Politics & Government
San Francisco CA: WHAT Will Senator Hill Propose?
San Francisco CA: WHAT Will Senator Hill Propose?
Senator Jerry Hill Announces Plan for Legislation to Earmark More Money from Proposed $1.4 Billion Fine Against PG&E to Gas Pipeline Safety
Hill’s Bill to Ensure That More of PG&E’s Fine for 2010 San Bruno Explosion Offsets Rate Hikes Customers Would Have to Pay for PG&E’s Pipeline Improvements
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WHAT: State Senator Jerry Hill will announce he is introducing ratepayer protection legislation to ensure that the bulk of the $1.4 billion fine against Pacific Gas and Electric Co. for the deadly 2010 San Bruno explosion is spent on pipeline improvements and related safety measures. State regulators announced the proposed fine this week, just days before the fourth anniversary of the disaster.
Under the fine, which was proposed by two administrative judges hired by the California Public Utilities Commission (CPUC), only $400 million would go for pipeline improvements, about $50 million would be allotted to enhance pipeline safety and $950 million would go to the state general fund. The $950 million could be spent in other regions of the state, but that allocation would come at the expense of customers in PG&E’s service area, who already are expected to face $12 billion in rate hikes to pay for PG&E’s work to bring its pipeline system up to modern standards.
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Hill’s legislation would prevent customers from bearing even more costs related to pipeline modernization and safety measures. The bill would also promote continued focus on pipeline safety improvements in two ways: The bill would establish an independent monitor, who would oversee PG&E’s use of customers’ money for safety upgrades, and it would fund a pipeline safety trust for California – a similar entity was created in Washington state after a deadly pipeline disaster in 1999.
The proposed $1.4 billion fine—which Hill has argued should be closer to the CPUC staff recommendation of $2.25 billion—could be modified by CPUC commissioners before final approval. PG&E has indicated in a filing with the Securities and Exchange Commission that it intends to seek a lower fine from the CPUC.
WHEN:
11:15 a.m., Friday, September 5, 2014
WHERE:
In front of the California Public Utilities Commission Building
505 Van Ness Avenue, San Francisco
Contact:
Aurelio Rojas, communications director, 916-747-3199 cell, or Leslie Guevarra 415-298-3404 cell
Background:
On September 9, 2010, a PG&E natural gas pipeline exploded in San Bruno’s Crestmoor neighborhood. Eight people were killed, more than 50 others injured, and 38 homes were destroyed and 17 damaged.
On Tuesday – one week shy of the tragedy’s fourth anniversary – two administrative judges proposed fining PG&E $1.4 billion for the company’s role in the explosion. The proposed penalty, resulting from more than 3,700 safety violations, is far below the $2.2 billion recommended by the CPUC’s own staff and consumer groups. Of the $1.4 billion fine, $400 million would go for pipeline improvements and about $50 million would be used to enhance pipeline safety.
While the proposed fine would provide the state treasury with a $950 million windfall to be spent for purposes unrelated to the explosion, the money would come at the expense of the PG&E ratepayers.
Hill’s bill, which he plans to introduce when the Legislature reconvenes on December 1, would allocate the $950 million currently designated for the state’s general fund in the following manner:
Ø $50 million in seed money for a pipeline safety trust, which would be created as an advocate for pipeline safety on behalf of California’s utility ratepayers in matters before the CPUC and federal regulators
Ø $30 million for an independent monitor to watch over PG&E’s safety improvements and the CPUC’s oversight of PG&E
Ø $300 million to state’s General Fund (consistent with the CPUC safety division proposal)
Ø All other money of the currently proposed $950 million for the state would be used to offset the $12 billion in rate hikes PG&E has said it will pass along to customers for its pipeline safety improvement
Should the CPUC commissioners decide to accept the $1.4 billion penalty against PG&E, this bill would ensure that more than 80 percent of the proposed fine would be spent on gas pipeline improvements and safety measures.
PG&E has made a number of mistakes in its pipeline safety improvements since the explosion in San Bruno. The mistakes include setting an improperly high pressure in the pipeline running through San Carlos and failed maintenance work in the city of Carmel, which led to the explosion of an unoccupied house. The errors resulted from the mismanagement of pipeline records.
Recent events – including the release of emails between the CPUC and PG&E – highlight the cozy relationship between CPUC management and PG&E, underscoring the need for an independent monitor to safeguard the public.
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Nate Solov
Office of Senator Jerry Hill
Photo Credit: San Bruno Patch Archives
Source Credit: California State Senator Jerry Hill
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