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PG&E knew gas-line records posed a danger to public, engineer says in deposition

By Joshua Melvin, San Jose Mercury News –

REDWOOD CITY, Calif. — Pacific Gas & Electric knew its gas-line records were inaccurate and knew those errors could mean death or injury to the people who lived near its pipes yet chose not to fix the problem, according to testimony from a senior company engineer.

Senior Gas Engineer Todd Arnett, during a deposition on the hundreds of lawsuits stemming from the deadly 2010 San Bruno, Calif., pipeline blast, said he warned his supervisors that the company’s computer system for keeping track of the pipeline system was riddled with errors. But his bosses didn’t fix it; instead they told him to keep using it.

“I stated that concern, and they were aware of it,” Arnett said.

His testimony is the basis for just one of a series of allegations leveled by attorneys for the victims of the pipeline explosion in motions filed Tuesday in San Mateo County Superior Court. The 33-page memo contains a litany of points that attorneys say support their contention PG&E knew its gas system presented a real danger, yet did little to protect the public’s safety. Instead it sought ever fatter profits.

Among the points listed in the motion:

— Spending on safety programs was chopped from 2008-2010 and left the pipeline maintenance budget “25 percent below ‘recommended minimum level.’ ” Yet, over the same period, the total value of the company’s tradable stock and its shareholders’ equity nearly doubled, from $9.7 billion to $18.2 billion.

— PG&E received a 1987 warning from Bechtel Corp., the country’s largest engineering and construction firm, telling the utility it was missing pipeline records. Bechtel proposed digging up the sections in order to examine them, but “PG&E refused to spend the money.”

— Managers knew the line that blew up in San Bruno had never been subjected to high-pressure water tests, which could have found the defect that split open prior to the explosion. The head of the Gas Design System proposed performing the test, but it was never done.

— The amount of pipe to be replaced dropped from 165 miles to 25 miles as part of a change the utility made to its system of managing safety risks. The changes were projected to save $60 million over the life of the program.

These allegations are part of the victims’ fight against PG&E’s move to knock out the possibility it could have to pay hundreds of millions of dollars in punitive damages over the pipeline explosion that killed eight people and destroyed 38 homes. San Mateo County Superior Court Judge Steven Dylina is set to rule Sept. 4 on whether to throw out punitive damages.

While all of the wrongful death cases stemming from the blast have been resolved through confidential settlements, about 350 more cases could still go to trial in the fall.

In its papers asking Dylina to toss out punitive damages, PG&E argued the explosion was an accident. The company’s attorneys said the utility had detailed emergency plans and well-trained workers ready to deal with a rupture. Not even valves that would have automatically stemmed the flow of gas could have prevented the tragedy, the utility said.

The company will get a chance later this month to rebut the victims’ accusations.

“We will review the plaintiffs’ response carefully, and we will reply on Aug. 20 based on the schedule put forward by the court,” said PG&E spokeswoman Brittany Chord. “Since the tragic accident, our top priority has been assisting the victims.”

According to attorney Frank Pitre, who wrote the motion on behalf of all the plaintiffs, the utility handed out from 2000-2010 at least $281 million in pay to its executives, which is an estimate based on public information because the utility has refused to hand over the actual figures. A high-pressure water test, which could have detected problems on the one-third of a mile segment of line 132 that exploded, would have cost about $125,000, the plaintiffs say.

PG&E also violated federal pipeline safety laws because it didn’t keep historical records of its lines, the plaintiffs said. Federal regulations require all pipeline documents, especially those that prove safety testing has been done, be kept for the lifetime of the line. PG&E has said it has no records relating to testing, manufacturing or drawings that show details of the doomed line.

Federal prosecutors are investigating whether the utility will face criminal charges over the blast, including the company’s record-keeping practices.

“For over 50 years Pacific Gas & Electric played Russian roulette with the lives and homes of its unsuspecting San Bruno customers,” Pitre wrote. “Then one day in 2010, a live round was in the chamber, when PG&E pulled the trigger.”

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