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.


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12 Comments

  1. calvertworthington says:

    Yep, they did. After that they had a new Dornier 328 turboprop. In the ’80’s I was told they were shuttling techs back and forth from the bay area for the Diablo project.

    (1) 1 Total Votes - 1 up - 0 down
  2. SLORider says:

    Love all the corporation anger… now where’s the anger at government?

    What do you think happens when government screws up?

    What do you think happens when government goes over budget?

    THE COSTS GET PASSED ALONG TO US.

    Why is Governor Brown asking for tax extensions in June?

    TO PASS THE COSTS ALONG TO US.

    Just asking for consistency.

    (2) 4 Total Votes - 3 up - 1 down
    • bobfromsanluis says:

      “What do you think happens when government goes over budget?
      THE COSTS GET PASSED ALONG TO US.”

      Actually, with the exception of the small percentage of what is actually paid by corporations, it is ALL paid by us anyway, over budget, under budget or even if the budget is right on target; that is what government is supposed to be, providing the functions that government provide (building, maintaining and expanding where needed PUBLIC INFRASTRUCTURE, oversight {regulation} and enforcement). And when we do not like the outcomes of what publicly elected officials have wrought? We “un-elect” them, or, in the case of the trumped up charges against Gray Davis, they can be recalled. What happens when a corporation does things we don’t like? We don’t patronize them if we can (hard to do for monopolies like PG & E) or if we are also shareholders, we can attempt to have the CEO’s terminated; but that usually results in some other person without a conscience in taking their place. And of course, if the corporation does something that is against the law, they can be prosecuted, if a D.A. or Attorney General has the spine to do so.

      (0) 0 Total Votes - 0 up - 0 down
  3. R.Hodin says:

    Here’s hoping that Gov. Brown will kick former Edison exec. Michael Peevey off of the CPUC. What a shock it would be to have a public utilities commission board that actually listens to its Ratepayer Advocate division.

    REPEAL PEEVEY !!!

    (5) 5 Total Votes - 5 up - 0 down
  4. ApathyWillKillYou says:

    “And if PG&E is allowed to pass on these costs to the consumer, what motivation do they have to even try to run a safe operation?”

    EXCELLENT POINT!

    (11) 13 Total Votes - 12 up - 1 down
  5. calvertworthington says:

    How dare anyone suggest that a corporation is wrong. It’s only human, after all.

    Dow jones loves’em – http://www.yachtchartersmagazine.com/node/1100150

    I love their 15.2 million dollar Embraer ERJ-135 37 passenger corporate jet DAILY shuttles four or five PGE big-wigs into SLO from Oakland. Must be rough. Lots of room for golf clubs. Yearly cost of ownership 2.5 million.

    http://en.wikipedia.org/wiki/Embraer_ERJ_145_family

    (5) 5 Total Votes - 5 up - 0 down
    • SLOChildrenAtPlay says:

      Nothing new there. PG&E has maintained a “business aircraft” at SLO County Airport for 20+ years now. I remember back in the late 80’s they had a Grumman Gulfstream I turboprop at the airport which flew in every morning from the Bay Area, and left every afternoon about 4pm – four days a week.

      (2) 2 Total Votes - 2 up - 0 down
    • ApathyWillKillYou says:

      By some accounts, the ERJ 145 has a cost of ownership of about $2,500,000 per year!

      (0) 0 Total Votes - 0 up - 0 down
  6. kellygirl says:

    $36 million in cost overruns on Smart Meters??? Wow. That’s equally stunning and depressing.

    (5) 7 Total Votes - 6 up - 1 down
  7. danika says:

    Like they never intended to pass the cost to us all along? We may have been born at night, but not last nite. EVERYTHING passes to the consumer. Everything but the bonuses, excessive revenues and profits. I never had the choice for a smart meter. They came and installed it on a Saturday when I was not at home. I should have at least had the option. It miffs me off that my bill has not increased, my health has not gotten worse, and my animals are unaffected by the smart meter. Would have loved to complain about it, but…it is what it is.

    (-1) 11 Total Votes - 5 up - 6 down
  8. standup says:

    The stupid idiots shouldn’t have spent 47 million on the prop 18 (I think) deal that would have created a monopoly because they would have still had that money now. And don’t forget, they asked for a rate increase two days after that election. Screw PGE and their poor management.

    (14) 14 Total Votes - 14 up - 0 down
  9. bobfromsanluis says:

    “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,” Amen. Is it possible that PG&E could be more greedy than they already seem? Didn’t they have insurance to cover this possible scenario ? I know that they don’t carry any insurance regarding any problems related to the nuclear materials at Diablo ( the insurance industry won’t touch nuclear materials at all) but it doesn’t seem like PG&E is being responsible in the their operations if they don’t have insurance for other parts of their operation. And if PG&E is allowed to pass on these costs to the consumer, what motivation do they have to even try to run a safe operation? By making the shareholders and the company responsible for the costs, they are being held fully accountable for their actions (or lack of actions, i.e., maintaining the gas pipelines in good order). Let’s not forget also that they are a monopoly ( 1.1 BILLION just in PROFIT! ) WTF?

    (15) 15 Total Votes - 15 up - 0 down

Comments are closed.