ABSTRACT: Between October 2014 and June 2016 (as of the latest Check Register), City legal expenditures related to the natural gas explosion in Carmel-by-the-Sea, March, 2014, and, separately, a formal penalty consideration case against PG&E relating to recordkeeping associated with the utility’s gas distribution infrastructure (BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA, Investigation 14-11-008), amounted to a total of $440,396.45 to MEYERS/NAVE PROFESSIONAL LAW CORP., resulting in a $10,850,000 Citation assessed for the Carmel incident and total fines of $25,626,000 for the systemic violations and incidents, for a the total fine imposed on Pacific Gas and Electric Company for distribution system incidents of $36,476,000.
TIMELINE
MARCH 3, 2014 – AUGUST 18, 2016
MARCH 3, 2014: Carmel – March 3, 2014 A natural gas explosion destroyed a house located in the city of Carmel-by-the-Sea. Prior to the explosion, a PG&E welding crew was preparing to tie-in the gas distribution main along 3rd Avenue into the newly installed plastic main on Guadalupe Street. The crew welded a tapping tee onto a two-inch steel distribution main on 3rd Avenue, and did not know that the steel distribution main had an inserted and unmapped 1¼-inch plastic line, which was damaged by the welding and tapping process which caused the natural gas to escape the plastic main. Natural gas migrated into the residential structure and later resulted in an explosion.
OCTOBER 9, 2014 – NOVEMBER 18, 2014: CITY OF CARMEL-BY-THE-SEA LEGAL EXPENDITURES
Steven R. Myers Attorney MEYERS, NAVE, RIBACK, SILVER & WILSON 555 12TH STREET,
SUITE 1500 OAKLAND CA 94607
For: Carmel-by-the-Sea
Emilie E. De La Motte Attorney At Law MEYERS NAVE RIBACK SILVER & WILSON
Britt K. Strottman Attorney MEYERS, NAVE, RIBACK, SILVER & WILSON
129212 10/9/2014
MEYERS/NAVE PROFESSIONAL LAW CORP $918.75 PROFESSIONAL SERVICES-LEGAL
Vendor
Total-> $918.75
129431
11/18/2014 MEYERS/NAVE PROFESSIONAL LAW CORP $10,212.70 PROFESSIONAL
SERVICES-LEGAL
129431
11/18/2014 MEYERS/NAVE PROFESSIONAL LAW CORP $7,220.28 PROFESSIONAL
SERVICES-LEGAL
129431
11/18/2.014 MEYERS/NAVE PROFESSIONAL LAW CORP $4,450.00 PROFESSIONAL
SERVICES-LEGAL
129431
11/18/2014 MEYERS/NAVE PROFESSIONAL LAW CORP $1,870.00 PROFESSIONAL
SERVICES-LEGAL
Vendor
Total----> $23,752.98
TOTAL: Contract
Spend $24,671.73
NOVEMBER 20, 2014: CPUC ISSUES $10.85 MILLION STAFF CITATION TO PG&E; COMMISSIONERS OPEN FORMAL CASE TO EVALUATE PG&E’S GAS DISTRIBUTION RECORDKEEPING
Docket #: I.14-11-008
SAN FRANCISCO, November 20, 2014 - The California Public Utilities Commission (CPUC) today issued a $10.85 million staff Citation to Pacific Gas and Electric Company (PG&E) for a natural gas explosion in Carmel-by-the-Sea in March, and, separately, opened a formal penalty consideration case against PG&E relating to recordkeeping associated with the utility’s gas distribution infrastructure.
Citation Date: November 20, 2014
Citation#: ALJ-274 2014-11-001
$10,850,000.00: State Treasury to the credit of the General Fund
JANUARY 22, 2015-JUNE 30, 2016: CITY OF CARMEL-BY-THE-SEA LEGAL EXPENDITURES
Steven R. Myers Attorney MEYERS, NAVE, RIBACK, SILVER & WILSON 555 12TH STREET, SUITE 1500 OAKLAND CA 94607
For: Carmel-by-the-Sea
Emilie E. De La Motte Attorney At Law MEYERS NAVE RIBACK SILVER & WILSON
Britt K. Strottman Attorney MEYERS, NAVE, RIBACK, SILVER & WILSON
129847
1/22/2015 MEY04 (MEYERS/NAVE PROFESSIONAL LAW CORP) $24,360.64 professional
services- PG&E Incident $ 49,032.37
130324
3/19/2015 MEY04 (MEYERS/NAVE PROFESSIONAL LAW CORP) 1,188.44 Prof fees-PG&E
$ 50,220.81
130554 5/1/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 8,643.50 PG&E GAS EXPLOSION LEGAL/PROF
SERVICES
130554 5/1/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 11,115.00 PG&E GAS EXPLOSION LEGAL/PROF
SERVICES
130554 5/1/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 16,683.19 PG&E GAS EXPLOSION LEGAL/PROF
SERVICES
130554 5/1/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 499.25 PG&E GAS EXPLOSION LEGAL/PROF
SERVICES
130679 5/29/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 16,259.38 PG&E GAS EXPLOSION LEGAL/PROF
SERVICES $ 103,421.13
Vendor
Total -----> 53,200.32
130853 6/26/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 12,706.75 PROF FEES:PG&E GAS EXPLOSION
116,127.88
Vendor
Total -----> 12,706.75
131156 8/20/2015
MEYERS/NAVE PROFESSIONAL LAW CORP 2,178.75 FY 15-16 PROF FEES RELATING TO PGE
GAS EXPLOS 6/14
131213
8/27/2015 MEYERS/NAVE PROFESSIONAL LAW CORP 33,768.43 FY 15-16 PROF FEES
RELATING TO PGE EXPLOSION 3/14 152,075.06
Vendor
Total -----> 35,947.18
131505 10/2/
2015 MEYERS/NAVE PROFESSIONAL LAW CORP 17,654.65 PROF LEGAL SERVICES. PG&E
MATTER 3/3/14 AUG BILL
Vendor
Total-----> 17,654.65
131815 11/24/2015 MEYERS/NAVE PROFESSIONAL LAW CORP 8,765.00 PG&E EXPLOSION PROF SERVICES
131815 11/24/ 2015 MEYERS/NAVE PROFESSIONAL LAW CORP 787.75 PG&E EXPLOSION 3/3/14 PROF SERVICES
131815 11/24/2015 MEYERS/NAVE PROFESSIONAL LAW CORP 41,951.44 PG&E EXPLOSION PROF SERVICES 221.233.90
Vendor Total-> 51,504.19
132052
12/29/2015 MEYERS/NAVE PROFESSIONAL LAW CORP 15,643.95 PG&E EXPLOSION
MARCH2014 NOVEMBER PROF SERVICES 236,877.85
Vendor
Total--·> 15,643.95
132230 1/27/2016
MEYERS/NAVE PROFESSIONAL LAW CORP 22,612.40 PG&E GAS EXPLOSION PROF
SERVICES FOR DEC2015 259.490.35
Vendor Total - -
> 22,612.40
132915 5/11/2016
MEYERS/NAVE PROFESSIONAL LAW CORP 121,031.60 PG&E 2014 EXPLOSION-PROF SERVICES
FOR JAN 2016
132!H5 5/11/2016
MEYERS/NAVE PROFESSIONAL LAW CORP 38,999.77 PG&E 2014 EXPLOSION-PROF SERVICES
FOR FEB 2016
131915 5/11/1016
M£YERS/NAV£ PROFESSIONAL LAW CORP 15,918.00 PG&E 2014 EXPLOSION-PROF
SERVICES FOR MARCH 2016
Vendor
Total -> 177,949.37
JUNE 1, 2016: PRESIDING OFFICER’S DECISION
Total fines of $24,310,000 are assessed for the systemic violations and incidents found in today’s decision. With the Citation previously assessed for the Carmel incident, the total fine imposed on Pacific Gas and Electric Company for distribution system incidents is $35,160,000.
133222 6/30/2016
MEYERS/NAVE PROFESSIONAL LAW CORP 2,596.73 APRIL 2016 PROF SERVICES RE: PGE
2014 EXPLOSION
133222 6/30/2016
MEYERS/NAVE PROFESSIONAL LAW CORP 360.00 PROF SERVICES MAY 2016 RE: PGE 2014
EXPLOSION
Vendor
Total----> 2,956.73
TOTAL: $415,724.72
AUGUST 18, 2016: MODIFIED PRESIDING OFFICER’S DECISION REGARDING INVESTIGATION OF PACIFIC GAS AND ELECTRIC COMPANY’S GAS DISTRIBUTION FACILITIES RECORDS
Total fines of $25,626,000 are assessed for the systemic violations and incidents found in today‘s decision. With the Citation previously assessed for the Carmel incident, the total fine imposed on Pacific Gas and Electric Company for distribution system incidents is $36,476,000.
EXCERPTS;
Appeal
of the Presiding Officer’s Decision
SED
and the City of Carmel-by-the-Sea filed appeals of the Presiding Officer‘s
Decision on July 1, 2016. PG&E filed its response to both appeals on July
18, 2016. The grounds on which each party contended that the Presiding Officer
Decision was unlawful or erroneous are analyzed below. Where noted in today‘s
decision, the Presiding Officer‘s Decision has been revised in response to the
appeals. In all other respects, the appeals are denied.
In
today‘s decision, we add the omitted $50,000 Carmel fine to the total fine and
revise the De Anza missing records per-day fine from $834.95 to $1,000 per day.
The additional De Anza amount of $1,266,000 plus $50,000 brings the total fine
to $25,626,000, as compared to the total fine of $24,310,000 in the Presiding
Officer‘s decision.
5.1.
Corrected Sum of Fine Assessed
SED47 contends and PG&E48 agrees that the sum of fines
assessed on page 55 of the Presiding Officer‘s Decision incorrectly omits the
$50,000 fine for PG&E‘s service failures to City of Carmel-by-the-Sea. This
error has been corrected in today‘s decision.
5.2.
Total Fine Amount and Carmel Incident
SED
argued that the Presiding Officer Decision erred in setting the fine too low
and that the fine for the Carmel incident should be increased by $20.73
million. As set forth above, the
Commission had previously upheld a citation of $10.85 million for that incident
and SED did not dispute the Presiding Officer‘s Decision holding that an
additional fine of $10.8 million should be assessed against PG&E for
failing to prevent recurrences of leaks caused by unmapped plastic inserts (the
cause of the Carmel explosion).
SED argued the Proposed Decision erred in adopting a fine of
only $21.65 million and an additional fine of $20.73 million should be imposed.
PG&E stated that a total fine of $42.38 million would be “disproportionate
to the harm that resulted” and “unprecedented.”
SED
cited to no Commission precedent with a fine of this magnitude for similar
violations nor aggravating circumstances that would justify such a departure
from Commission precedent. SED has shown no error or unlawful determination in
the Presiding Officer‘s Decision.
5.5.
Per Incident Fines and Additional Incidents
SED
argued that the maximum fine for each incident should be imposed and that
additional incidents should be included. PG&E responded in opposition that the Commission
has discretion to tailor the fines to specific facts of each violation and that
additional incidents are not within the scope of this proceeding.
The
City of Carmel-by-the-Sea also contended that the Commission was without
discretion to decide, based on the specific facts of each violation, whether to
apply Public Utilities Code § 2108 to uncorrected violations.
In
its Appeal, SED acknowledged that the Commission has the discretion to decline
to impose daily fines pursuant to § 2108.55 PG&E agreed with SED and cited
to D.15-04-024.56
We
find that the additional incidents were outside the scope of this proceeding
and that the Commission has substantial discretion to tabulate and impose fines
based on the specific facts of each violation. SED and the City of
Carmel-by-the-Sea have demonstrated no error in the Presiding Officer‘s
Decision.
5.6.
City of Carmel-by-the-Sea’s Other Requests
The
City requested reimbursement from PG&E for its expenses. The Commission‘s
policy choice to decline to use its equitable powers to order PG&E to
reimburse governmental entities for their litigation costs was set forth in
D.15-04-024 at 168-170. The City has presented no reason to depart from that
policy choice.
The City also recommended linking executive compensation to
safety performance; a similar proposal was also examined and found duplicative
or unsupported in D.15-04-024 at 167. Finally, the City of Carmel-by-the-Sea
sought appointment of an independent monitor. That proposal was also considered
in D.15-04-024 at 155– 60, where the Commission authorized another $30 million
in reimbursement for experts for SED in addition to the $15 million awarded in Rulemaking
11-02-019, and otherwise denied the requested independent monitor.
Finally,
the parties agree that the fines ordered in today‘s decision may not be
included in regulated revenue requirement nor recovery sought from ratepayers
in any manner.
The
City of Carmel-by-the-Sea brought the unique perspectives of local government
and first responders to this proceeding. The efforts of the City to bring forth
these perspectives added greatly to the development of a complete evidentiary
record and assisted the Commission in discharging its duties.
REFERENCE:
Decision on Fines and Remedies to Be Imposed
04-09-15
Date of Issuance April 9, 2015
DECISION ON FINES AND REMEDIES TO BE IMPOSED ON PACIFIC GAS AND ELECTRIC COMPANY FOR SPECIFIC VIOLATIONS IN CONNECTION WITH THE OPERATION AND PRACTICES OF ITS NATURAL GAS TRANSMISSION SYSTEM PIPELINES