By Matt Nauman
SAN FRANCISCO – Reflecting on his first year as CEO, chairman and president of PG&E, Tony Earley said today (Aug. 30) that much progress has been made in becoming a company that’s focused on safety and reliability, but that work remains to be done.
“It’s been a challenging, but incredibly rewarding first year at PG&E,” said Earley, who joined the company in September of 2011 after three decades running utilities in Michigan and New York.
“We’re not where we need to be. We have a lot of work to do, but I can assure that we have made good progress over the last year,” he said. “And we look forward to making progress over the next couple of years.”
Earley met with reporters today at PG&E’s headquarters.
Before commenting on his first year at the helm of the utility that serves 15 million Californians, he paused to remember the victims of the San Bruno gas pipeline accident in September of 2010.
“That was a tragedy of huge proportions. There have been a lot of things we’ve been able to fix at the company, but one of things I can’t un-do is what happened there,” Earley said, but PG&E has continued to work to make sure that victims get fair compensation. Many lawsuits have been settled and the company reached an agreement with the city of San Bruno earlier this year, he said.
PG&E’s back-to-basics strategy
That tragedy was a catalyst for PG&E to look at itself. “The strategy that we implemented is pretty simple. It’s a back-to-basics strategy of providing safe, reliable and affordable gas and electric service to our customers. To put it another way, it’s an intense focus on operational excellence,” he said.
That strategy has included adding new leaders, including himself, separating the gas and electric departments and accelerating spending – an additional $250 million in 2012 and in 2013 – on improvements.
Earley pointed to progress in three areas: safety, reliability and affordability.
“We have now tried to put safety as the highest priority at the company. And it’s beyond the traditional safety of employees. It’s the safety of our customers, the safety of the public in both the gas and the electric business,” he said.
In its gas business, PG&E has strength-tested or validated the records of more than 250 miles of transmission pipeline. That will grow to 700 miles by the end of 2014. Maximum allowable operating pressures have been validated on more than 3,000 miles of pipeline. More than 3 million paper records have been scanned and are now being compiled into a single, digital database.
Among other improvements, PG&E also has partnered with emergency responders in numerous drills and training sessions.
In its electric operations, PG&E has escalated its replacement of overhead wires, underground cables and utility poles. It is striving to reduce the number of wire-down outages and has been installing locking, venting manhole covers.
PG&E also continues to work to make its gas and electric service more reliable and affordable.
In 2011, PG&E had some of its best results ever in terms of outage frequency and durations, and the company is on track to just as well, if not better, in 2012.
The company has proposed an economic development rate to keep and attract businesses to California. It also provides a variety of financial assistance programs to customers who need help with their bills.
Creating jobs in California
Moving forward, PG&E will be spending $5 billion a year on capital expenditures.
“It’s critical to maintaining a safe system and maintaining a reliable system,” Earley said. “It’s also critical to the economy of California.”
PG&E’s General Rate Case, which lays out the company’s plans for 2014 to 2016, will create or support about 30,000 jobs. And the company’s Pipeline Safety Enhancement Plan, which is designed to meet new standards set by the California Public Utilities Commission, also would result in more jobs.
These investments are crucial to positioning PG&E for the future, but even more so, they’re key to positioning California for success, Earley said.
Earley commented on the how the culture of PG&E is changing. Employees are bringing problems forward – “a positive sign,” he said. And, publicly, the company is now posting a public safety dashboard on its website. “One of the few companies” to do that, he said.
Email Matt Nauman at firstname.lastname@example.org.