PG&G diverted safety funds to bonuses

March 28, 2015

san-bruno-firePG&E diverted more than $100 million in monies for safety and operations to bonuses for executives and shareholder profits over a 15-year period that is linked to the 2010 San Bruno disaster, according to an independent audit and a staff report issued by the California Public Utilities Commission on Thursday.

The documents describe a poorly led company that is more concerned with profit than safety. Also, the commission said the pattern of spending is linked to the 2010 pipeline explosion in San Bruno that killed eight people and destroyed 38 homes. [SFGate]

The information uncovered in the documents could lead to millions of dollars in fines. In addition, the commission recommended changes in how PG&E spends money on gas-system maintenance before it seeks additional ratepayer funds.

Specifically, PG&E should allocate $95.4 million that the company under-spent on capital expenditures since 1997 – including pipeline replacement – for those purposes, it should use the $430 million in additional revenue it collected since 1999 “to fund future transmission and storage operations,” and it should use $39.3 million that it collected but failed to spend for pipeline-transmission operations and maintenance since 1997 for those purposes.

Suggestions that are not in line with PG&E’s current plans.

In August, PG&E outlined a plan to modernize its gas-transmission lines in response to the San Bruno disaster. PG&E’s plan is to spend $2.2 billion in upgrading its gas transmission systems, with 90 percent of that to be paid by gas customers through rate increases, with the rest covered by company investors.

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  1. Francesca Bolognini says:

    Reliability of supply is mostly due to the nothing less than heroic work ethic of the maintainance workers. As for the executives, they have a notorious record of siding with profits before safety. I would not equate “generally excellent safety” with a nuclear plant built on a confluence of earth quake faults in a tsunami zone in ANY reality. As for equating Mothers for Peace with “nutgroups”, this is typical TROLL behavior, a tactic used to disrupt intelligent discussion and a generalization used to invalidate an opinion against which you have no substancial arguement. Since you use a false name, it is easy to conclude that you would not be willing to make these comments in public and that you most likely work for PG&E. And, by the way, our “affordable” rates are notoriously high in comparison to the rest of the country. I applaude the PUC for finally standing up to a utility that it has, in the past, most often given the rubber stamp treatment at the expense of the public that it is employed to protect.

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

    So, a bunch of (frequently mindless) state bureaucrats use a one-time admitted disaster to claim PG&E misspent millions here, tens of millions there? And the anti-nuclear civilian power nuts jump on the bandwagon.

    They are one of the world’s most reliable power utilities covering a spread out and difficult region, prone to winds and slides and nutgroups like Mothers for Peace. I think PG&E is doing a great job balancing generally excellent safety with affordability. Like SLO_Johnny points out below, not all aging pipes can be instantaneously or easily replaced.

    This PUC report is a first stab government bureaucrat driven guideline at possible costly improvements, not a definitive and accurate condemnation of PG&E, though the report attempts to be so. This appears to be a clumsy government follow up to the REAL story where serious penalties were properly assessed for not acting quicker to major reports of gas odor in the neighborhood.

    This report is just easily dismissed government and intervenor drivel.

    (-13) 23 Total Votes - 5 up - 18 down

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