SAN FRANCISCO (KCBS) – Assemblyman Jerry Hill has appealed to the California Public Utilities Commission to change the method used to establish the rate of return on utilities. This request comes amid reports Pacific Gas and Electric could still have “salvaged” pipe in its system.

Hill spoke to the CPUC as it considers PG&E’s $3 billion requests for infrastructure repair work. PG&E has requested rate payers pick up the tab for approximately 90 percent of the cost to upgrade the lines.

“It’s up to you, commissioners, to protect the ratepayers from being taken advantage of,” said Hill. “There’s a lot of that pipe underground, and that pipe is similar, or could be the exact same type of pipe that was in San Bruno during what we saw occur last year.”

KCBS’ Margie Shafer Reports:

“This is absurd coming from a company that makes one billion dollars in profit each year, and paid this departing CEO a $35 million golden parachute,” said Hill.

State regulators have said  it appears the utility used salvaged material to build its natural gas transmission lines beneath the Bay Area in the 1940s and 50s.

PG&E spokesman Brian Swanson said that safety is the companies top concern.

“Where we’re at now is trying to understand what documents the CPUC is referring to, and what issues they’re referring to, just to get a better understanding overall of what they’ve discovered,” said Swanson.

Following the San Bruno explosion PG&E reduced the pressure on pipes to prevent a serious explosion, but the utility wants to return to normal operating pressure before the end of the year. Hill said that decision needs further review in light of the salvage pipe findings.

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