PG&E Defends Proposal to Pass Pipeline Safety Costs to Customers

PG&E issued a statement today saying it wanted to set the record straight about a claim that the utility would be passing down safety costs to ratepayers for a new plan it recently proposed to enhance its pipeline system.

Shortly before the National Transporation Safety Board on the Sept. 9, 2010, pipeline explosion in the Crestmoor neighborhood that found PG&E at fault for the accident, PG&E to enhance electronic monitoring and install automatic shutoff valves, among other changes, on its pipelines. The upgrades would cost about $2.2 billion, with ratepayers picking up 90 percent of the tab.

The utility , most notably from Assemblyman Jerry Hill, D-San Mateo, for what critics say is a slap in the face after the tragic San Bruno fire, in which eight people died and 38 homes were destroyed.

On its public relations website, PG&E Currents, the utility said it wanted to make clear that any costs related to bringing the company’s gas operations up to existing standards would be shouldered by its shareholders.

However, the billions PG&E is now proposing represents costs to meet new, industrywide standards set by the California Public Utilities Commission, and customers—not shareholders—should cover about 90 percent of those costs. That would amount to an increase of about $1.93 per month for residential customers, which PG&E described as reasonable.

“There’s a huge difference between charging customers for work that PG&E ‘should have been doing’ and work that is now necessary to meet new and better safety rules,” the utility said.

PG&E said the proposal is necessary because new legislation has mandated that utilities keep up with more stringent pipeline safety improvements since the San Bruno explosion.

“As improvements are made to the existing infrastructure, customers will see tangible new value from the investments PG&E and other state utilities are proposing,” PG&E said. “Utilities should have the opportunity to recover such investments in the years ahead, just as they have in past years when standards increased for safety, clean air, clean water and other priorities.”

San Bruno Patch will add to this story as more information becomes available.