Monitoring and Measuring Our Performance

PG&E's policies, management systems, review processes and programs are all designed to ensure our compliance with all applicable environmental requirements, as well as to provide a foundation for elevating our performance above and beyond the legal and regulatory baseline.

Environmental Management System

Recognizing the need for continuous improvement and a stronger sense of shared responsibility across the enterprise, we continued to enhance our Environmental Management System in 2007. We focused on creating targeted environmental management plans aimed at enhancing performance in specific areas such as waste minimization, air and water quality, tank management, natural resources and climate change. We commenced work on 16 plans and have identified additional areas for future plans.

The plans identify current regulatory trends, initial and ongoing compliance and monitoring activities, interdependencies, resource allocation and training requirements. Additionally, each plan includes project or program milestones, metrics and accountability for performance. Using these plans as a foundation, our work continues as we strive to more effectively prioritize and manage our processes to reduce our environmental impact.

Auditing Our Performance

PG&E's environmental policy requires that we develop and implement a risk-based audit plan to ensure periodic independent review of all aspects of our environmental performance.

We performed 62 formal audits in 2007 to assess the environmental compliance of our facilities, operations and vendors with regulatory standards for air and water quality; management of polychlorinated biphenyls (PCBs), hazardous materials and waste; and protection of endangered species. All audit findings are reported to the applicable operations officer and are required to be corrected in a timely manner.

In addition to the formal audits discussed above, PG&E environmental personnel conducted 1,034 compliance assessments, which provided valuable information to operations employees identifying process changes to improve compliance performance.

Operational Performance

PG&E's environmental policy and Environmental Management System require that we track and report annual environmental performance across a broad spectrum of areas. This section details our performance results for 2007.

Reported Releases and Permit Exceedances

The Utility reported to various government agencies a total of 227 releases to the environment and/or permit exceedances, a 30 percent decrease from 2006. A release is an unintentional discharge of a regulated substance that meets a reporting threshold; an exceedance is a discharge in excess of what is allowed by permit. The number of releases is comparable to years prior to 2006. (The number of releases in 2006 was anomalous due to transformer failures during a major heat storm in July and August of that year.)

Our crews and outside contractors respond to all spills—including those with only trace amounts of material. We clean up and report all such incidents in accordance with all applicable laws and regulations. The majority of the releases in 2007 were minor, involving small amounts of material such as mineral oil used in transformers, and more than one-third were either weather-related equipment damage or caused by third-party accidents.

Agency Inspections

Government agencies conducted 530 routine inspections of PG&E's facilities in 2007, up from 517 inspections in 2006. Certified uniform program agencies—such as environmental health departments and fire departments—performed the majority of the inspections and are generally responsible for enforcing hazardous waste and hazardous materials requirements at our facilities.

Enforcement Actions—Notices of Violation (NOVs)

The Utility received a total of 14 NOVs from government agencies during 2007, an increase from eight in 2006. The rate of NOVs per 100 agency inspections in 2007 increased, as well. There were 2.64 NOVs per 100 agency inspections in 2007, compared with a three-year average of 1.98.

Of the 14 NOVs received during 2007, 7 involved water quality regulations. Three NOVs were related to underground storage tank management, including failing a routine annual secondary containment test, failure to conduct required inspections and not obtaining a permit to operate. Two NOVs were for drinking-water violations involving failure to provide notification of an exceedance and late submittal of a consumer confidence report to system users. (Note: The facility where this occurred does not have a source of public drinking water; it treats infiltrated surface water for use by employees.) The remaining two findings involved the discharge of sediment to surface water during construction activity that ruptured a drinking water pipe and a release of cooling tower liquid caused by an improperly closed sampling valve.

Five NOVs involved air quality regulations. Two NOVs were issued for not reporting an exceedance of run-time for an emergency generator and not conducting air monitoring at a site remediation project. NOVs were also received for not paying permit fees, not obtaining an operating permit for a dehydrator facility and not obtaining proper construction authorization for an upgrade to a fueling island.

Two NOVs involved the storage of hazardous waste and materials. In one instance, a waste drum did not have a bung in place. In the other, hazardous material was stored in a fume hood.

PG&E resolved all of these issues by swiftly correcting the finding and conducting root-cause analyses to identify and implement corrective actions to prevent recurrence. In light of the increase in findings from the previous years, PG&E has also instituted a failure mode and effects analysis to realign the internal compliance assessment program to more effectively identify compliance issues. We are using Lean Six Sigma tools, the accepted standard in business for establishing process excellence, to improve compliance performance and focus in on areas of greatest risk. These efforts will also align PG&E's internal review program and associated corrective actions with the priorities of regulatory agencies.

2007 Enforcement Penalties and Settlements

In 2007, the Utility received four NOVs resulting in monetary penalties, and we paid penalties on two other NOVs received in 2006. The total penalty payments made in 2007 were $222,450 and all involved air quality regulations. Specifically, we paid $220,000 in 2007 to settle a 2006 records violation under the state's smoke check program for heavy-duty diesel vehicles. We also paid $100 in 2007 for a 2006 violation for failure to maintain a gasoline vapor recovery system. The 2007 penalties were $900 for late payment of operating permit fees, two separate fines of $600 each for not obtaining air permits prior to equipment operation and a $250 penalty for exceeding the allowable run-time on an emergency generator.

Compliance Data
 
2005
2006
2007
Notices of Violation (NOVs)
9
8
14
Rate of NOVs (per 100 inspections)
1.75
1.55
2.64
Releases/Exceedances
274
324
227*
Penalties Paid
$9,230
$6,800
$222,450
Agency Inspections
513
517
530
Formal Audits Performed
62
59
62
Compliance Assessments Performed
1,872
1,868
1,034

* Figures include both PG&E- and non-PG&E-caused releases/exceedances. In 2007, for example, 37% were either weather-related or caused by third-party accidents, compared with a three-year average of 49%.