SACRAMENTO (CN) – The California Public Utilities Commission voted unanimously Thursday to investigate the safety and corporate culture of Pacific Gas & Electric, after a 5-year string of safety problems, including two explosions.
“We need to get at the root of the problem and determine why PG&E keeps having safety-related issues,” CPUC President Michael Picker said. “Performance is still uneven. The safety and well-being of the public, ratepayers, its employees and contractors, the utility assets, and the environment should be every utility’s paramount priority.”
PG&E was fined $1.6 billion this year for the 2010 natural gas pipeline explosion that killed eight people in the Bay Area city of San Bruno. It was the largest fine the Public Utilities Commission ever handed out.
After that explosion, PG&E promised it would improve the safety of its operations, invest in safety improvements and reorganize to prioritize safety. But accidents and incidents continued to affect PG&E customers, its workers, the environment and the general public, the PUC said.
In November 2014 PG&E was fined $10.85 million for a natural gas explosion that destroyed a cottage and damaged three homes in Carmel in March that year.
The PUC found the utility had violated safety rules and failed to properly equip a crew trying to replace a gas-distribution line.
Other problems include a death at a Kern County power plant and two security breaches at the Metcalf Transmission substation near San Jose, in 2013 and 2014.
More recently, a PG&E pipeline exploded at the Fresno County Sheriff’s Foundation gun range, killing one man and injuring many others. The PUC is still investigating to determine if PG&E violated any laws.
“The persistence of safety incidents motivates us to undertake this investigation to determine whether this persistence is rooted in PG&E’s organizational culture and governance and PG&E Corp.’s role in PG&E’s safety culture,” the PUC said.
The $2 million PG&E-financed investigation is not intended to duplicate investigations of specific incidents, but should concentrate on whether its governing board is holding the company accountable for safety lapses, Picker said.
“A public utility’s track record of safely operating its system is dependent on more than messages and slogans,” he said. “An effective safety culture is shaped by the governance, policies, budget, practices, and most of all, the accountability set by the top leadership.”
Picker said that targeting corporate governance is a new approach for his group, though New York state conducts regular audits of corporate governance.
The PUC’s Safety and Enforcement Division will hire an independent consultant with experience to assist in the investigation.
PG&E responded to the announcement of the investigation by saying that it already is addressing problems revealed by the San Bruno explosion, including hiring Tony Earley as chief executive in 2011 and providing safety training for 3,500 employees.
“We look forward to constructive dialogue with the commission and staff and to sharing our commitment to safety and the concrete actions we have taken over the last several years to back it up,” PG&E spokesman Keith Stephens said.
“We’ve made incredible progress toward our goal of becoming the safest and most reliable energy provider in America, but we have more to do and we won’t rest until it’s done and done right,” he said.
Pacific Gas & Electric is one of the two biggest utilities in Southern California, along with Southern California Edison, which dominates the south, while PG&E dominates in the north. PG&E is a publicly owned company with roughly $50 billion in assets. It reported $15 billion in revenue in 2011.
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