The chairman of PG&E Corp. announced in San Francisco Wednesday he has instructed a board committee to investigate a state commissioner's charge that utility managers engaged in "deliberate dishonesty" in correcting records on a natural gas pipeline in San Carlos.
Board Chairman Tony Earley, who is also the corporation's chief executive officer, said the probe will be conducted by the board of directors' six-member audit committee, whose authority includes reviewing business ethics matters.
The allegation was made Monday in a proposed decision issued by California Public Utilities Commission member Mark Ferron.
In the document, Ferron proposed fining PG&E Co. $17.25 million for a late and misleading correction in information about welds in segments of Line 147, a 3.8-mile natural gas pipeline in San Carlos. The information affected the amount of pressure allowed in the line.
Ferron wrote, "We simply cannot allow such deliberate and calculated dishonesty."
He also alleged in separate comments that senior PG&E managers engaged in "a clear attempt to conceal or obfuscate the facts on important matters involving the public's trust."
"These are very disturbing statements. We take the concerns that Commissioner Ferron has expressed seriously," Earley said in Wednesday's announcement.
Earley said he has asked the committee to conduct its review "expeditiously such that we can report back to the commission, employees and the public with confidence that the assertions have been thoroughly reviewed and that appropriate actions, if merited, have been taken."
Ferron's proposal and a different proposal by Administrative Law Judge Maribeth Bushey for a lesser fine of $6.75 million will both go before the full commission, probably at its Dec. 5 meeting in San Francisco, for a final decision on whether and how much to fine PG&E.
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San Francisco-based PG&E Corp. is the parent company of PG&E Co., a natural gas and electricity utility operating in Northern and Central California.
Both Ferron's and Bushey's proposed decisions fault the utility for waiting until July 3 to correct inaccurate information it began learning about last fall, and then labeling the corrections "errata," a term usually used for minor mistakes such as typographical errors.
PG&E originally told the commission in 2011 that four segments of Line 147 were either seamless or had strong double-arc welds and on the basis of that information won approval to operate the line at a pressure of 365 pounds per square inch.
After investigating a small leak in October 2012, PG&E employees began learning that the segments were not seamless and had weaker single-arc welds requiring a lower pressure.
Ferron wrote in his proposed decision that senior PG&E managers knew by November 2012 that there was a problem with the pipeline records, but "chose to wait several months to correct information that they knew to be false and that they knew the commission relied on."
The use of the errata procedure for the correction was aimed at misleading the commission and the public about the importance of the information, Ferron and Bushey asserted.
Although the utility did not submit a publicly filed correction to the commission until July, it lowered the pressure in the pipeline before that and informed the commission staff of data discrepancies in a phone call in March, according to commission filings.
