Anita Acacio- Preventing Foreclosures

SACRAMENTO, Calif. — California lawmakers investigating a deadly pipeline explosion said Tuesday they may need to change state law to increase penalties when utilities ignore problems that lead to injuries or death.

During a legislative hearing, lawmakers criticized the state’s regulatory agency for not adequately overseeing decisions by Pacific Gas & Electric Co., the utility that owned the pipeline in the blast last month that killed eight in San Bruno.

The state’s largest utility had shifted money away from some high-risk repairs, including to the natural gas pipeline that exploded in the suburb south of San Francisco.

Lawmakers said they also want to increase state oversight of utilities’ decisions about which gas pipeline sections need urgent repairs or replacement.

“We have some systemic problems here,” said Sen. Mark Leno, D-San Francisco, chairman of the Senate Public Safety Committee. The hearing was held jointly with the Senate Energy, Utilities and Communications Committee.

Lawmakers criticized PG&E for repeatedly shifting priorities concerning the pipeline near San Bruno, including whether and when it would be replaced. They also blamed state regulators for not scrutinizing PG&E’s decisions.

Legislators were upset that state regulatory agencies do not track utilities’ changes in priorities for pipeline replacements or repairs, or even check to make sure the repairs are completed. Officials from the California Public Utilities Commission said they allow utilities to decide where to spend the money they receive from ratepayers.

“We kind of throw out money until some terrible tragedy occurs,” said Sen. Dean Florez, D-Shafter, noting that money for the repair had been approved by the commission, then put to another use by the utility. State regulators, he said, seem to “cross their fingers” and hope that utilities will spend the money where needed.

Sen. Rod Wright, D-Inglewood, said the Legislature should amend state law to require the commission to ensure that utilities follow through on repair or replacement projects approved by regulators.

Leno noted that the utility gave different assessments of the pipeline within a four-year span: It initially said the pipeline needed to be replaced, then said it did not, and finally said it posed an unacceptable risk if not replaced by 2013.

The conflicting decisions came after closer inspections of the pipeline, Kirk Johnson, PG&E’s vice president for gas operations, told the committee.

“Had we found anything wrong, we would have dealt with it immediately,” he said.

The National Transportation Safety Board, which is responsible for investigating the explosion, released its preliminary report last week that said a power failure briefly increased pressure in the pipe before it ruptured. A final report is months away.

Johnson said PG&E hasn’t decided whether it will seek to rebuild the gas line over the objections of the community. Kathy DeRenzi, one of three survivors who testified before the committees, is circulating a petition against rebuilding near the neighborhood where 37 homes were destroyed and another 18 were damaged.

Rebuilding the pipeline would be a tragic reminder of the disaster, she said.

The utility has begun offering property buyouts and rebuilding funds to residents whose homes were destroyed or badly damaged.

Richard Clark, director of the commission’s consumer protection and safety division, said it is the utilities’ responsibility to learn where hazards exist and make repairs. The PUC rarely punishes utilities because it doesn’t want to discourage employees from volunteering when mistakes are made.

Lawmakers said that system wasn’t working, given the San Bruno explosion and several others involving PG&E pipelines in recent years.

Sen. Alex Padilla, D-Los Angeles, chairman of the Senate Energy Committee, also questioned why the commission has just nine inspectors who can randomly check, at most, 1 percent of the state’s natural gas pipelines annually.

Clark could not say how that compares with inspections in other states.

Padilla said lawmakers will also consider requiring utilities to install valves in pipelines that would automatically shut off gas in emergencies.

The hearing came on the same day that five families affected by the San Bruno explosion filed separate lawsuits against the utility. Among those were Susan Bullis, whose husband, 17-year-old son and mother-in-law died in the Sept. 9 blast.

The lawsuits accused PG&E of negligently maintaining the pipeline, calling it “a ticking time bomb.” The company already faces at least two other lawsuits related to the disaster.

PG&E spokeswoman Katie Romans declined to comment until officials had a chance to review the lawsuits.