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State Regulators To Decide Who Covers PG&E Costs For Fixing Pipelines

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San Bruno explosion, gas pipeline

View of ruptured section of the San Bruno pipeline that caused an explosion, September 9, 2010, with an investigator cleaning a fracture surface. (NTSB)

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SAN FRANCISCO (KCBS) – Following a brutally harsh report by the National Transportation Safety Board on who was at fault for the gas pipeline explosion that killed eight people last September in San Bruno, state regulators will have the final say on who foots the bill for pipeline upgrades by Pacific Gas and Electric.

The cost of upgrading the utility’s pipeline is estimated at $2 billion. In filings with the Security Exchange Commission, PG&E proposed that residential customers pay an extra $1.93 a month starting next year to pay for the infrastructure fix.

KCBS’ Margie Shafer Reports:

“Those companies, under regulatory law and practice, are entitled to pass on costs that are mandated for improvement of the lines to ratepayers,” said former California Public Utilities Commission commissioner and the National Director of Regulatory Affairs for the Utility Workers Union Carl Wood. “That is unless the companies had actually received money in the past that they haven’t spent properly.”

But Mindy Spatt with TURN, The Utility Reform Network, said she believes PG&E has not spent money on safety as promised.

“If PG&E needs to play catch-up now, it should not be at the customer’s expense,” Spatt said.

If the CPUC finds that the utility spent money somewhere else that they should have been spent on pipeline safety and improvements, the costs can’t be passed on to ratepayers. PG&E spokesman David Eisenhauer wouldn’t speculate on what decision the CPUC might come to.

“When we’re given funding for replacement work, we put that in a budget and spend it,” Eisenhauer said.

The NTSB recommendations will likely result in infrastructure upgrades across the country.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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