Carmel mayor: Break up PG&E and their ‘ticking time bombs’

As the California Public Utilities Commission began a new round of hearings in San Francisco today into PG&E’s pipeline record-keeping, Carmel Mayor Jason Burnett called for sweeping reforms and possibly a break-up of the utility.

Burnett said at a news conference in San Francisco:

“We are demanding major reforms of PG&E, including its record-keeping practices, so that no more lives are risked by the ticking time bombs beneath our communities.”

He suggested the reforms could be either:

“… breaking up PG&E or completely overhauling its corporate culture, including all of its record-keeping practices.”

Burnett spoke shortly before a CPUC administrative law judge began a four-day evidentiary hearing into a 2014 pipeline explosion in Carmel and five other episodes in which workers accidentally punctured incorrectly documented pipelines in four cities.

The purpose of the proceeding is to determine whether PG&E violated any laws or regulations on record-keeping. If the administrative judge determines PG&E broke the laws, she could impose a fine, which could then be appealed to the five-member commission.

The current proceeding, which the commission initiated in November 2014, is separate from an earlier case in which the commission last year fined PG&E a record $1.6 billion for violations related to a fatal explosion in San Bruno in 2010.

In San Bruno, a defectively welded seam in a PG&E natural gas transmission pipeline ruptured and caused an explosion and fire that killed eight people and injured 66 others on Sept. 9, 2010. The pipeline segment was incorrectly listed in PG&E records as seamless.

In Carmel three and one-half years later, a PG&E work crew tapped into a two-inch-wide metal pipeline on March 3, 2014, without realizing it contained an active internal plastic pipeline that was not shown in the company’s records.

The internal pipe was punctured and released natural gas that migrated to a five-room wooden house, where it was ignited, probably by a stove pilot light, and exploded. The house was vacant at the time and no one was injured.

“It was a miracle nobody was killed, let alone hurt, but PG&E can’t rely on miracles to protect public safety,” Burnett said at the conference today.

The other incidents being investigated in the current proceeding occurred in Castro Valley in 2010 eight days after the San Bruno explosion, in Morgan Hill in 2012, in Milpitas in 2012 and 2013 and in Mountain View in 2013.

Either construction workers or PG&E workers struck and damaged incorrectly recorded pipelines. The accidents released natural gas and caused service disruptions but no one was injured.

PG&E said in a statement that it has resurveyed its pipelines, consolidated and digitized its pipeline records, and improved its policies in the past several years.

PG&E spokesman Greg Snapper said:

“It’s important for our customers to know that we have a company-wide practice that requires any employee or contractor to stop a job if the records do not match what is found in the ground or if the employee believes the situation is not safe.”

The utility provides natural gas and electricity to approximately 16 million people in Northern and Central California.

PG&E is also facing a federal criminal trial related to record-keeping in U.S. District Court in San Francisco in March.

It faces 12 counts of violating record-keeping and pipeline integrity management requirements of the U.S. Natural Gas Pipeline Safety Act and one count of obstructing justice in a National Transportation Safety Board probe of the San Bruno explosion.

U.S. District Judge Thelton Henderson today moved the start of the trial from March 8 to March 22 to allow more time for prosecutors and defense lawyers to respond to the numerous pretrial motions filed by their counterparts.

At today’s news conference, Burnett and Carmel Police Chief Mike Calhoun said they were disturbed to learn in a recent prosecution filing in the federal case about allegations by a former PG&E employee concerning record-keeping problems.

In the Jan. 11 filing, the federal prosecutors said they plan to call as a witness Leslie McNiece, who according to the document was hired by PG&E in 2012 to build a department to address record-keeping deficiencies and was laid off in 2014.

The prosecutors from the U.S. Attorney’s Office said McNiece will testify that she experienced “financially motivated pushback” from management when she tried to solve problems and on some occasions allegedly “received specific instructions to destroy documents.”

McNiece will also testify that she found original pipeline survey sheets for Line 132, the transmission pipeline that exploded in San Bruno, in a dumpster outside PG&E’s Gas Operations facility in Walnut Creek in September 2013, the prosecutors said.

The discarded survey sheets had a handwritten notation dated Dec. 8, 2003, saying “leak info not in GIS,” according to the filing. GIS is PG&E’s Gas Distribution Geographical Information System. Prosecutors allege in the document that the notation refers to a 1988 seam leak in the pipe and would show that some PG&E staff members were aware that the GIS had incomplete information.

Burnett called the allegations a potential “cover-up scandal.” Calhoun said he participated together with Carmel’s lawyer in a private interview of McNiece in October.

Burnett said he was not at liberty to reveal any details beyond what was given in the federal court filing, but said:

“However, the information provided by Ms. McNiece to the city of Carmel was deeply concerning to us and should be to the CPUC, public safety officials and the public at large.”