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CPUC to Hire Independent Panel for PG&E Audit

The California Public Utilities Commission unanimously voted Thursday to launch a formal audit, investigating the corporate culture of PG&E.

The investigation could ultimately lead regulators to break up the massive utility. The PUC's new president will now hire an independent panel of experts to review every aspect of how PG&E operates.

"We need to get to the root of the problem and determine why PG&E keeps having safety-related issues," PUC President Michael Picker said.

Investigators blame a deadly gas explosion that rocked a San Bruno neighborhood in 2010 on shoddy maintenance, flawed record keeping and the PUC's lax oversight over PG&E.

San Bruno residents are in favor of the independent audit.

"We think it's high time for this investigation because it's abundantly clear the problems have not been fixed," San Bruno City Manager Connie Jackson said.

Five years after the San Bruno explosion killed eight people and set a neighborhood on fire, a spokesman for the PG&E said about Thursday's decision "we look forward to a constructive dialogue with the commission and staff. We've made incredible progress toward our goal of becoming the safest and most reliable energy provider in America."

But some think it could lead to the break up of PG&E into smaller companies.

"I find them to be a monopoly and if we had an option, that might be something to look into," San Bruno-resident Jennifer Blanco said.

Picker said it is too soon to consider the odds of a PG&E breakup, but if so it would be in the name of safety as the top priority.

The audit of maintenance records and how budgets are set could start next spring and take a year. Cost will be between $1 million to $2 million.

In his first in-depth television interview, Picker strongly hinted at action against PG&E.

"I think we need to understand [PG&E] better and I think we need to hold them accountable," Picker said to NBC Bay Area Chief Investigative Reporter Tony Kovaleski. "And if we find they are unable to perform, then we’ll have to figure out what we can legally do. Nobody knows what it would take to revoke PG&E’s franchises.”

The threat came after years of safety and security failures by PG&E. In an NBC Bay Area Investigation into the attack on San Jose's Metcalf electric substation, PG&E's Director of Corporate Security said there was "high level of security" for the grid's most critical facilities. Just 12 days later, Director Stephanie Douglas wrote to the utility's top corporate executives that "in reality, PG&E is years away from a healthy and robust physical security posture."

Stephanie Douglas, PG&E's director of safety, recently announced her resignation from the utility. As pressure from the CPUC increases, PG&E continues to point to what it calls major upgrades in security while promising to work for even greater change.
 

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