Compliance
2,000+
Number of training sessions held in 2012 to ensure employees meet the environmental compliance obligations of the business operations they perform
Just as operational excellence is the foundation for meeting our customer commitments, environmental compliance is the bedrock of PG&E’s 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.”
Our environmental policy and governance practices are designed to promote compliance with environmental requirements, as well as to provide a platform from which we can take our performance beyond the legal and regulatory baselines.
Environmental Management System
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.
To ensure we meet these requirements, Pacific Gas and Electric Company uses an Environmental Management System (EMS) modeled after the ISO 14001 environmental management standard and employs the widely adopted “Plan, Do, Check, Act” model for continuous improvement.
The Vice President of Environmental for Pacific Gas and Electric Company oversees PG&E’s commitment to meet—and strive to exceed—environmental compliance requirements. An Environmental Officer Steering Committee meets quarterly to provide oversight on environmental issues across the utility. Other technical forums serve as additional vehicles to discuss, prioritize and cross-check environmental issues across the business.
Compliance performance updates are reviewed monthly by PG&E’s officers. In addition, an annual environmental compliance summary is presented to the Public Policy Committee of the PG&E Corporation Board of Directors.
Planning
While we have not obtained ISO 14001 certifications for our facilities, we performed an independent third-party gap analysis relative to the ISO 14001 standard to create an EMS enhancement plan.
The plan incorporated a comprehensive review of our environmental aspects and impacts by each operational line of business. In 2012, we began working with the lines of business to develop specific environmental goals and objectives based on those results—ensuring that we have appropriate management plans in place for areas with the largest potential impacts to the environment. This process is overseen by the Environmental Officer Steering Committee.
Implementation and Operation
PG&E continues to make steady and continuous improvements to the safety and integrity of its gas transmission system. In 2012, PG&E hydrostatically tested more than 175 miles of pipeline through a process where pipe segments are taken out of service and isolated so that water can be pumped in and pressurized for extended periods. PG&E’s environmental team is engaged throughout the process to ensure appropriate handling and disposal of the water used in the testing and, more generally, to avoid and minimize environmental impacts.
PG&E employs a variety of operational controls so that actions to meet our 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.
In 2012, we completed a series of process improvements, including implementing a “one-stop shop” for managing environmental permitting and compliance requirements for gas, electric and energy supply construction projects. We are also implementing a new project management system that will allow all environmental permits and requirements to be centrally tracked.
We began to implement an automated environmental “screening” tool to better assess the potential environmental impacts and requirements for our work as part of the upfront planning process. Doing so enables a more consistent and streamlined approach to reviewing work.
We also completed the implementation of an Enterprise Compliance Tracking System to clarify roles and responsibilities for environmental tasks at the facility level. We have implemented the system at all facilities that support our gas and electric distribution lines of business and have seen a significant improvement in compliance at these facilities.
Training is a key element of a successful compliance program. During 2012, we held more than 2,000 training sessions to ensure employees meet the environmental compliance obligations of the business operations they perform. Training covered topics such as air quality, habitat and species protection, oil spill prevention and cleanup, and hazardous materials/waste management. Additionally, we required all employees to take a training course on our environmental policy, reinforcing every employee’s role in supporting PG&E’s goal of environmental leadership.
Reviews and Corrective Actions
A robust environmental auditing program is key to ensuring that we are effectively complying with the many environmental laws and regulations relating to our business. We review and audit environmental performance in three different ways—self-assessments, comprehensive reviews and internal audits:
- Self-Assessments: Environmental personnel perform self-assessments on facilities or projects under their oversight. An assessment evaluates a facility or project for compliance with environmental regulations.
- Comprehensive Reviews: These reviews are performed by personnel from the Environmental Department who are not responsible for compliance at the facility or project being inspected. A comprehensive review involves evaluating all environmental compliance obligations associated with a facility’s or project’s operations.
- Internal Audits: The Internal Audit department conducts systemic and programmatic controls-based audits to independently analyze the effectiveness of our 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 2012, we performed a combination of 1,734 self-assessments, comprehensive reviews and internal audits of various environmental processes, facilities and projects, an increase from 809 in 2011. The increase was largely driven by a rise in self-assessments, stemming from enhanced rigor around compliance management tracking.
We also continued to improve our corrective action process by performing root-cause analyses on non-compliance issues identified through environmental agency inspections, and tracking detailed corrective action plans to resolution.
Lean Six Sigma methodology is used to improve our programs—clearly defining, streamlining and documenting processes to improve compliance, consistency and effectiveness. For example, this approach was a driver for the Enterprise Compliance Tracking System described above.
Operational Performance
PG&E tracks and reports a wide range of annual environmental compliance performance indicators. This section details our performance results for 2012.
Reported Releases and Permit Exceedances
We reported a total of 182 releases in 2012, a decrease from 242 reported in 2011. A release is defined as an unintentional discharge of a regulated substance that exceeds a reporting threshold. We report releases that meet regulatory thresholds, as well as many smaller releases, in an effort to ensure operational transparency to local agencies. A large percentage of these releases involved small amounts of mineral oil used in transformers or other petroleum-based substances.
We reported six permit exceedances in 2012, compared to one in 2011. An exceedance is defined as a discharge in excess of what is allowed by a permit. The six exceedances involved an elevated level of zinc in a discharge to a sewer system from a power plant oily-water separator, an exceedance of a daily turbidity average at a hydroelectric construction project and four exceedances at drinking water source wells at a gas compressor station.
Agency Inspections
In 2012, a total of 632 agency inspections were conducted, including 472 facility and 160 field project inspections. The number of inspections decreased from 710 in 2011. The majority of these inspections were performed by Certified Unified Program Agencies, such as city and county environmental health departments and fire departments. The remaining inspections were performed by agencies such as air quality management districts, the California State Lands Commission and the CPUC.
Environmental Sanctions
Starting in 2012, we refined our compliance performance measures—moving to new metrics that will help drive further improvements across our business.
Specifically, we took steps to help sharpen our focus on enforcement actions that have environmental impacts. We now categorize all written sanctions issued by a regulatory agency as “Level 1” (those findings that resulted in an actual or potential impact to the environment) and “Level 2” (findings that did not result in an actual or potential impact to the environment).
Also starting in 2012, we changed the way we track and report the rate of compliance issues. In prior years, we tracked the number of notices of violation (NOVs) per 100 inspections by a regulatory agency. Now, we track the percentage of agency inspections that do not result in a written sanction.
The number of Level 1 sanctions received during 2012 was four, below our target of no more than six. Two sanctions involved air quality regulations and two involved water regulations. Our rate of inspections without a written sanction was 89 percent, just below our target of 90 percent.
2012 Enforcement Penalties and Settlements
In 2012, PG&E paid $3.6 million to resolve an alleged violation of a 2008 Clean Up and Abatement Order issued by the Lahantan Regional Water Quality Control Board regarding the chromium plume in Hinkley. The alleged violation was resolved by a settlement under which $1.8 million was paid to the state and the remaining $1.8 million was put toward a supplemental environmental project in the Hinkley area.
PG&E also paid a total of $170,360 in settlements and penalties stemming from nine environmental enforcement actions. This included a $150,000 settlement resulting from an alleged failure to notify the CPUC prior to construction of a project; of this amount, $50,000 was donated to the Endangered Species Recovery Program at Stanislaus State University.
| 2010 | 2011 | 2012 | |
|---|---|---|---|
| Notices of Violation (NOVs) | 8 | 10 | N/A1 |
| Level 1 Sanctions | N/A1 | N/A1 | 4 |
| Rate of NOVs (per 100 inspections) | 0.98 | 1.41 | N/A2 |
| Percentage of inspections without a written sanction | N/A2 | N/A2 | 89% |
| Releases/Exceedances | 247 | 243 | 188 |
| Penalties Paid | $39,882 | $32,378 | $3,770,360 |
| Agency Inspections | 819 | 710 | 632 |
| Audits Performed (System Audits and Comprehensive Facility Reviews) | 32 | 59 | 40 |
| Self-Assessments Performed | 684 | 750 | 1,6943 |
1 In 2012, PG&E began categorizing all written sanctions issued by a regulatory agency as “Level 1” (those findings that resulted in an actual or potential impact to the environment) and “Level 2” (findings that did not result in an actual or potential impact to the environment).
2 In prior years, PG&E tracked the number of NOVs per 100 inspections by a regulatory agency. In 2012, PG&E began reporting the percentage of inspections of its facilities and projects by a regulatory agency that do not result in a written sanction.
3 The number of self-assessments performed increased largely due to enhanced rigor around compliance management tracking.
