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Hill/TURN: Stop PG&E from Gouging Consumers


PG&E’s proposal saddles ratepayers with almost all of the $5 billion price tag spread out over a fifty-year period. If the Commission lets PG&E have its way, the utility stands to make a $1.5 billion profit thanks to a Commission policy, formulated after the utility emerged from bankruptcy a decade ago, that granted it a generous return on its capital investments.

For each $1 in pipe the company places in the ground, ratepayers would pay more than $3.50.  Not only would customers pay back the investment principal and the debt service, but they’d also pay the 11.35 percent annual shareholder profit, and the taxes on that profit.

“PG&E customers pay their gas utility bill each month assuming they’re getting a safe, well-managed service.  They shouldn’t have to pay PG&E fifty years of higher utility bills for service they should have been receiving all along,” Hill said.

Mark Toney, executive director of TURN, said PG&E wants the CPUC to ignore the San Bruno explosion and approve massive rate hikes without holding PG&E accountable for its past failures.  “San Bruno was a result of years of pipeline neglect by PG&E, neglect that is the major driver of the expenditures PG&E now says it needs.  The CPUC must disallow rate hikes to cover PG&E’s previous mistakes,“ Toney said.
Contact: (Hill) Aurelio Rojas 916-319-2019/916-747-3199 cell; Nate Solov 916-768-1378 cell; (TURN) Mindy Spatt, 415-929-8876, ext. 306/415-359-3856 cell

Background: Even though the amount customers pay PG&E to maintain its gas lines has increased 50% since 2005, the San Bruno disaster uncovered a host of costly problems in PG&E’s system, including hundreds of miles of pipelines that had not been adequately tested, pipelines that need to be replaced, missing and inaccurate pipeline records, bad welds on pipe installation, and use of junk pipe.

The Commission will act as the judge in this case between ratepayers and PG&E to answer the question: should ratepayers now have to pay more money to fix a system they thought they’d been paying for all along?

The National Transportation Safety Board accused PG&E of having “exploited weaknesses” in government pipeline regulations “to the detriment of public safety.”  A Commission investigation, released last week, found that “PG&E’s recordkeeping was in a mess and had been for years.”

The Commission’s Independent Review Panel found that “while the company (PG&E) has multiple stated goals, top management appears to be focused on financial performance.”

TURN will outline an alternate plan, one which is fair to ratepayers and requires PG&E to correct any failures stemming from poor record-keeping, inadequate testing, shoddy maintenance or under-spending on its own dime.

In addition, TURN is calling on the Commission to stop PG&E from reaping huge profits from overdue pipeline repairs.

Nate Solov
Office of Assemblymember Jerry Hill


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Let's see a map of PG&E repairs scheduled for the Peninsula. Which pipeline is most at risk of failure? Is there a regular maintenance schedule for gas pipelines on the Peninsula?

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