PG&E’s Profitable Threat to Our Critical Infrastructure

Back when PA’s Department of Homeland Security was investigating anti-fracking activists as potential terrorist threats to critical infrastructure, I noted that the bigger threat to critical infrastructure pipelines was corporations that pocket rate increases rather than dedicating them to maintaining the pipelines.

Just to take one example, who do you think is a greater risk to our oil and gas infrastructure? A bunch of hippie protesters trying to limit drilling in the Marcellus Shale and thereby protect the quality of their drinking water (which is, itself, considered critical infrastructure)? Or PG&E, which sat on knowledge of an extremely high risk pipeline for three years even after setting aside the money to fix it?

Now CA’s Public Utilities Commission is out with audit results that show just how negligent PG&E was.

Pacific Gas and Electric Co. diverted more than $100 million in gas safety and operations money collected from customers over a 15-year period and spent it for other purposes, including profit for stockholders and bonuses for executives, according to a pair of state-ordered reports released Thursday.

An independent audit and a staff report issued by the California Public Utilities Commission depicted a poorly led company well-heeled in its gas operations and more concerned with profit than safety.

The documents link a deficient PG&E safety culture – with its “focus on financial performance” – to the pipeline explosion in San Bruno on Sept. 9, 2010, that killed eight people and destroyed 38 homes.

The “low priority” the company gave to pipeline safety during the three years leading up to the San Bruno blast was “well outside industry practice – even during times of corporate austerity programs,” said the audit by Overland Consulting of Leawood, Kan.

Congresswoman Jackie Speier, who represents San Bruno, enunciates what’s going on perfectly.

“It is truly unconscionable that PG&E was allowed by the CPUC to steal ratepayer monies that should have been spent on safety and, instead, was put in the pockets of PG&E shareholders,” said Rep. Jackie Speier,

Though, if PG&E were Muslim and brown-skinned, they’d call this terrorism, not just theft.
Marcy has been blogging full time since 2007. She’s known for her live-blogging of the Scooter Libby trial, her discovery of the number of times Khalid Sheikh Mohammed was waterboarded, and generally for her weedy analysis of document dumps.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including the Guardian, Salon, and the Progressive, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse and dog in Grand Rapids, MI.

5 replies
  1. person1597 says:

    Once upon a time, PG&E was considering a plan to install small nuclear power plants throughout the service area. Not quite “neighborhood nuclear superiority” but maybe “municipal nuclear superiority”.

    If power production plants were to be widely distributed instead of concentrated in a few large installations, supply continuity would be sustainable at the local level with grid reliability enhanced regionally. Call it an early attempt at the “smart grid”. Ah, the Reagan/Bush years…

    Of course, that plan never materialized. Gee, someone must have poured cold water on that hot idea!

    How easy would it be to clean up after a a teeny-tiny nuclear accident, err, boo-boo? Got 40 years?

    But in fairness, look how important the concept of responsibility plays into the corporate marketing rhetoric…

    PG&E’s responsible stewardship of this precious natural resource allows for scientists and others to explore its habitat and ecology.

    Maybe they meant “exploit” instead of “explore”. Of course, the utility was keen to re-license Diablo Canyon until that little dust-up in Japan. No more!

    Though Diablo Canyon’s engineers assured public officials in the late 1960s that the area around the plant had only “insignificant faults,” at least two faults have been discovered since its construction, including one in 2008 less than a mile away.

    That fault, called Shoreline, is thought by geologists to be capable of producing a magnitude 6.5 quake. The other fault, called Hosgri, is rated up to 7.3.

    C’mon, what has science got to do with public policy anyway?

    Absolutely nothing, Hunh!

  2. P J Evans says:

    Well, Diablo has been up and running for at least 20 years, so it would need some fairly serious maintenance work done on it anyway. I’d say it’s not as big a problem as their crappy pipeline maintenance, though. (Blowing up your own customers is tacky.) Also, they retrofitted the containment buildings with more and stronger shear walls under the reactors while it was in the licensing process, so it’s possibly safer than you think.

  3. P J Evans says:

    Rumor has it that the various federal agencies are considering requiring companies that supply both gas and electricity to run them as separate companies, not merely separate parts of one company, because they’re really different utilities, at heart, and can’t be managed the same way. And the evidence tends to suggest that the corporate culture in power companies tends to be a bit less safety-oriented.

  4. rugger9 says:

    Pacific Graft and Extortion [they’ll cash checks made out that way, I’ve tested it a few times] wants the ratepayers to pony up 90% of the repair costs [which if course means 100, we just have to look harder], and this is yet another example of why anyone other than the captured PUC doesn’t consider anything PG&E says is remotely credible.

    They’ve been caught with no records, falsified records, even this particular revelation wasn’t news as such, just the depth of it. This is a top management issue, most of the line workers do earn their pay and aren’t involved in the malfeasance. The management culture is as described by PJ, strictly bonus-driven,

    They did replace some of the top managers [who of course promise transparency], but as we saw in the Gulf, no one has been held criminally liable for the deaths from the foreseeable and avoidable disaster brought on by corporate policies and input.

    Having run nuke plants for several years in the past, I will tell you that safety is indeed job one on the Naval plants, and we are trained to handle all of the plant states and casualties. PJ’s comment is apt here as well, since we saw in Fukushima as well as Chernobyl [and attempted for Diablo Canyon] the request to roll the dice on extending the service life on old plants. Keep in mind that hydrogen embrittlement shifts the brittle fracture curve significantly, and all of those leftover neutrons [not used on uranium or expended into the poisons] created by fission decay into protons [i.e. hydrogen]. Not only for the reactor itself, but also the support structures, and that risk isn’t trivial. The culture is such that the managers figure they won’t be holding the bag when the s^%^%t hits the rotating air movers.

  5. person1597 says:

    Glad to hear that safety matters!

    Engineers can design to a specification but management can always be depended on to “change the spec” to suit priorities. Nature vets all endeavors.

    Opaque to the public eye, commercial nuclear power necessitates a veritable Higgs field of bad choices. Sooner or later, the stochastic risks give way to a deterministic outcome.

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