PUC Raises New Questions About PG&E's ‘Safety Culture'

Citing “uneven” safety progress since the 2010 San Bruno blast, a top state regulator on Monday issued a veiled threat to cut PG&E’s guaranteed profit level unless there’s more improvement.

“Current safety culture efforts are disjointed and not part of a comprehensive, company-wide health and safety plan,” according to a consultant’s assessment of PG&E’s safety efforts issued Monday.

In light of the latest findings, state Public Utilities Commission’s president Michael Picker concluded that the company still “falls short” and lacks a “consistent, robust, and accountable’’ safety program.

Picker took pains not to say the commission must consider “all necessary measures,” even possibly cutting PG&E guaranteed profit level – to assure better progress.

PG&E issued a statement late Monday saying the company will look at the report’s findings to help bolster its efforts to become “the safest and most reliable energy company in America.”

The company now measures itself against “some of the safest companies in the world,” and has “achieved world-class safety certifications and recognition for our continued progress.”

“At the same time, we believe that we can and must continue to get better every day.

“We're committed to learning everything we can to keep our customers, their families and the communities we serve safe. We’re confident the report will contain additional recommendations of value and we look forward to reviewing them in depth.”

The commission launched its evaluation of PG&E safety two years ago, after Picker expressed frustration about the pace of change even after a $1.6 billion penalty in the Sept. 9 2010 explosion that claimed eight lives.

“The persistence of safety incidents motivates us to undertake this investigation to determine whether this persistence is rooted in PG&E’s organizational culture and governance and PG&E Corp.’s role in PG&E’s safety culture,” the commission said at the time.

The commission’s consultant, NorthStar Consulting Group, Inc., reiterated PG&E’s “failures to develop a thoroughgoing safety program.”

In light of that, Picker asked Monday: “Specifically, should some portion of return on equity for PG&E be dependent on making progress as defined by the Commission in this proceeding?”

NorthStar made 900 requests for data and doing 250 interviews, many of them in the field. In its findings, NorthStar said PG&E’s efforts have been “somewhat reactionary” lacked a comprehensive focus. Gas has gotten the most attention, with lagging progress on the electrical side, the consultants found.

Their report found there was a “cultural divide” between managers and field personnel, noting that “in many respects it is business as usual in the field, or the field locations are working to address safety issues on their own.”

PG&E suffers from a lack of safety trained managers, high management turnover. Some managers lack “a comprehensive understanding of the issues and credentials.”

“NorthStar believes PG&E felt considerable pressure to improve performance following San Bruno and launched a number of initiatives aimed at improving safety without sufficient consideration of the potential impact on the workforce or its ability to determine the effectiveness of individual campaigns,” the consultants concluded.

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