In Months Before Deadly 2010 Explosion, Pipeline Safey Money Went To PG&E Executive Bonuses

[hatrack]

Money collected from ratepayers and earmarked for pipeline safety was instead spent on executive pay raises by the state's largest utility, Pacific Gas & Electric Co., in the months before a deadly pipeline explosion in 2010, lawmakers were told Wednesday.

“In some cases, the utility did divert dollars we approved for safety purposes for executive compensation,” the new president of the Public Utilities Commission complained to members of the state Senate Energy, Utilities and Communications Committee at an oversight hearing.

After the two-hour hearing, Michael Picker told The Times that he's gathering additional documentation that PG&E put off safety and maintenance work to boost its profits and provide top executives with bonuses. “This is one of my outstanding beefs,” he said. The issue of the bonuses first was raised in a January 2012 independent audit for the PUC and an accompanying commission staff report.

But Picker's testimony “was the first time that I ever heard a PUC official admit that or state that as a fact,” said state Sen. Jerry Hill (D-San Mateo). Hill represents the Bay Area community of San Bruno, where the PG&E pipeline blast killed eight people, injured 66 others and destroyed 38 homes. Records released a few days after the explosion showed that PG&E received approval in 2007 to spend $5 million of ratepayer money to replace a high-risk section of the 30-inch pipeline north of the San Bruno blast site. The work on the 1950s-era pipe was never performed. And in 2010, the utility asked for another $5 million to do the same job, according to PG&E documents submitted to the PUC.

EDIT

http://www.latimes.com/business/la-fi-puc-hearing-20150325-story.html

[NYC_SKP]

1. More accurately, bonuses were paid while improvements were delayed.

The Times article is misleading and deliberately provocative in suggesting that actual funds set aside for repairs were shuffled over to pay for bonuses.

To be sure, it was a bad idea to pay bonuses while improvements needed to be made, but anyone with a working knowledge of how the CPUC, utilities, local government and other agencies are as slow as hell in getting things done will roll their eyes at this accusation.

Oh well, evil utilities companies.

[riversedge]

2. People DIED. I hope the folks responsible are prosecuted. This is

NOT an 'oh well" as you say. Are you being sarcastic and I am not catching it??

[NYC_SKP]

3. There. You make my point. Laypeople have no idea how things work.

People die in cars and trains yet Ford and Amtrak are rarely sued.

In this state, utility companies are not allowed to unilaterally decide to go and dig up pipelines and replace them.

All the agencies need to be involved, and if you want to sue everybody then you better include building departments and the CPUC.

Anger and knee-jerk reactions thrive in environments absent of knowledge of facts.

[riversedge]

4. Well I am glad CA has a PUC that is investigating these

shenanigans. It means they are at least doing their job and I hope the families of the dead find peace.

[NYC_SKP]

5. They are. It's a tricky mess given the age of the infrastructure.

And utilities have to make applications to do work, wait for them to be approved, and because some are investor owned they need permission to raise rates, even .0001 pennies, to pay for such things.

It's a weird hybrid between private ownership, public oversight, and profitable enterprise.

A wholly publicly owned utility model would probably be a little better about these things but there would still be breakdowns in the system.

I'm not a fan of the bonuses, at least they pay their workers well.

[raven mad]

6. Delay infrastructure to line your pockets? Sure.

What are your grandkids going to spend the leftovers on? There won't be anything worth it left.