Our Environmental Compliance Performance
PG&E’s operations are subject to extensive federal, state and local environmental laws and regulations. These requirements relate to a broad range of activities, including preventing the discharge of pollutants; properly transporting, handling, storing and disposing of hazardous wastes; protecting threatened and endangered species; and reporting and reducing carbon dioxide and other greenhouse gas emissions.
Compliance with these laws and regulations is the foundation of our commitment to environmental leadership. In fact, our environmental policy begins with a commitment to “comply fully with the letter and spirit of all applicable environmental laws and regulations.”
During 2010, the environmental organizations worked with the operating lines of business to ensure more effective and efficient compliance support. Through these efforts, and a continued focus on integrating environmental compliance tasks into our daily work processes, we exceeded our target for reducing the rate of environmental Notices of Violation (NOVs). Additionally, we made continued progress toward our longer term objective of strengthening the enterprise-wide environmental management system by the end of 2014—a core component of our five-year environmental leadership strategy.
Governance and Management Structure
PG&E employs a variety of governance practices and processes to ensure that we remain focused on high priority work when it comes to environmental compliance. Operational controls are critical so that actions to meet the Utility’s environmental compliance obligations are performed on time, on purpose and are repeatable. We are also continuously learning from our experience and integrating these lessons back into our work processes and staff development.
Compliance performance updates are provided weekly to all PG&E Corporation and Utility officers and reviewed monthly by the Utility’s officers. In addition, an annual environmental compliance summary is presented to the Public Policy Committee of PG&E Corporation’s Board of Directors.
During 2010, we completed the integration of our line-of-business environmental compliance support model—assuring a stronger relationship between operations and environmental personnel.
PG&E’s gas and electric operations and maintenance departments completed significant work last year to improve the reliability and capacity of our system and the majority of these projects required environmental permits. To support this important aspect of our business, we added personnel to oversee environmental compliance and strengthened our “release to construction” process to better ensure that environmental permits were in place and understood prior to construction.
Together, these measures helped to significantly reduce the number of NOVs from the prior year and enabled PG&E to exceed its 2010 target for the NOV rate—achieving a rate of 0.98 NOVs per 100 inspections (due to 8 NOVs) compared to a target of 1.68 (equivalent to 15 NOVs).
Environmental Management System
We continued to enhance our Environmental Management System (EMS) in 2010. Areas of focus included re-establishing roles and responsibilities for all of our environmental facility compliance obligations and monitoring our compliance through regular assessments, in addition to continuing the work started in 2009 on process improvements in operation of drinking water systems, implementation of our San Joaquin Valley Habitat Conservation Plan (HCP) and environmental permitting and compliance management for large operation, maintenance and construction projects, including construction stormwater permitting.
A notable achievement in 2010 was the implementation of the first phase of a new environmental compliance process to address the lack of clarity in roles and responsibilities, a root cause of compliance violations in 2009. The process uses an enterprise compliance tracking system (ECTS) software to clarify and document roles and responsibilities for environmental tasks at the facility level—providing an effective means of identifying what needs to be done, who needs to do it and by when.
The responsible individual verifies when an assigned task is completed, followed by the accountable department’s representative confirming the task has been performed. The first phase included implementation at 45 gas transmission and 35 multi-tenant service centers where different departments share the same building and service yard. Implementation will be expanded to the major electric distribution and transmission substation facilities and approximately 50 additional service center facilities in 2011. The remaining service centers (approximately 30) will be completed in 2012.
Last year, we also began piloting the use of environmental compliance management plans to improve the process for environmental permit compliance for large-scale construction projects. The plans help to define key roles and responsibilities for these projects and enhance communication among environmental and construction personnel, as well as contractors and agency representatives.
There were six pilot projects last year, five of which went to construction in 2010. As an example, we are using this approach for a major $4.5 million upgrade on the Cabrillo-Santa Ynez electric transmission line, where we are replacing approximately 14 miles of the existing single-circuit power line and replacing approximately 125 existing wood poles with new light-duty steel poles along the power line route. The plan enabled PG&E to adopt a more holistic and consistent approach toward ensuring compliance in an area rich in natural resources, and specifically includes measures to minimize construction impacts through appropriate management of stormwater and protection of endangered species and cultural resources.
Training
Training continues to be a key element of the Utility’s compliance program. In 2010, we developed and delivered a range of general awareness, work activity and task-specific environmental compliance training to line employees throughout our business. These trainings were delivered through a combination of computer-based, instructor-led and short “tailboard” sessions and covered a range of topics—from cultural resources to hazardous materials management.
In 2010, the Utility provided more than 16,000 training sessions to employees to meet their environmental compliance obligations based on the business operations they perform. Some of this training fulfilled programmatic permit requirements, such as sessions for more than 1,500 employees on the San Joaquin Valley HCP last year. In addition to these recorded trainings, we provided activity- and resource-specific trainings to our crews at active construction projects.
We also held bi-monthly calls to share information and best practices among environmental operations staff and, more broadly, distributed one-page summaries to first-line operations supervisors on various environmental requirements, such as proper disposal of treated wood.
Verifying and Auditing Our Performance
A robust environmental auditing program is key to ensuring that the Utility is effectively complying with the many environmental laws and regulations relating to our business. The Utility continues to review and monitor compliance in accordance with guidance from our Compliance and Ethics Department. As a complementary effort, the Utility reviews and audits environmental performance in three different ways—self-assessments, comprehensive reviews and internal audits:
- Self-Assessments: Environmental operations personnel perform self-assessments on facilities or projects under their responsibility. An assessment evaluates a facility or project on compliance with environmental regulations.
- Comprehensive Reviews: These reviews are performed by Shared Services personnel who are not responsible for compliance at the facility or project inspected. A comprehensive review involves evaluating all environmental compliance obligations associated with a facility or project’s operations.
- Internal Audits: The Internal Auditing Department conducts systemic and programmatic controls-based audits to independently analyze the effectiveness of the Utility’s environmental compliance management systems. The results of these audits are reported annually to the PG&E Corporation and Utility Audit Committees of the Boards of Directors.
During 2010, we performed a combination of 716 self-assessments, comprehensive reviews and internal audits of various environmental processes, facilities and projects, compared to 738 in 2009.
The number of comprehensive reviews declined from 71 in 2009 to 27 in 2010. This is due to the multiple compliance issues in 2009 that prompted the Utility to bring in an outside firm to perform compliance reviews and assist with a Compliance Improvement Plan. The 2010 comprehensive reviews are in alignment with the number performed in 2008. There were five internal audits in 2010, an increase from four in 2009.
Corrective Actions
In 2010, the Utility performed root cause analyses on NOVs received, resulting in corrective action plans which were then reviewed for system-wide application. Additionally, we emphasized the importance of completing the root cause analyses and implementing the corrective action plans in a timely manner and tracking progress through department-specific metrics. For example, at our Bakersfield Service Center, we received an NOV for improper asbestos abatement during construction. The resulting root cause analysis showed a gap in training, which we are remedying by creating customized environmental, health and safety training that is now required for all corporate real estate project managers.
We continue to use lean six sigma methodology to improve our programs—clearly defining, streamlining and documenting processes to improve compliance, consistency and efficiency. An example is reviewing the process to inspect and prepare documents for our annual Hazardous Materials Business Plans, which has led to increased efficiencies and reduced costs.
Plans for Strengthening Our EMS
The Utility has an EMS that is modeled after the ISO 14001 standard. None of our facilities are ISO 14001 certified; however, we are conducting an independent, third-party gap analysis relative to the ISO 14001 standard to create an EMS enhancement plan. This plan, which we expect to complete in mid-2011, will determine how we will strengthen our EMS by the end of 2014, including whether we will pursue ISO 14001 certification in the future. The plan will also incorporate the results of an environmental aspects and impacts analysis we began in late 2010.
More broadly, to improve our compliance performance, minimize risk and prevent errors, we will continue to:
- Roll out our compliance tracking system to facilities and develop a standardized format to track compliance management for large-scale construction projects,
- Implement process improvements and enhanced controls for facility and construction activity compliance,
- Develop programmatic- and regionally-based regulatory agreements such as HCPs and
- Standardize environmental risk assessment efforts across the Utility.
Operational Performance
PG&E tracks and reports annual environmental compliance performance across a broad spectrum of areas. This section details our performance results for 2010. More.
Reported Releases and Permit Exceedances
The Utility reported a total of 246 releases in 2010, an increase from 219 reported in 2009. A release is defined as an unintentional discharge of a regulated substance that meets a reporting threshold. The Utility reports releases that both meet and fall below regulatory thresholds in an effort to ensure operational transparency to local agencies. The additional releases were primarily due to an increase in weather-related equipment damage and third-party incidents. Ninety-three percent of these releases involved small amounts of mineral oil used in transformers or other petroleum-based substances. The Utility is continually updating emergency response procedures to provide employees and contractors with the tools needed to respond effectively.
PG&E reported one permit exceedance in 2010, a decrease from eight in 2009. An exceedance is defined as a discharge in excess of what is allowed by a permit. The exceedance occurred at our Diablo Canyon Power Plant and involved an exceedance of a permitted daily maximum limit for oil/grease contained in the plant’s Clean Water Act permit. The exceedance was reported the Central Coast Regional Water Quality Control Board.
Agency Inspections
Prior to 2010, the Utility tracked government agency inspections at facilities only. In 2010, the Utility also began tracking government agency inspections that occur on gas and electric transmission capital projects in field locations. A total of 819 agency inspections occurred in 2010, including 590 facility inspections and 229 field project inspections. The number of facility inspections increased from 550 in 2009. Certified Uniform Program Agencies, such as city and county environmental health departments and fire departments, performed the majority of inspections. The remainder of the inspections was performed by agencies such as regional air districts, the California State Lands Commission and the CPUC.
Enforcement Actions—Notices of Violation
The number of NOVs received during 2010 was eight, a significant decrease from 21 in 2009. Of the eight NOVs, two were self-reported by the Utility to the governing agency. The rate of NOVs per 100 agency inspections in 2009 decreased to 0.98 from 3.82 in 2009.
Five NOVs involved air quality regulations including an inadequate fuel vapor recovery system at a service center, improper asbestos abatement at a service center construction project and three reporting errors.
The three water violations involved discharge of sediment resulting in turbid water, inadequate protection of storm water drains and one reporting error.
2010 Enforcement Penalties and Settlements
In 2010, the Utility paid settlements and penalties stemming from five enforcement actions, resulting in monetary penalties totaling $23,950. Additionally, the Utility paid $15,932 to resolve seven 2009 enforcement actions, bringing total settlements and penalties in 2010 to $39,882.
| Compliance Data | 2008 | 2009 | 2010 |
|---|---|---|---|
| Notices of Violation (NOVs) | 12 | 21 | 81 |
| Rate of NOVs (per 100 inspections) | 2.03 | 3.82 | 0.982 |
| Releases/Exceedances | 286 | 227 | 247 |
| Penalties Paid | $119,625 | $3,646 | $39,882 |
| Agency Inspections | 590 | 550 | 819 |
| Audits Performed (System Audits and Comprehensive Facility Reviews) | 37 | 75 | 32 |
| Self-Assessments Performed | 459 | 663 | 684 |
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