Dive Brief:
- The California Public Utilities Commission (CPUC) has proposed a full investigation into Pacific Gas & Electric's (PG&E) culture and practices in the wake of the San Bruno gas pipeline explosion in 2010, Bay Area News reports.
- The CPUC intends to conduct a "deeper review" into PG&E than previous investigations. The investigation will focus on "systemic issues" with the utility's "organizational culture, governance, policies, practices and accountability."
- The CPUC will vote on the proposal as soon as August 27.
Dive Insight:
Five years after the fatal pipeline explosion in San Bruno, PG&E still has not fully recovered from the damage. PG&E was hit with a record fine of $1.6 billion this year for the explosion, while it is also facing a criminal trial. (The utility has pled not guilty; the trial is expected to start spring 2016.) Now, the CPUC's proposed investigation is merely the latest development in this ongoing story. The investigation would almost certainly extend the storyline for the foreseeable future.
A deep and thorough investigation of the utility's practices would inevitably spark a wider discussion about how to reform PG&E. CPUC President Michael Picker first raised the possibility of breaking up PG&E at a commission meeting in the spring. "Is the organization simply too large to succeed at safety?" he asked.
"PG&E's size, and its combination of gas and electricity, has never been examined critically," Scott Hempling, a well-known utility regulatory scholar and Georgetown Law professor, told Bay Area News. "And for any utility, perhaps the most significant potential root cause of subpar performance is a culture of entitlement, arising from the fact that the utility does not have to compete to maintain its monopoly."
Although it is not clear whether the PUC has the authority to "break up" PG&E, Hempling said it's either them -- or the state legislature. "[The] monopoly that PG&E has was not granted by God," he said. "It's not in the U.S. Constitution. It is granted either by the PUC or the state Legislature."
PG&E, for its part, said it looks forward to a "constructive dialogue" with regulators. The utility's spokesman Nick Stimmel said PG&E plans to share "our commitment to safety and the concrete actions we have taken over the last several years to back it up," citing a number of upgrades and repairs it has made to its gas system.