PG&E wants to pass San Bruno costs off to customers
February 18, 2011
Last year’s fatal pipeline blast in San Bruno is costing more than PG&E expected and the utility may ask customers to help foot the bill. [SF Chronicle]
PG&E officials said Thursday that the costs for dealing with the Sept. 9 Bay Area blast could reach as high as $763 million by the end of 2011. They expect to spend between $200 million and $300 million in 2011 on pipeline tests, record searches and other activities related to the blast – more than twice the company’s previous estimate.
PG&E already spent $63 million last year responding to the explosion, which killed eight people. The company also set aside $220 million in 2010 to pay for San Bruno lawsuits and may set aside another $180 million this year.
The expenses have already eaten into PG&E’s profits. The utility made $1.1 billion in 2010, down 9.8 percent from the previous year’s profit of $1.22 billion. Without San Bruno and other one-time items, the company said it would have made $1.33 billion in 2010, a 9 percent year-over-year gain.
Chief Financial Officer Kent Harvey suggested Thursday that PG&E may ask state energy regulators to let it pass on some of the San Bruno-related costs to its customers.
The issue of who should pay for the many pipeline inspections and tests that regulators have ordered PG&E to conduct in response to the blast has already provoked heated debate.
“If this work is a direct result of PG&E’s negligence – failure to properly test, failure to properly maintain, failure to keep good records – then those costs should be borne by shareholders, not customers,” said Mindy Spatt, spokeswoman for The Utility Reform Network consumer watchdog group.
Meanwhile, as part of its annual financial report, the company also said that its effort to install new, wireless SmartMeters ran $36 million over budget in the fourth quarter of last year.