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PG&E customers may bear brunt of improvement costs after San Bruno blast

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PG&E customers might face a rate  increase to offset some of the costs of safety measures the utility company will launch in response to criticisms it faced about the causes of and response to the deadly San Bruno explosion.

PG&E’s upper management was grilled by federal officials for three days this week on pipe maintenance, valve technology and public awareness campaigns during an examination of the pipeline explosion that left eight dead in September. On Thursday, the final day of the hearing in Washington, D.C., PG&E announced measures to increase customer awareness of pipelines after announcing earlier this week it would begin an expensive change to gas line valve technology.  

The utility faced heavy criticism and harsh questioning the first day of hearings over the lack of automatic or remote valve shut-off of the flow of gas. Officials admitted during the hearing that it took more than 90 minutes to stop the flow of gas, which fed an explosive fire that destroyed 38 homes and damaged dozens more in addition to the deaths.

PG&E spokesman Brian Swanson said stockholders will pay for the majority of the costly efforts, but did not rule out the possibility of rate increases. He said the company will spend $10 million in new technology and development this year.

Some of this money will be spent on examining or replacing aging pipes that are more than  half of the PG&E system — the main topic of the final day of the hearing, underscoring the nationwide problem of how to test underground systems.

Replacement of pipes and valve technology is a clear but costly option that varies by situation. Replacing a single valve can cost anywhere from $100,000 to more than $1 million. American Gas Association Vice President Christina Sames would not comment on how easy pipe and valve replacement is in California, but said Oregon, Georgia, Ohio, Kentucky and Virginia allow simple replacement.

Sending a sensor into the pipe for  line inspection was an option that was discussed, but it is manageable in fewer than half the pipes. PG&E could restructure the pipes to make the new technology work, but that is costly and does not guarantee the pipes will not have to be replaced after the inspection.

NTSB Chairwoman Deborah Hersman said there is no “silver bullet” on how the industry should handle the problem of pipe inspection and technology upgrades.

PG&E officials said all customers within 2,000 feet of a transmission line will receive a mailing separate from their bill with location and safety information.

“This is exactly the type of progress we can hope for in a public hearing like this,” Hersman said at a news conference.