San Bruno Accident and PG&E’s Ongoing Response

Transforming Our Gas Business

In a strategic shift to how we approach operations, in April 2011, we separated PG&E’s electric and gas operations into two distinct lines of business within the company. The change is designed to strengthen management oversight and provide clear lines of accountability. Each line of business is now overseen by dedicated officers at the newly created executive vice president level. The gas business is now led by Nick Stavropoulos, a 30-year industry veteran who was hired after a global search and who reports directly to the President of Pacific Gas and Electric Company. Among his areas of focus are strengthening our gas pipeline infrastructure, updating our operating practices, integrating cutting-edge technology into existing systems and adding top-flight gas engineering expertise at all levels of the gas organization.

Additionally, the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company have commissioned an independent third-party study of our natural gas system practices and operations. This external assessment is being completed by a highly experienced pipeline safety and engineering firm, the Blacksmith Group, with specific expertise in helping companies evaluate and improve their operations following accidents. The Blacksmith Group is performing in-depth assessments of nine different components of our gas business. The company has committed to implementing further changes based on their findings and recommendations.

While the steps PG&E has taken so far have been directed toward the immediate needs of our gas transmission system, we are also dedicated to making our gas pipelines as safe as possible in the long-term. To do that, PG&E is taking a comprehensive look at our system and analyzing fortification options such as modernizing key pipeline segments, expanding our use of automated valves and increasing the use of next-generation pipeline inspection technology. We provided our initial perspective on this work when we filed our Pipeline Safety Enhancement Plan with the CPUC in late August.

These efforts will be shaped by the CPUC’s Gas Pipeline Safety Order Instituting Rulemaking (OIR), a major initiative announced by the Commission earlier this year to bring clarity and focus to future gas pipeline safety efforts throughout the state. PG&E fully supports and is participating actively in the OIR. We plan to submit a proposal detailing our recommendations, which will include our actions on taking PG&E’s pipeline safety to a new standard.

We will also continue to work with utility companies, industry and consumer groups, and state and federal regulators to create safer gas operations for California and across the United States.

The impact of the San Bruno accident continues to be felt in San Bruno and at PG&E. The information presented here on the accident and our ongoing response is in no way meant to minimize the magnitude of the tragedy. Instead, it is to provide stakeholders with an update on the lessons we’ve learned and the steps we've taken to ensure a tragedy like the one in San Bruno never happens again.

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