Mercury News editorial: PUC needs to hold PG&E accountable
by Editorial, San Jose Mercury News
was quite the bomb consultants for the California Public Utilities
Commission dropped on PG&E last week regarding the utility’s shoddy
More than a year after the San Bruno
tragedy, PG&E still doesn’t have its house in order, the consultants
said: "PG&E’s current integrity management program itself presents a
safety risk to PG&E’s field and station employees and the public."
said PG&E’s assertion that ratepayers should be responsible for
$222.8 million in improvements to its pipeline records program is, in
essence, ludicrous. "As consultants, we suggest that these costs are
excessive, and we cannot support PG&E’s request for them regardless
of their total."
The report will help determine
whether PG&E should be fined for its incompetence leading up to the
San Bruno blast, which killed eight people and destroyed 38 homes. The
PUC has had a cozy relationship with PG&E for the better part of a
decade, which may partly explain the utility’s laxity in even
fundamental business practices such as record-keeping.
to throw the book at PG&E. Ratepayers have to pay a fair share of
costs for new requirements, but keeping decent records — a minimal
expectation — should have been a given all along.
management admits it made mistakes, but officials still are playing
hardball in talks with regulators over who will pay for its past
Record-keeping is the tip of the iceberg; PG&E
collected more than a half-billion dollars from ratepayers for
improvements that were never made. It wants customers to pay 90 percent
of the cost of its $2.2 billion pipeline-renovation plan, part of it
work it had promised to do earlier.
PG&E still wants ratepayers to trust its cost estimates and assessments for the required work. Why should they?
are guaranteed an 11.3 percent return on equity, about a percentage
point above the industry standard, at the same time
customers pay some of the highest rates in the nation. PG&E was lax
in pipe safety and record keeping, but it was meticulous about the
bottom line: Profits exceeded $1 billion for each of the past three
years on revenues of more than $10 billion.
PG&E’s new leaders
say they are dedicated to getting the company’s house in order and
placing safety first, but their negotiating stance suggests a top
priority still is making money. The consultants were so nervous about
the utility’s current safety practices that they made two additional
recommendations in their report.
They suggest that the PUC take
note of PG&E’s internal report on record-keeping that
is developing. "The draft of this report provided a
damning indictment of the state of PG&E’s current record-keeping
practices, many of which have not changed since the San Bruno pipeline
rupture and fire," they said.
They also recommended an annual
records management audit of PG&E. It’s telling that the consultants
felt compelled to make such a fundamentally obvious recommendation. But
given the PUC’s failure to hold PG&E accountable in the past, the
consultants apparently saw little reason to trust the commission any
more than the utility.