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PG&E utility systematically falsified gas safety records, regulator says

Pacific Gas and Electric Co. falsified tens of thousands of gas safety records in a five-year period shortly after the deadly San Bruno explosion, according to a California regulator that has opened an investigation and penalty case against the utility company.

"Utility falsification of safety related records is a serious violation of law and diminishes our trust in the utility's reports on their progress," Michael Picker, the California Public Utilities Commission's president, said in a statement.

To avoid damage to underground infrastructure such as pipelines, utilities — including Pacific Gas and Electric, or PG&E — have to timely respond to excavator requests to locate and mark where underground systems are.

Over 2012-2017, the utility did not have enough staff to keep up with these requests, and to avoid the appearance of being late in complying with locate rules, PG&E falsified records to make it seem that the company was meeting its requirements, CPUC staff alleged. Failing to locate its infrastructure on time and falsifying records are "serious" violations of the law, the CPUC said in an order opening an investigation into the issue.

"We're committed to accurate and thorough reporting and record-keeping, and we didn't live up to that commitment in this case," PG&E said in an emailed statement. "Once that became apparent, we took and continue to take additional actions to meet the regulatory standards related to our locate and mark record-keeping."

The CPUC announced Dec. 14 that it had opened an investigation into PG&E's alleged violations, noting that the 2012-2017 block under scrutiny "is the period immediately following the 2010 San Bruno gas explosion and fire that resulted in eight fatalities, numerous injuries and damage to property."

"This commission would expect that after such a tragedy, caused by multiple proven violations of law, PG&E would have sought to vigorously enhance and increase its effectiveness in all aspects of its gas safety," the CPUC said in its Dec. 14 order.

According to a report from a consultant PG&E hired, 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. A CPUC staff inquiry had similar findings.

SNL Image

A gas pipeline explosion in San Bruno, Calif., in 2010 killed eight people. California Public Utilities Commission President Michael Picker has expressed concerns about the safety culture at Pacific Gas & Electric for years.

Source: National Transportation Safety Board

Even though a separate 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, the CPUC staff said. 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 for the first two months of 2017.

The commission's investigation will consider the extent to which any PG&E failure to locate and mark may have exposed underground infrastructure to damage, what penalties could prevent PG&E's locating and marking practices from endangering the public, and whether the company violated relevant rules. The CPUC said it would consider imposing daily penalties.

The PG&E Corp. subsidiary has 90 days to file a report responding to an array of the allegations and concerns from the regulator.

The CPUC in 2015 penalized PG&E $1.6 billion for violations in connection with the deadly San Bruno disaster, but Picker at the time questioned whether the company could truly reform. He expressed concerns about accidents at PG&E after the San Bruno explosion, such as a house explosion in Carmel, Calif., in March 2014 in which issues with the utility's pipe records and procedures played a role.

The commission also penalized the company $25.6 million in 2016 for gas system record-keeping failures, on top of a $10.8 million fine related the Carmel house explosion.

Picker on Dec. 14 said the CPUC would be considering the "systemic safety issues at PG&E."