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Schwarzenegger requests disaster assistance after pipeline fire

From Dan Simon, CNN
  • A disaster declaration frees federal funds to pick up some of the tab
  • Pacific Gas & Electric got $5 million to replace pipeline in 2009
  • PG&E says it's "committed" to "the safety of its gas transmission system"
  • Watchdog group says PG&E spent $5 million in bonuses in 2009

(CNN) -- Gov. Arnold Schwarzenegger asked the White House to make a federal disaster declaration in the aftermath of last week's pipeline explosion and fire in San Bruno, California, his office said Wednesday.

"This event has destroyed and caused serious damages to homes, infrastructure, and other public facilities in San Mateo County," Schwarzenegger said in a letter to President Obama. "The response and recovery costs for this event are estimated at nearly $10.4 million."

A disaster declaration from the White House would free federal funds to cover those costs.

The request came as a consumer watchdog group said pipeline owner Pacific Gas & Electric had planned in 2009 to replace a section of its gas pipeline just a couple of miles from the section that exploded, but never spent the $5 million in rate increases to do the work.

TURN [The Utility Reform Network] also said the utility asked for another $5 million for the same project in 2009 -- the year it should have completed the work it hasn't even started -- saying it wouldn't be completed until 2013.

"The money was spent on what they call higher priority work," said TURN senior attorney Mike Florio.

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"You can't track the dollars one by one, but we do know they spent $62 million more on management incentive business than they had forecast in 2009," he said. "They spent $60 million on going back and re-doing gas leak surveys that they had botched elsewhere on their system."

PG&E responded that it "is committed to performing the work necessary to assure the safety of its gas transmission system."

The utility said it had identified the line section as a "high priority project" in the earlier transmission rate filing, but "rescheduled the project" after an updated assessment in 2009. But the company did not explain why it needed an additional $5 million and three years to complete repairs on a section it said, in its most recent rate filing, was in the top 100 risks for failure.

"Coupled with the consequences of failure of this section of pipeline, the likelihood of a failure makes the risk of a failure at this location unacceptably high," the company said in that filing.

TURN officials think they know where some of the money went -- in 2009, the year PG&E didn't spend $5 million on fixing the pipeline, the company did spend $5 million on bonuses for six top executives.

"The company's priorities appear to be skewed," TURN executive director Mark Toney said.

The line that exploded in San Bruno was laid down in 1948, as was the section PG&E was supposed to replace. In the first filing, the utility noted that the "vintage 30-inch pipeline" runs through "several High Consequence Areas." In the second, it said the pipeline was "located in a heavily urbanized area."

Four people were killed in the September 9 explosion and fire in the San Francisco suburb, and three are still missing. The blast blew in the doors of a grocery store a quarter-mile (400 meters) away, and the explosion and resulting fire injured 52 people and destroyed 37 homes. The explosion blew a 28-foot section of the pipeline 100 feet in the air.

In the filing documents provided by TURN, the section of pipe to be replaced is identified as in the top 100 for highest risks of failure. Since exact locations of pipelines are generally kept secret because of terrorism threats, residents may not even know they live near one until it's too late.

"If they fixed that section that they said wanted to fix maybe they would have found something that led them to look a mile or two south of there," Florio said. "We don't know that. We do know that the project was slated for 2009. It didn't get done. Now they're proposing to do it again in 2013."

The California Public Utilities Commission has not made a decision on this latest increase request.

PG&E has agreed to set up a $100 million fund to help rebuild parts of San Bruno.

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