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PG&E says it made leadership changes over records problems before Calif. probe

Pacific Gas and Electric Co. said it changed corporate leadership in response to internal concerns about complying with key gas safety rules and keeping accurate related records, although the utility has not elaborated on the nature of those personnel changes.

Now under investigation at the California Public Utilities Commission for allegedly failing to keep up with critical infrastructure location requests and falsifying records to cover up its shortcomings, the utility said it "took and continues to take" corrective actions to meet regulatory requirements.

Included among those changes, Pacific Gas and Electric, or PG&E, said it made "a number of personnel and organizational changes, including some leaders no longer being with the company." The company did not specify which leaders it was referring to, nor did it immediately respond to a request for more information. The company did say that it acknowledged and recognized "the serious concerns" the CPUC has raised about the company's infrastructure and marking program and noted that the utility had not live up to its "commitment to accurate reporting and record-keeping."

A CPUC staff inquiry into PG&E's alleged infrastructure location and record-keeping failures included interviews under oath with multiple upper-level staff members, including Jesus Soto, the utility's senior vice president of gas operations, and Nick Stavropoulos, who at the time was the company's president and COO. Soto and Stavropoulos were the only executives the CPUC's order opening the investigation mentioned by name.

In July, PG&E announced Stavropoulos' plans to leave his job with the company and his board of directors position at the end of September. The company did not give a reason for Stavropoulos' retirement and did not announce a management succession plan at the time.

In August, utility parent PG&E Corp. announced an interim organizational structure while it continued its search for a new president and COO at the utility. The company at that time gave Soto additional cybersecurity, physical security and supply chain responsibilities, among other changes to executive roles within the company. That same month, the utility also moved its vice president of power generation to vice president of safety and health.

In addition to the staffing and leadership changes, PG&E said it has upgraded its gas pipeline tracking system, reviewed its audit protocols, added personnel to do infrastructure location and marking work, and provided more training. PG&E also said it has engaged independent third-party consultants to audit and review the utility's locate and mark processes and is voluntarily providing the results of those reviews to the CPUC.

The commission's order opening an investigation into the allegations noted that even though a third-party consultant pointed out to PG&E that the utility was undercounting how many tickets the company's locators actually responded to late, PG&E did not address the record-falsification issue.

Because that issue went unaddressed, PG&E undercounted its late tickets each year between 2012 and 2016 "on the order of tens of thousands," the CPUC said. Commission staff also said PG&E undercounted an additional 5,000 or more late tickets in the first two months of 2017.

To avoid damage to underground infrastructure such as pipelines, utilities have to timely respond to excavator requests to locate and mark where underground systems are. The CPUC order also highlighted another report from a consultant PG&E hired, which found that the utility and its management placed "inherent pressure" on locators to complete the work and it was "common knowledge" among supervisors that locators put in false notes to prevent locate tickets from appearing late.