http://www.sfgate.com/cgi-bin/article.cgi?file=%2Fc%2Fa%2F2012%2F01%2F13%2FMNPA1MONMU.DTL


PG&E broke laws before San Bruno, state finds

Jaxon Van Derbeken, Chronicle Staff Writer

Friday, January 13, 2012

Pacific Gas and Electric Co. broke numerous state and federal safety
laws leading up to the San Bruno gas-pipeline disaster, including
failing to inspect the line for flaws after twice spiking the pipe's
gas level beyond the legal limit, state regulators said Thursday.

Had PG&E conducted an inspection using high-pressure water, as called
for by federal law, it would doubtless have discovered that the
pipeline running under San Bruno was substandard, the California
Public Utilities Commission said. That discovery would have averted
the 2010 explosion that killed eight people and destroyed 38 homes,
the commission said in a report on the disaster and the factors that
caused it.

The five commission members voted unanimously at their meeting in San
Francisco to adopt the findings of the 171-page staff report, the
first step in a process that could result in PG&E being fined hundreds
of millions of dollars for safety violations.

The commission issued its findings less than six months after the
National Transportation Safety Board took it to task for its lax
oversight of PG&E's gas operations before the explosion of the 30-inch
gas-transmission line Sept. 9, 2010.
No stress on safety

In finding PG&E to blame for the blast, the federal board found that
the company had a dysfunctional safety culture that had led it to
ignore problems on the San Bruno line and elsewhere in its gas system.
Its inspection program was inadequate, its record keeping was shoddy
and its emergency response the night of the explosion was sluggish and
chaotic, federal investigators said.

The PUC report echoed many of those findings in identifying a series
of laws it said PG&E had broken. At the core, it said, was a failure
by PG&E's management "to foster a culture that valued safety over
profits."

The commission found that PG&E had violated industry standards when it
installed the San Bruno pipe in short sections in 1956 - the metal was
weaker than it should have been, and the pipe was held together with
incomplete welds, the state noted. The company's pipeline integrity
management program, record keeping and emergency response all violated
the law, the utilities commission said.
Singling out spiking

State regulators went beyond the federal safety board, however, in
pointing a finger at PG&E's intentional spiking of gas levels on the
pipeline, a practice The Chronicle revealed last year.

In a series of stories, The Chronicle revealed that PG&E twice boosted
the pressure on the San Bruno line - in 2003 and in 2008 - in what the
company now acknowledges was a misguided effort to preserve gas
capacity under pipeline safety rules. It soon halted the practice and
has now abandoned it.
Engineers' conclusion

State engineers concluded that the company broke federal pipeline
safety laws when it first boosted the pressure in December 2003 to
just above the maximum allowed pressure of 400 pounds per square inch.

Regulators determined that the first spiking was essentially an effort
to get around federal rules aimed at capping pressure on an urban
pipeline at the highest point at which it had operated over a
five-year period.

At the time of the first spiking, PG&E knew the San Bruno pipe
qualified as an urban line, even though it waited until the next year
to formally recognize it as such. The state commission said PG&E
should have known better than to spike first and declare the line to
be in an urban area later.

Under federal law, the fact that PG&E spiked the line slightly above
the legal maximum should have triggered an inspection for any damage
caused by the spike itself, the state said. Such a test would have
exposed the faulty weld that ruptured in 2010, causing the explosion.

The report also said PG&E had violated a state order when it recorded
over a video taken in its Brentwood gas center control room the night
of the disaster.

"PG&E explained that the videotape was retained on a digital video
recorder that was part of the closed-circuit electronic security
system and was overwritten after approximately 60 days when it became
full," the report said. The utilities commission had ordered PG&E to
preserve all evidence related to the San Bruno explosion.

"By erasing a digital video recording made during the incident at its
Brentwood control room, PG&E destroyed potentially relevant
information," the report concluded.
PG&E pledges changes

In a statement, PG&E President Chris Johns said the utility took the
findings "very seriously, and we will cooperate fully with the
investigation."

"It is clear that PG&E's past gas operations practices were not what
they should have been," Johns said. "We have admitted these
shortcomings, and we are committed to raising the level of pipeline
safety to new, higher standards."

He outlined several "fundamental changes" the company made after the
disaster to make sure its "operations are as safe as possible,"
including pressure testing, installation of automatic shutoff valves,
pressure reductions on some pipelines and improved emergency response
plans.

"We recognize that there is much more work ahead to be the company our
customers expect us to be," Johns said.

Mike Florio, the utilities commission member who oversees gas safety
rule-making proceedings, welcomed the report as a critical step in
assuring safety.

"This is the end of the beginning," he said.

The penalties against PG&E could be enormous. They are likely to far
exceed the $38 million the company was fined for a 2008 gas explosion
in Rancho Cordova (Sacramento County), the biggest gas-related penalty
the state has levied against the company.

"When you have violations covering years and years, and the penalty is
per day ... you could name any number," Florio said. "But the idea of
all of this is to determine a just and reasonable fine.

"The most important thing of all," Florio said, "is to change the way
this company operates."

E-mail Jaxon Van Derbeken at [email protected].

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/01/13/MNPA1MONMU.DTL

This article appeared on page A - 1 of the San Francisco Chronicle
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