&E officials said the upgrades will cost about $2.2 billion, and they are proposing that ratepayers pick up 90 percent of the tab. Despite harsh criticism, the company has defended that proposal because the costs would be used toward new, industrywide standards set by the CPUC.

The San Francisco Examiner further explained why PG&E wants customers to cover those costs, as well as why there is so much opposition to the plan:

While PG&E says that it will charge shareholders for work to test pipelines placed into service after 1970, the utility argued that before that date tests were not required.

But the commission’s Division of Ratepayer Advocates and The Utility Reform Network, or TURN, an independent watchdog, argued that the were not new. Instead, pressure testing of pipelines has been an “industry standard” since 1935, and recordkeeping has been required since 1955.

“The fact that PG&E did not keep the records is not the ratepayer’s fault,” said the division’s acting director, Joe Como.

Assemblyman Jerry Hill and TURN also spoke out today against the plan, saying again that it was wrong for PG&E to try to dump much of the cost of pipeline maintenance and upgrades onto PG&E customers.

"All these years we've been paying our monthly gas bills assuming that PG&E was providing a safe, well-managed system," Hill, D-San Mateo, said at a news conference outside the California Public Utilities Commission headquarters in San Francisco, where regulators will be holding the hearings on PG&E's Pipeline Safety Enhancement Plan.

"Now PG&E wants its customers to pay higher gas bills for 50 years for service we thought we were paying for all along," Hill said.

Work has been under way since last year, but PG&E says it is only seeking to recover costs for projects carried out between 2012 and 2014.

"We're not seeking any costs from prior projects," PG&E spokeswoman Brittany Chord said. "We're taking a massive effort on taking a closer look at our system."

According to the Examiner, the hearings are expected to take place over the next two weeks and conclude on March 30.

Bay City News Service contributed to this story.