California Claims PG&E Falsified Gas Safety Records

By Katherine Blunt 

PG&E Corp. falsified natural gas pipeline-safety records over a five-year period ending in 2017, California regulators said Friday, dealing another blow to the state's largest utility as it struggles to deal with mounting lawsuits blaming it for devastating wildfires.

The California Public Utilities Commission said an investigation by its safety division found that PG&E lacked sufficient staffing to locate and mark natural-gas pipelines as required by law, and pressured employees to complete the work. As a result, the agency alleged, PG&E staff falsified some of those records.

The commission directed PG&E to take "immediate corrective measures" and opened a proceeding to consider penalties against the company.

"Utility falsification of safety related records is a serious violation of law and diminishes our trust in the utility's reports on their progress," CPUC President Michael Picker said in a statement. "These findings are another example of why we are investigating PG&E's safety culture."

PG&E didn't immediately respond to a request for comment Friday.

The CPUC last month expanded a continuing probe of PG&E's safety practices and said it would explore the way the company is structured and managed.

The commission began the investigation of the company's safety culture three years ago, after a devastating natural-gas pipeline explosion in 2010 killed eight people and caused widespread damage in San Bruno, Calif. The company was fined $1.6 billion by state regulators in connection with that incident. It was also fined $3 million by a federal judge and is on federal probation as a result.

PG&E shares have fallen sharply in recent weeks after the company disclosed that some of its equipment malfunctioned in the area of last month's Camp Fire, minutes before the fire was reported. The Camp Fire killed at least 86 people and destroyed about 14,000 homes, making it the state's deadliest fire ever.

The utility released new information this week indicating that one of its power lines near where the Camp Fire started Nov. 8 came apart immediately beforehand and fell from the metal tower that held it aloft.

Investigators, who are still trying to determine the cause of the fire, removed some utility equipment from the tower and from another line with broken power poles for closer analysis.

PG&E asked state regulators on Thursday to approve a plan to sharply increase revenue a three-year period, with a rate increase on customers of 12%, or $1.1 billion, in 2020 that would rise to 24%, or over $2 billion a year, by 2022.

The company said the request reflected anticipated additional spending on wildfire mitigation and insurance costs, but didn't include the largest potential expenses it faces: liability from lawsuits alleging it is to blame for wildfires in recent years. Experts have estimated those liability costs could run into the tens of billions of dollars.

While state fire investigators haven't determined whether PG&E equipment was to blame for the Camp Fire or the Tubbs Fire -- the deadliest of 2017 -- they have found PG&E responsible for 17 major fires in 2017 that destroyed 3,256 structures and killed 22 people. Eleven of those cases have been referred to county district attorneys for possible criminal charges against the utility.

Write to Katherine Blunt at [e-mail]

(END) Dow Jones Newswires

December 14, 2018 19:23 ET (00:23 GMT)

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