More emails released, show CPUC and PG&E cozy relationship

In 2013, a worrying set of PG&E emails surfaced about a section of pipeline, Line 147, in the city of San Carlos, California.[i]

Included was this information from PG&E engineers,  most of whose names are redacted (my emphasis) –

After thinking about this some more, I have concerns about this pipe. My thought pattern is like this: We are still searching records, but we now believe this is 1929 pipe that was recently testing to just 1.5 the MAOP in 2011. It is thin wall pipe and now we have found external corrosion on it. Could the recent hydro test contributed [sic] to additional cracking in this pipe and essentially activated a threat? Are we sitting on a San Bruno situation? With fatigue crack growth over many years? Is the pipe cracked and near failure? I don’t want to panic people but seems like we should consider this and probably move this pipe up the PSEP [Pipeline Safety Enhancement Plan] priority for replacement.

The email also provided this startling information on water pressure testing of gas pipelines, currently going on in many places in California.

I know there is industry evidence and discussion of how the hydro testing can activate the cracks and cause failures soon after the hydro testing. I know in theory the 1.5 times the MAOP test pressure should be sufficient, but I believe there is industry evidence that this is not always true.

What does this last statement mean? Does it mean that 1.5 times is safe? Or is the redacted emailer saying that cracking and failure can result from much lower pressures? At least one gas pipeline ruptured in the San Francisco Bay area that had been “surveyed” the previous year.[ii]

As long as PG&E employees can hide behind redactions, the public has no way of getting the information they need.

When the emails surfaced, the city of San Carlos declared a state of emergency, and asked PG&E to shut down the pipeline. PG&E refused. So San Carlos took PG&E to court and was granted an injunction to shut down the pipeline.[iii]

PG&E ignored the injunction and kept the pipeline operational. Here’s the city’s press release. [iv]

Finally, PG&E reduced pressure in the gas line.[v] The CPUC ruled that the pressure had to be kept low, and PG&E went to court to overturn the injunction and raise the gas pressure, also arguing that the PUC has sole jurisdiction over PG&E.[vi]

Then, at a December hearing, the CPUC allowed Line 147 to be fully pressurized to 330 psig.

A timeline of events is on the City of San Carlos website — http://www.cityofsancarlos.org/depts/cm/pgne_pipeline_147.asp .

This week, PG&E released more emails showing the cozy advocacy relationship between PG&E and CPUC commissioners. Most of the emails concern PG&E’s fight to raise the pressure in Line 147 just prior to that December hearing.

Former PG&E exec Brian Cherry asks in these emails

Is it good public policy to have one City disadvantage everyone else with no concern for the greater public good ? More importantly, who are the experts that we are to rely on for good public policy decisions ? SED is the expert on safety and believes 330 psi is appropriate. PG&E’s nationally renowned expert Kiefner and Associates found 330 psi to be prudent and acceptable. Should a City that hires it’s own third party expert who says something significantly different trump these experts because they simply don’t like the result ?

If so, it is setting a dangerous precedent for every City that doesn’t like something in their neighborhood to jeopardize the safety and well being of others elsewhere on the system.

The only dangerous precedent is when PG&E or any member of the industry is the sole arbiter of safety. PG&E hired well-known industry defense firm Exponent to “investigate” the gas explosion in Carmel, California. That’s not independent analysis. And PG&E’s safety violations are well known. San Carlos did the appropriate thing in hiring its own expert to represent residents.

San Carlos issued a press release yesterday, following the release of these new emails, calling on Gov. Jerry Brown to clean house at the CPUC.  http://www.cityofsancarlos.org/civica/press/display.asp?layout=1&Entry=712

Clearly, Brian Cherry and the management of PG&E just don’t understand public safety. Cherry is no longer at PG&E, but how many others of similar philosophy are still there? And will Brian Cherry resurface in some other branch of the industry?

Will PG&E management and staff ever be held accountable? With PG&E’s enormous political power, some say this company is immune from responsibility and liability along with the officials who are its partners and allies.

From the San Francisco Chronicle, October 7. 2014:

Federal prosecutors probing PG&E-CPUC e-mails

Federal prosecutors have told Pacific Gas and Electric Co. that they are investigating five years’ worth of back-channel communications between company employees and the California Public Utilities Commission, including several that enmeshed utility executives in a judge-shopping scandal, PG&E said Monday.

The company revealed the investigation by the U.S. attorney’s office as it released additional e-mails that it said violated rules against off-the-record communications between PG&E and state regulators, including one in which a utility vice president said the head of the commission was pressuring PG&E to fund the campaign against a state ballot measure.

PG&E said it had found the the e-mails among 65,000 exchanged between state officials and utility employees over five years.

The company said it would cooperate in the federal investigation. It did not say what laws may have been violated.

A representatives of the U.S. attorney’s office in San Francisco had no comment. The state utilities commission said it has hired an independent expert to try to ensure against future back-channel exchanges.

PG&E told to ‘step up big’

Among the documents PG&E released Monday was a 2010 e-mail in which one utility executive told his boss that Michael Peevey, president of the state commission, expected PG&E to spend “a lot more” than $1 million opposing a ballot measure that would have put on hold California’s law capping greenhouse gas emissions.

“Mike stated very clearly that he expects PG&E to step up big and early in opposition” to the ballot measure, PG&E Vice President Brian Cherry wrote to his boss, Tom Bottorff, in May 2010. “He said it would undermine our reputation if we didn’t fund it.”

Cherry wrote that Peevey said he had approached two other utilities, Sempra and Southern California Edison, with the same request, “and said we would have egg on our face if they came out in opposition to the initiative before we did.”

PG&E announced its opposition to the measure, Proposition 23, less than two months later. It contributed at least $500,000 to the campaign against the initiative, according to the nonprofit campaign-money watchdog Maplight.

Voters overwhelmingly defeated the measure in November 2010.

“We’ve made it clear that we are committed to complying with both the letter and the spirit of the law and PG&E’s own code of conduct at all times. No excuses,” Tony Earley, PG&E chairman and CEO, said in a statement. “Our customers and the communities we serve expect no less. We took immediate and definitive action, self-reported these violations, held individuals accountable and are making significant changes designed to prevent this from happening again.”

Last month, PG&E fired Bottorff, Cherry and another vice president as it released e-mails in which one of the executives lobbied for a preferred administrative law judge to be assigned to a $1.3 billion rate-setting case stemming from the deadly San Bruno explosion in September 2010.

‘Inappropriate’ exchange

The utilities commission labeled the e-mail exchange “inappropriate” and said the chief of staff to Peevey had resigned, though she remains with the agency as an administrative law judge. Peevey recused himself from a separate case in which PG&E faces $1.4 billion in penalties for violations related to the San Bruno case.

Among the additional e-mails that PG&E released Monday were several showing communications between its executives and utilities commission member Mike Florio, who has already apologized for having told Cherry in January that “I’ll do what I can” to appoint the executive’s preferred judge to the rate-setting case.

In December, Cherry e-mailed Florio about a dispute involving a gas pipeline in San Carlos for which the city had obtained a court order cutting pressure. The city got the order after PG&E revealed that its records inaccurately described the pipe, a problem similar to the one that led to the San Bruno explosion.

PG&E was lobbying the commission to restore full pressure, arguing that it was necessary to maintain full gas service on the Peninsula. “Is it good public policy to have one city disadvantage everyone else with no concern for the greater public good?” Cherry asked Florio in an e-mail.

Florio replied that “this situation is still touch and go given the full court press by San Carlos.” He wrote that he was about to add an item about the pipeline pressure to the commission agenda and “it would really help if I had a bit more technically sophisticated explanation” for why San Carlos’ proposed pressure was inadequate.

Florio warned Cherry that Gov. Jerry Brown’s office was trying to broker a compromise and might be contacting Earley with questions, “so you should probably warn him.”

“Mike and I are very leery (about San Carlos’ proposed pressure), since we have no basis for that number and don’t know the impacts,” Florio wrote.

Becoming ‘an apologist’

Florio, a longtime attorney with the consumer watchdog group The Utility Reform Network before Brown named him to the commission in 2010, added, “Amazing how I’ve become ‘an apologist for PG&E’ in just three short years, isn’t it?”

The day of the commission’s vote, Cherry e-mailed Florio, saying, “Good luck today. This is why they pay you the big bucks!”

In the end, the commission voted to restore full pressure on the line.

Florio said Monday that he had done nothing improper in responding to PG&E’s concerns. He said San Carlos officials had met with him and that he was just trying to get the facts.

“I felt like I went above and beyond the call of duty to investigate everything that they (San Carlos officials) brought up,” Florio said.

He said it had been PG&E’s responsibility to report the e-mail exchange to the utilities commission within three days, to avoid violating rules against secret communications. “I have plenty of things to do besides police all these people,” he said.

Jaxon Van Derbeken is a San Francisco Chronicle staff writer. E-mail jvanderbeken@sfchronicle.com

Source:

http://www.sfgate.com/bayarea/article/Federal-prosecutors-probing-PG-E-CPUC-e-mails-580475 7.php

[i] http://media.nbcbayarea.com/documents/PGE+Emails.pdf

[ii] http://www.contracostatimes.com/news/ci_24693979/crews-respond-natural-gas-leak-fire-east-Oakland

[iii] http://www.nbcbayarea.com/news/local/San-Carlos-Declares-State-of-Emergency-Over-PGE-Pipeline-226550481.html

[iv] http://www.cityofsancarlos.org/civica/press/display.asp?layout=1&Entry=685

[v] http://www.ktvu.com/news/news/local-govt-politics/pge-shuts-down-questionable-pipeline-san-carlos/nbH4R/

[vi] http://www.mercurynews.com/pge/ci_24267006/pg-e-goes-court-injunction-san-carlos-pipeline

That belief, which PG&E and the CPUC continually promote, is in contradiction with the California Public Utilities Code and the California Constitution, which states that municipal corporations – cities and counties – and agencies also have jurisdiction over the public utilities.

Posted under Fair Use Rules.

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