Safety and Enforcement Blog

CPUC Issues $50,000 Citation to PG&E for Failure to Maintain Safe Facilities

(Electric Safety and Reliability, Utility Enforcement) Permanent link

The CPUC has issued a Citation to PG&E for $50,000 for the utility’s failure to safely maintain its Metcalf Substation in San Jose.

On the night of August 26, 2014, and the early morning of August 27, 2014, PG&E’s Metcalf Substation was burglarized. The burglars breached the substation's fence in multiple places, and stole construction equipment from the substation operations yard and an adjacent construction staging yard. PG&E reported that approximately $40,000 in equipment was missing.  

 Despite multiple alarms sounding during the time of the break-in and theft, PG&E security personnel were not aware of the break-in. Not until later in the morning of August 27, 2014, did PG&E construction crews discover the break-in and theft. In April 2013, the Metcalf Substation was attacked by gunfire, which not only should have prompted PG&E to review their security measures, but also gave PG&E time to implement improved security.

 The CPUC’s investigation by its Safety and Enforcement Division (SED) found many gaps in PG&E’s security management, including lack of training for on-site personnel and security management. SED determined that PG&E was in violation of Public Utilities Code section 451, which requires that public utilities such as PG&E maintain "adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities," in order "to promote the safety, health, comfort, and convenience of its patrons, employees, and the public."

CPUC to Investigate PG&E’s Culture and Governance to Ensure Safety is a Priority

(Natural Gas Pipeline Safety, Electric Safety and Reliability, Utility Enforcement) Permanent link

The CPUC has opened a formal investigation into whether PG&E has corporate governance, clearly documented organizational goals and objectives, and work procedures that prioritize and improve safety.  “A public utility’s track record of safely operating its system is dependent on more than messages and slogans.  An effective safety culture is shaped by the governance, policies, budget, practices, and most of all, the accountability set by the top leadership,” said CPUC President Michael Picker.

The CPUC will accordingly evaluate PG&E’s and PG&E Corporation’s organizational culture, governance, policies, practices, and accountability metrics in relation to PG&E’s record of operations, including its record of safety incidents. The CPUC will analyze the methods Board of Directors and executive leadership use to hold themselves and management accountable for their decisions and actions, including executive compensation policies.

PG&E has invested in safety improvements, added new Board members with safety experience, and reorganized to prioritize gas operations safety.  But accidents and events affecting the safety of the general public, its customers, and others continue to occur on PG&E’s system, prompting the CPUC to take a deeper look into PG&E’s safety culture. 

“We need to get at the root of the problem and determine why PG&E keeps having safety related issues,” said CPUC President Picker.  “Performance is still uneven.  The safety and well-being of the public, ratepayers, its employees and contractors, the utility assets, and the environment should be every utility’s paramount priority.”

The CPUC’s Safety and Enforcement Division will retain the services of an independent expert consultant(s) with experience in auditing corporate governance and accountability to assist in the investigation and reporting, not to exceed $2 million. PG&E will reimburse the CPUC for the expert consultant services.  The CPUC will issue a public report on the findings, and propose remedies, if needed.

To monitor the proceeding, please subscribe to receive electronic copies of documents related to the proceeding.  Instructions for enrolling in the free subscription service are available on the CPUC’s website.