Assemblyman Jerry Hill (D-San Mateo) gathered September 4 with residents of San Bruno and Mayor Jim Ruane near ground zero of the Pacific Gas & Electric Co. (PG&E) natural gas explosion to provide an update on what has been done -- and what still needs to be done -- to improve pipeline safety since the September 9, 2010 explosion.
On September 9, 2010, a 30-inch-diameter welded natural gas pipeline owned by PG&E exploded in flames in the Crestmoor neighborhood. Eight people were killed and more than 50 were injured; 38 homes were destroyed and 17 damaged. Of the homes destroyed, eight have been reconstructed. Building permits have been issued for a dozen other homes, and planning reviews are pending for two more. Of the homes damaged, repairs are complete on 13 houses and permits have been issued for the remaining four.
While the community has worked to rebuild and move ahead, much must still be done by PG&E to ensure the safety of its natural gas systems. In a report issued last year just before the first anniversary, the National Transportation Safety Board (NTSB) blamed PG&E for a series of mistakes that led to the blast, including poor pipeline welds that went undetected because of lack of inspections and inadequate monitoring by the California Public Utilities Commission (CPUC).
In a filing just two weeks ago with the CPUC, the commission’s safety program wrote that after the explosion PG&E made “meaningless” pledges while doing nothing to change its corporate emphasis on profits over ensuring the safety of its gas pipeline system. “PG&E Co. has not delivered real corporate culture change,” safety program manager Raffy Stepanian wrote in urging CPUC to sanction the company, which faces hundreds of millions of dollars in fines.
Meanwhile, PG&E has been running a $10 million advertising campaign featuring CEO Tony Earley, who acknowledges the company “lost its way” before the disaster and says PG&E will improve safety. But Stephanian pointed out that PG&E has resisted change that would emphasize safety. Since the explosion, PG&E has flexed its political clout in the Legislature to defeat or water down several safety bills. What follows are bills by Assembly Hill that have cleared the Legislature:
Bills that are now on the governor’s desk:
AB 1456 – CPUC, Gas Pipeline Safety Performance Standards, Penalties for Utilities. Requires CPUC to adopt performance metrics for pipeline safety and evaluate the state’s gas utilities against those metrics. The commission may levy penalties on the utility for poor performance.
AB 578 – NTSB Recommendations. Requires CPUC to adopt gas pipeline safety recommendations of the NTSB if those recommendations are appropriate to California utilities. The commission may decide not to do so, but it must submit those reasons in writing as a part of the commission’s record of proceedings. NTSB is the nation’s preeminent advisory body on transportation and pipeline safety matters. This bill would ensure that NTSB’s safety recommendations are adopted since they have no power to enforce their recommendations. In the past year, pipeline explosions and fires in Cupertino and Roseville exposed our vulnerability to brittle, older plastic pipe. NTSB had recommended that pipe’s replacement, but those recommendations weren’t heeded.
AB 861 – Executive Compensation. Requires CPUC to determine the appropriate ratemaking treatment of bonus programs based on stock price and corporate earnings. Utilities are not typical corporations, and they cannot make more money by increasing market share or selling more product. Their revenue is set by the Commission. If a utility wants to increase its profit, it has to cut spending on operations and maintenance. This is exactly the type of activity that contributed to the sad state of PG&E’s pipeline infrastructure. PG&E’s former CEO Peter Darbee walked away after the San Bruno explosion with a $35 million severance package. Since he left, his former company has been fined nearly $60 million for violations that occurred under his watch, and more than $200 million in fines have yet to be levied. This legislation slowly but surely chips away at the complacent attitude that led to PG&E’s and CPUC’s inattention to safety.
Bills that have already been signed into law:
San Bruno Gas Pipeline Safety Reforms, AB 56 (Chapter 519, Statutes of 2011). Requires remote-controlled shutoff valves in high-population areas and the comprehensive testing and record-keeping of transmission lines. It also prohibits utilities from using ratepayer money to pay penalties for safety violations assessed by CPUC, and requires natural gas corporations to meet annually with local fire departments to review emergency response plans.
Exempt San Bruno Gas Explosion Victims from Taxes on Relief Payments, AB 50 (Chapter 18, Statutes of 2011). Exempts San Bruno residents from paying state taxes on recovery money they received from PG&E, Red Cross, and the City of San Bruno after the pipeline explosion.
Tax Relief for City of San Bruno and Explosion Victims, ABX6 11 (Chapter 2, Statutes of 2010, Sixth Extraordinary Session). Provides tax relief to victims of the San Bruno disaster. Allows homeowners who had qualified for a $7,000 state property tax exemption to still receive that write-off even if their home was destroyed as a result of the September 9 gas pipe explosion. Also provides assistance to the City of San Bruno, local schools, and San Mateo County by requiring the state to backfill first-year local revenue losses resulting from downward reassessment of properties affected by the disaster.
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Nate Solov
Office of Assemblymember Jerry Hill
916-319-2019
www.asm.ca.gov/hill
On September 9, 2010, a 30-inch-diameter welded natural gas pipeline owned by PG&E exploded in flames in the Crestmoor neighborhood. Eight people were killed and more than 50 were injured; 38 homes were destroyed and 17 damaged. Of the homes destroyed, eight have been reconstructed. Building permits have been issued for a dozen other homes, and planning reviews are pending for two more. Of the homes damaged, repairs are complete on 13 houses and permits have been issued for the remaining four.
While the community has worked to rebuild and move ahead, much must still be done by PG&E to ensure the safety of its natural gas systems. In a report issued last year just before the first anniversary, the National Transportation Safety Board (NTSB) blamed PG&E for a series of mistakes that led to the blast, including poor pipeline welds that went undetected because of lack of inspections and inadequate monitoring by the California Public Utilities Commission (CPUC).
In a filing just two weeks ago with the CPUC, the commission’s safety program wrote that after the explosion PG&E made “meaningless” pledges while doing nothing to change its corporate emphasis on profits over ensuring the safety of its gas pipeline system. “PG&E Co. has not delivered real corporate culture change,” safety program manager Raffy Stepanian wrote in urging CPUC to sanction the company, which faces hundreds of millions of dollars in fines.
Meanwhile, PG&E has been running a $10 million advertising campaign featuring CEO Tony Earley, who acknowledges the company “lost its way” before the disaster and says PG&E will improve safety. But Stephanian pointed out that PG&E has resisted change that would emphasize safety. Since the explosion, PG&E has flexed its political clout in the Legislature to defeat or water down several safety bills. What follows are bills by Assembly Hill that have cleared the Legislature:
Bills that are now on the governor’s desk:
AB 1456 – CPUC, Gas Pipeline Safety Performance Standards, Penalties for Utilities. Requires CPUC to adopt performance metrics for pipeline safety and evaluate the state’s gas utilities against those metrics. The commission may levy penalties on the utility for poor performance.
AB 578 – NTSB Recommendations. Requires CPUC to adopt gas pipeline safety recommendations of the NTSB if those recommendations are appropriate to California utilities. The commission may decide not to do so, but it must submit those reasons in writing as a part of the commission’s record of proceedings. NTSB is the nation’s preeminent advisory body on transportation and pipeline safety matters. This bill would ensure that NTSB’s safety recommendations are adopted since they have no power to enforce their recommendations. In the past year, pipeline explosions and fires in Cupertino and Roseville exposed our vulnerability to brittle, older plastic pipe. NTSB had recommended that pipe’s replacement, but those recommendations weren’t heeded.
AB 861 – Executive Compensation. Requires CPUC to determine the appropriate ratemaking treatment of bonus programs based on stock price and corporate earnings. Utilities are not typical corporations, and they cannot make more money by increasing market share or selling more product. Their revenue is set by the Commission. If a utility wants to increase its profit, it has to cut spending on operations and maintenance. This is exactly the type of activity that contributed to the sad state of PG&E’s pipeline infrastructure. PG&E’s former CEO Peter Darbee walked away after the San Bruno explosion with a $35 million severance package. Since he left, his former company has been fined nearly $60 million for violations that occurred under his watch, and more than $200 million in fines have yet to be levied. This legislation slowly but surely chips away at the complacent attitude that led to PG&E’s and CPUC’s inattention to safety.
Bills that have already been signed into law:
San Bruno Gas Pipeline Safety Reforms, AB 56 (Chapter 519, Statutes of 2011). Requires remote-controlled shutoff valves in high-population areas and the comprehensive testing and record-keeping of transmission lines. It also prohibits utilities from using ratepayer money to pay penalties for safety violations assessed by CPUC, and requires natural gas corporations to meet annually with local fire departments to review emergency response plans.
Exempt San Bruno Gas Explosion Victims from Taxes on Relief Payments, AB 50 (Chapter 18, Statutes of 2011). Exempts San Bruno residents from paying state taxes on recovery money they received from PG&E, Red Cross, and the City of San Bruno after the pipeline explosion.
Tax Relief for City of San Bruno and Explosion Victims, ABX6 11 (Chapter 2, Statutes of 2010, Sixth Extraordinary Session). Provides tax relief to victims of the San Bruno disaster. Allows homeowners who had qualified for a $7,000 state property tax exemption to still receive that write-off even if their home was destroyed as a result of the September 9 gas pipe explosion. Also provides assistance to the City of San Bruno, local schools, and San Mateo County by requiring the state to backfill first-year local revenue losses resulting from downward reassessment of properties affected by the disaster.
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Nate Solov
Office of Assemblymember Jerry Hill
916-319-2019
www.asm.ca.gov/hill
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