By Matt Nauman
The tragic gas-pipeline accident on Sept. 9, 2010, in San Bruno, was a watershed moment for PG&E.
That day, when eight people died and dozens of homes were destroyed, was a catalyst for change for the utility. Even as the investigations into the cause of the accident were taking place, PG&E began taking action to set about making sure a similar event never happened again.
This meant fundamental changes for PG&E, which has operated since 1905. Top executives have left the company. New leaders have arrived with new ideas. Preliminary findings from federal and state regulators as well as a blue-ribbon panel have been incorporated into the company’s operations.
“After the San Bruno tragedy, PG&E will never be the same company,” said PG&E President Chris Johns. “All of us remain deeply sorry about the terrible accident, but that is not enough. We are committed for the long term to helping the community rebuild, to learning from this experience, and to making the necessary changes in our culture and operating practices to operate the our pipeline system as safely as possible.”
This past year has been about soul-searching for the company. Critics have pointed to PG&E’s shortcomings, and the company not only acknowledged them but also pointed to other areas where improvements were needed.
In an interview with the San Jose Mercury News in June, Lee Cox, a long-time board member and the interim chairman and CEO of the PG&E Corporation, said, “What we’ve been doing since the day following the explosion is a complete overhaul and review of everything related to our gas system.”
In an interview with Currents, Cox put it simply: “PG&E is changing. We are working to make our operations safer and stronger.”
The company took some immediate measures to ensure the safety of its system. Over the past year, it made management and structural changes to its gas operations. It put together a comprehensive plan to modernize its gas system and operations; and worked to install a culture at PG&E that puts safety first.
Since the San Bruno tragedy, PG&E has operated with a sense of urgency to “make it right,” Johns said. It has operated based on three concepts:
- We accept responsibility.
- We admit our mistakes.
- It can never happen again.
As the National Transportation Safety Board prepares to release its findings on the cause of the San Bruno accident, and its recommendations for PG&E and the industry on Aug. 30, here is a look at some of what PG&E has done in the past year to improve its gas pipeline system and its safety.
Immediate steps to ensure system safety
- PG&E has reduced pressure on more than 1,600 miles of transmission pipelines
- The company is conducting water-pressure testing, also known as hydro-static testing, and/or replacing 152 miles of pipeline in 2011.
- Additionally, PG&E is using new in-line camera technology following water-pressure tests to inspect interior girth and longitudinal seam welds, and it is conducting metallurgical analysis when necessary.
- PG&E retrieved and scanned more than 1.7 million paper documents going back more than 50 years to substantiate current gas pressure levels, known as Maximum Allowable Operating Pressure (MAOP), in all high-consequence areas (HCAs).
- Notified all customers and municipalities of their proximity to gas pipelines.
- PG&E has increased coordination with first responders, contractors and infrastructure departments. Also, the company will create a more comprehensive emergency response plan and use it for training
- Conducted practice drills with first responders.
- To date, remedial actions taken since the San Bruno accident have been paid for by shareholders. Shareholders have spent $114 million so far
Management and structural changes
- Anthony F. Earley Jr., a long-time utility industry veteran and CEO of DTE Energy in Michigan, was hired as the new CEO, Chairman and President of PG&E Corporation. He starts on Sept. 13. Earley has significant accomplishments in achieving excellence in utility operations and safety.
- PG&E separated its gas and electric operations, creating a gas organization with the authority, resources and mandate to reform all gas operations.
- Nick Stavropoulos, a veteran gas turnaround specialist, became executive vice president of gas operations in June. He worked for three decades as a leader in gas companies in the Northeast and New England. He heads the new gas organization.
- Other organizational changes include replacing three of the five most senior managers in the gas organization with highly rated internal candidates; hiring a senior director of data integrity to improve records system completeness and accuracy; and hiring three experienced senior level gas engineers from outside PG&E for key assignments, including leaders for infrastructure upgrade and pipeline integrity management efforts.
- Also, the company has hired more than 90 new gas engineers as well as additional project managers, mappers and other employees in a major nationwide recruiting effort.
Comprehensive plan to modernize the gas system
Under the leadership of the California Public Utilities Commission, on Aug. 26, 2011, PG&E filed a Pipeline Safety Enhancement Plan. Pending regulatory approval, the plan will modernize the company’s gas transmission pipelines throughout its service territory. The plan has four key initiatives.
- Pipeline modernization. The goal is to assure every gas transmission pipeline operates at or below proven, tested and verified safe operating pressure. The plan will target pre-1970 pipe segments that have not been strength tested (including those previously exempted by federal regulations), replace segments that should be replaced, reduce pressure and retrofitting pipelines to allow state-of-the-art internal inspections, or “pigging”.
- Valve automation. The goal is to facilitate emergency response by isolating pipeline segments quickly in an emergency situation. PG&E will install more remote control valves and automatic shutoff valves. The company also will enhance the Supervisory Control and Data Acquisition (SCADA) system to identify and isolate sections of pipeline.
- Pipeline records integration. The goal is to reflect the NTSB’s recommendation for a new standard of “traceable, verifiable and complete” gas transmission records in an electronic format. The process will include the collection and verification of all pipeline strength tests and pipeline features data necessary to calculate the maximum allowable operating pressure (MAOP) of the pipeline and all associated components. PG&E will transition away from reliance on traditional paper records and consolidate data into integrated, core data management systems. The company will increase the capability of its digital mapping and software systems to integrate pipeline records moving forward.
- Interim safety enhancement measures. PG&E will take Immediate steps to enhance the safety prior to completing the work proposed within the plan through validating the MAOP for all transmission pipelines in the system, increasing patrols and leak surveys, and reducing gas pipeline pressure in certain areas.
Instituting a safety culture at PG&E
- PG&E will hire a Safety Vice President with “industry best practices” experience for new position that reports directly to Chris Johns.
- The company retained leading safety experts to help implement public and employee safety best practices.
- New public safety measurements were created based on benchmark data and industry best practices.
- Safety performance is now a significant component of the employee incentive plan and as a condition of future employment.
- Training programs, for both apprentices and journeymen, has been upgraded. Supervisor training has been improved, too, to emphasize safety.