Archive for June 2015

CCA Digest CALIFORNIA Roundup, June 2015

A Message from LEAN’s Executive DirectorHappy Summer Everyone!

We continue to monitor and support City and County investigations of CCA programs which are moving forward all over the state. Some of the big issues right now are management models, sources of upfront financing, and some regulatory nit picks that are, as always, hard to explain but could be important to CCA sustainability. See below for more information on happenings at the CPUC.

 

The CCA conference in Los Angeles sponsored by LEAN Energy and the Local Government Commission on May 18 was a huge success!  Dozens of California communities were represented and we all got a lot of good information and ideas about CCA opportunities and risks. We hope to plan something similar in northern CA so stay tuned for later this fall.

Thanks to those of you who were able to join us for the June 12 LEAN Energy market call!  This digest summarizes the topics from that call plus a few other announcements. If you are a LEAN member or considering membership, please join us for our next market call on Friday, July 10th.  Please see webinar link on the right to register.

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Highlights of CCA Program Developments in California

 

 

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Key Issues, Opportunities and Challenges

 

CCA Management Models

An increasingly prominent part of the CCA discussion these days is how CCA programs should be managed and by whom. A central part of the conversation focuses on proposals by California Clean Power (CCP), which has been meeting with elected officials in many jurisdictions. In the proposals that have been public, CCP agrees to manage all aspects of the program, assume market risk and provide fixed payments in trade for all program revenues. These terms are appealing to some jurisdictions, especially those that do not have expertise or easy access to capital.

 

LEAN Energy and others have urged local officials to make sure they get good analysis before they make any decisions to assure program sustainability and head off misunderstandings about risks, costs and relative responsibilities of this new, fully outsourced model. The County of San Mateo recently commissioned an analyses of the model as part of their technical study; the analysis points out both benefits and potential risks of the model. In addition, students at Stanford University recently studied the issue, using the city of Los Altos as a test subject.  The presentation slides provide an overview of their presentation.

 

California iBank

Many communities in California find it difficult to handle the start-up costs of CCA implementation, even though these costs are recoverable soon after program launch. LEAN has re-engaged the California Infrastructure Bank and help may be on the way!

The California Infrastructure and Economic Development Bank (iBank), a state agency, is eager to work with local communities–especially those with struggling economies–to determine whether they qualify for subsidized loans or credit guarantees for CCA  start-up costs.

This is great news for municipalities concerned about financing. Contact Kim Malcolm at LEAN Energy for more information.

Wastewater Utility Finding

A California Appellate Court has just found that a city’s wastewater utility payments to the city for shared infrastructure and employee time was not an improper transfer of funds and did not violate Proposition 218. This has implications for CCAs that may share infrastructure with cities or counties (such as the model underway in Lancaster, CA), or purchase goods and services from them. Read more here.

 

San Francisco CCA Referendum

The IBEW Local 1245 is sponsoring legislation in San Francisco that would prohibit CCAs from referring to any energy resources as “green” unless they are “Bucket 1” renewables products or power from the City’s Hetch Hetchy hydro-electric project. The initiative has until July 6th to garner enough signatures for the ballot.

 

The IBEW’s press release states a concern over the proposed contract with Shell Energy North America (SENA) and the use of unbundled RECs to improve the green attributes of portfolios.  Unsurprisingly, the measure does not require similar disclosures by Pacific Gas and Electric Company, although PG&E also purchases RECs and energy supplies from SENA. Because of historic purchases, PG&E is also able to classify some of its unbundled RECs as satisfying “Bucket 1” resource requirements, when by today’s standards they would be “Bucket 3.”

 

Some are predicting this local initiative is a warm-up for a statewide ballot measure.

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Regulatory and Legislative Happenings

 

At the CPUC… LEAN Energy, along with CCAs from Marin, Sonoma and Lancaster met in recent weeks with CPUC Commissioners Michael Picker, Liane Randolph and Michael Florio; the meetings with Commissioners Peterman and Sandoval are upcoming. We provided an overview of CCA activity around the state with a message that CCA is no longer a “local experiment” but a valuable — and so far very successful -tool for local governments to meet Climate Action Plan goals without subsidies from local taxes, all of which serve the Governor’s energy policy objectives. A similar meeting with key staff at the Governors Office was also productive in sharing that message and yielded several good ideas and follow up opportunities. We plan to meet with other public officials in the coming month with this important message.

 

Things move slowly at the CPUC but here are some updates:

  • Carlsbad Power Purchase Agreement — The CPUC approved SDG&E’s PPA for power from a new gas-fired plant to be built in the San Diego area. It is unclear how this decision may affect the prospects for CCA competitiveness, although many local groups, including the ALJ, argued that the plant is not needed and that the utility should solicit renewable resources instead.
  • PCIA Vintaging/ERRA(R 14-04-024) — Marin Clean Energy (MCE) and Lancaster Choice Energy (LCE) have opposed PG&E’s proposal to calculate a new “PCIA” exit fee for individual CCA customers as inconsistent with Commission CCA rules.
  • Residential Rate Design (R 12-06-013) — As we reported in last month’s digest, the CPUC is considering rate design changes that may reduce conservation incentives and impose hardship on customers with inelastic demand. Commissioner Florio has proposed an alternate decision that would soften the blow by developing a time-of-use pilot (rather than a wholesale change immediately) and “flatter” rate tiers than the ALJ proposes.
     
  • SCE CARE Rates/PCIA — LEAN, LCE and MCE filed protest letters to SCE’s proposal to impose the PCIA exit fee on low income.
  • Utility Green Tariffs — Utilities filed proposed tariffs in May for rates expected to go into effect by the end of the year. MCE filed a protest, proposing that utility bills of green tariff customers should show the PCIA as CCA customer bills do.

 

At the California Legislature:

  • SB 350 (deLeon and Leno) — The Senate passed the bill, which is expected to go to the Assembly this month. MCE’s concerns about CCA customers being billed twice for renewable capacity may have to be hashed out in CPUC proceedings.
  • AB 674 (Mullin) — This bill, which would have reduced non-bypassablecharges applied to IOU customers who install clean renewable technologies, died in committee.
  • AB 802  (Williams) — Would require that cost-effectiveness tests for energy efficiency be applied to all savings, not just those realized for energy efficiency improvements beyond code requirements (MCE support).
  • *SB 286 (Hertzberg) — Would raise the cap for Direct Access. Recent committee redraft requires new resources to be all Category 1 renewable. Goes to Senate floor next.

If you would like more information or want to join our regulatory and legislative alliances, please contact Kim Malcolm kmalcolm@leanenergyus.org

 

Debate over California electricity rates rages on

A controversial proposal to raise electricity rates for most Californians would “give a really big break” to the state’s wealthiest communities, top utilities regulator Mike Florio said.

Southern California Edison and other utility companies are pushing major changes that would raise prices for those who use the least and lower prices for those who use the most. Critics have slammed the proposal, saying it would harm low-income households and reduce the incentive for high-income households to invest in solar and energy efficiency.

Edison, Pacific Gas & Electric and San Diego Gas & Electric have defended their proposal, arguing that current rates unfairly penalize high-usage customers. Their planhas the backing of Michael Picker, president of the California Public Utilities Commission.

Florio, who also serves on the five-member commission, sees things differently.

Under Florio’s alternate proposal, electricity rates would still rise for low-usage customers and drop for high-usage customers. But neither change would be as dramatic as utility companies have proposed.

“I see it as only a very minor difference from that which we have today,” said Russ Garwacki, Edison’s director of pricing design and research.

The Desert Sun discussed the potential changes this week with Florio and Garwacki. Here’s a breakdown of what they had to say about four of the most important issues being debated: fairness, fixed charges, time-varying rates and impacts on conservation and solar.

Fairness

Edison’s residential customers currently pay for electricity in four tiers, with rates rising as energy users cross the threshold into each tier. The first block of energy doesn’t cost very much, per unit of energy; the second block is more expensive. The third block costs even more, and the fourth block costs the most.

The difference between the first and fourth tiers is stark. Under Edison’s current rates, energy use in the fourth tier costs more than twice as much as energy use in the first tier.

Utility officials say that difference is fundamentally unfair.

High-usage customers, they argue, are paying more than their fair share to maintain the electric grid, while low-usage customers are paying less than their fair share. Edison estimates that its high-usage customers are “subsidizing” its low-usage customers by more than $600 million per year.

Under commission president Picker’s proposal, the number of tiers would eventually be reduced from four to two, with a price difference of just 20 percent between the two tiers.

“When we start talking about rate fairness, I think that’s something that’s universally acknowledged as a good thing — customers should pay their fair share,” Garwacki said. “They shouldn’t pay subsidies.”

California’s current rates are a product of the 2001 energy crisis, which saw rolling blackouts cripple the state and the utility industry teeter on the brink of collapse. To keep Edison and other utility companies afloat, state officials approved huge rate increases — in such a way that high-usage customers would permanently bear the brunt of any new costs going forward.

Today, that crisis-driven rate structure is outdated, Garwacki said. Over the past 15 years, he said, high-usage customers have paid more than their fair share for grid maintenance, clean energy, and other changes that have nothing to do with the energy crisis.

“Once somebody gets a subsidy, most people don’t want to give it up,” Garwacki said. “That’s why some people will say the bill impacts are unfair as a result of this proposed decision.”

Florio agrees there’s too big a gap between what high-usage customers and low-usage customers pay. He just thinks Edison’s plan is much too extreme.

Picker’s proposal would raise rates for 85 to 90 percent of Californians, often by as much as $15 to $20 per month, Florio said. That plan wouldn’t increase the utilities’ revenue because some customers would save money. But almost all of the savings, Florio said, would go to the highest-usage customers — who also tend to be the wealthiest.

“The current rates do need to change, but this is a very dramatic shift,” Florio said. “It’s really going have a negative impact on a lot of people.”

Under Florio’s proposal, the number of tiers would drop from four to three. Electricity use in the third tier would ultimately cost about 77 percent more than electricity use in the first tier.

“We should protect small users, who tend to be lower-income,” Florio said.

Garwacki pushed back against that argument, noting that about a third of Edison’s customers are enrolled in the California Alternate Rates for Energy program, which provides discounts for low-income customers. He also said many high-usage customers are large families with little room to cut back.

“It’s no secret that as households have more occupants, that drives a lot of the electricity that they use,” Garwacki said. “It’s a bit of a misnomer to think that just because a customer is high-usage that that necessarily means they’re high-income.”

Asked to respond to that argument, Florio pointed to a well-established link between income and energy use.

“I’ve looked at where those largest users live, and it’s the rich communities around the state. It’s not the middle class, as the utilities have tried to spin it,” he said.

Conservation and solar

Critics charge that the utilities’ plan would discourage conservation, energy efficiency and rooftop solar. That’s because it would make electricity less expensive for those who use the most — in other words, critics say, the people who can most afford to invest in efficiency and solar.

Rooftop solar systems could take two to four years longer to pay for themselves under Picker’s proposed changes, according to the California Solar Energy Industries Association. Similarly, investments in energy efficiency would take longer to pay off for some customers.

Edison officials say their proposal would have little to no impact on energy efficiency and solar.

Even under Picker’s proposal, Garwacki said, California would still have some of the highest electricity rates in the nation. Rooftop solar prices, he noted, continue to drop, and Edison will still offer incentives to buy energy-efficient air conditioners, refrigerators and other appliances.

While the changes might result in slightly less incentive for high-usage customers to conserve, they would also increase the incentive for low-income customers to use less energy, Garwacki said.

“It’s important that all customers receive a fair price signal, so they can make a fair and correct energy-efficiency investment,” he said. “You have low-income customers who have no incentive to conserve.”

Florio doesn’t buy that argument. The utilities’ proposal, he said, “reflects their longstanding ambivalence about energy efficiency,” and is motivated in part by a fear of “solar companies taking away their business.”

It’s important to balance the need for conservation and solar with fairness for high-usage customers, Florio said. But he believes the utilities’ proposal strikes the wrong balance.

“Based on my experience, it just seemed like three tiers, each a third higher than the other, was a kind of place that was a good compromise,” Florio said. “There’s no science to that. It’s a judgment call.”

Fixed charges

Ratepayer advocates have also criticized the utilities’ proposal to add a fixed monthly charge of $10, or $5 for low-income customers enrolled in the California Alternate Rates for Energy program.

The fixed charges, they’ve argued, would essentially be a regressive tax, hitting low-usage customers the hardest. Solar advocates, meanwhile, see the fixed charges as a thinly veiled attempt by Edison and other utilities to bring in some money from solar customers.

“If you can get people to pay you just to be your customer, that’s a pretty good deal,” Florio said. “Any business I know would love to have that.”

Utilities officials have dismissed that argument. Solar customers, they say, benefit from being connected to the grid, even though they don’t pay much for its upkeep. Hence the need for fixed charges.

“It’s important that customers who choose to install solar do so knowing what the true costs and benefits are,” Garwacki said.

Edison has estimated actual fixed costs at about $30 per month, but it’s only proposed to charge $10. All other customer classes, Garwacki noted — including businesses — pay some kind of fixed charge.

“It’s very strange that we would single out residential customers, and say that it doesn’t make sense for this group of customers,” he said.

Commission president Picker has proposed phasing in the $10 fixed charge over the next few years. Edison officials have criticized that plan, saying the charges should take effect immediately.

Florio’s proposal would reject fixed charges, instead implementing a $10 minimum bill for most customers, or $5 for California Alternate Rates for Energy customers. The fact that utilities have criticized his proposal, he said, is a sign that their intentions aren’t pure.

“If all they wanted was to collect some money from people who have no or very low usage, a minimum bill would satisfy them,” Florio said. “That’s why I think it’s pretty clear there are other motivations at work.”

Time-varying rates

Rate tiers and fixed charges are one conversation. “Time-of-use” rates are another conversation entirely.

The idea behind time-varying electricity rates is simple: The cost of electricity changes depending on the time of day and time of year, so we should pay more — or less — depending on when we use energy.

If there’s one thing Florio and Picker agree on, it’s that residential customers shouldautomatically be enrolled in time-of-use electricity rates starting in 2019. Consumers would have the option of switching back to the tiered rate structure, but experts say that most people would stick with the default rates.

Proponents say time-varying rates would help reduce our dependence on climate-altering fossil fuels. That’s because when demand is highest, Edison and other utilities are forced to buy expensive electricity from “peaker” power plants that wouldn’t otherwise be needed. Those plants are generally inefficient, spewing more air pollutants and planet-warming greenhouse gases than most energy sources.

By charging more for electricity when demand has traditionally been highest, utilities could reduce “peak demand,” limiting the need for peaker plants, proponents say.

Time-varying rates would also give consumers “another way to save,” Florio said, allowing them to reduce their bills by moving energy-intensive activities from peak times to non-peak times.

“You can’t expect people to move everything, but there are things that people can do to save money,” he said. “If you just go ahead and build another plant to meet that peak demand, everybody’s got to pay for it.”

The Utility Reform Network, a ratepayer advocacy group, is worried default time-of-use rates would have unintended consequences. For instance, the group has argued, the new rates could make electricity much more expensive during the summer, hitting desert residents hard during air conditioning season.

Florio said he’s concerned about impacts on desert residents, which is why his proposal doesn’t implement default time-of-use rates for several years.

“I expect we’re going to be doing a lot of analysis between now and 2019,” he said. “If we see that there are going to be adverse impacts, we’ll need to deal with that.”

Southern California Edison officials are somewhat ambivalent about default time-of-use rates.

While the company supports prodding residential customers toward time-varying rates, the transition should be gradual, Garwacki said. Edison doesn’t think customers should be automatically enrolled in the new rates, although that seems like a foregone conclusion now.

What happens next?

It’s unclear how soon the public utilities commission will choose between the dueling electricity rate proposals. The five-member panel could vote as soon as its June 25 meeting in San Francisco.

While Picker’s position is clear, Florio said he doesn’t know how the other three commissioners — Carla Peterman, Liane Randolph and Catherine Sandoval — will vote. It’s possible, he said, that he or Picker will modify their proposals to win support.

“It takes three votes. I’ve said how I would do it if I were king, but I’m not,” Florio said. “I think there will be other options floated, and it’ll take some time to sort this out.”

Sammy Roth writes about energy and water for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.

Have an opinion?

Members of the public can tell the California Public Utilities Commission what they think of proposed rate changes by emailing the commission’s public advisor, Karen Miller, at public.advisor@cpuc.ca.gov. They can also send mail to: CPUC Public Advisor, 505 Van Ness Ave., Room 2103, San Francisco, CA 94102.

Source: California Public Utilities Commission

By the numbers

Right now, Southern California Edison customers pay for electricity in four tiers. Here are the rates:

Tier 1: 14.9 cents per kilowatt-hour

Tier 2: 19.3 cents per kWh (30 percent higher than Tier 1)

Tier 3: 27.9 cents per kWh (87 percent higher than Tier 1)

Tier 4: 31.9 cents per kWh (114 percent higher than Tier 1)

Michael Picker, president of the California Public Utilities Commission, has proposed collapsing the number of tiers from four to two. Under his plan, electricity use in Tier 2 would cost 20 percent more than electricity use in Tier 1, although actual rates have yet to be determined.

Mike Florio, another member of the public utilities commission, has proposed a three-tiered rate structure. Under his plan, electricity use in Tier 2 would cost 33 percent more than electricity use in Tier 1, and electricity use in Tier 3 would cost 77 percent more than electricity use in Tier 1.

Source: Desert Sun reporting

Largest Dual Axis Tracker Project

Mortenson to Construct One of the World’s Largest Dual-Axis Solar Projects for OCI Solar Power

Mortenson announced construction of the Alamo 6 Solar project for OCI Solar Power. Located in Pecos County, Texas, the 110-MWac utility-scale solar project is one of the largest of its kind in the world and will generate enough renewable energy for approximately 60,000 households per year once it’s operational in 2016.
The Alamo 6 project is the 35th utility-scale solar project Mortenson has built in the U.S. and is the fourth Mortenson has built for OCI Solar Power. Mortenson is serving as the full service engineering, procurement and construction (EPC) contractor on the project, while OCI Solar Power is the project developer, owner and operator.
The project utilizes the Sun Action Dual-Axis Tracker system and crystalline modules by Mission Solar. Each tracker contains 42 modules, totaling nearly 430,800 modules for the entire site. Mortenson will employ approximately 250 craft workers during construction.
Alamo 6 Solar Foundations
“The strong growth of solar power and the technological advancements of the industry is amazing,” said Trent Mostaert, vice president and general manager at Mortenson. “The price of utility-scale solar continues to fall and we are seeing increasing grid parity with other energy sources across the U.S.”
According to the U.S. Energy Information Administration, output from solar power facilities around the country more than doubled last year. More than three dozen utility-scale solar projects came online in the first quarter totaling 304 MW of capacity. The U.S. now has more than 11,300 MW of installed, large-scale solar power.
Mortenson is currently ranked as the third largest EPC firm for U.S. utility-scale solar, according to Bloomberg New Energy Finance. The company is also the leading wind energy contractor in North America.

Patchwork of Oversight Keeps Tabs on California’s Vast Oil Pipeline Network

Beach cleanup crew members work to cleanup oil from the beach at Refugio State Beach, Calif., May 22, 2015. The oil spilled into the Pacific Ocean from a broken on-land pipeline impacted the coasts and maritime environment north of Santa Barbara. (U.S. Coast Guard photo by Chief Petty Officer David Mosley)

Beach cleanup crew members work to cleanup oil from the beach at Refugio State Beach, Calif., May 22, 2015. The oil spilled into the Pacific Ocean from a broken on-land pipeline impacted the coasts and maritime environment north of Santa Barbara. (U.S. Coast Guard photo by Chief Petty Officer David Mosley)

 

 

 

 

 

 

 

 

 

The pipeline that ruptured on May 19, spilling thousands of gallons of oil into the Pacific Ocean, runs right through Santa Barbara County on its way to refineries in the Central Valley. Yet the county has no regulatory authority over it.

“Our county actually had very strict regulations, but then they lost their jurisdiction over this pipeline,” explained Environmental Defense Center chief counsel Linda Krop during a seaside news conference shortly after the spill.  “They were robbed of the ability to monitor this pipeline the last 20 years. The federal regulations are much weaker.”

The company that used to operate the pipeline sued Santa Barbara County in the late 1980s. The oil firm claimed the county didn’t have the authority to impose regulations because the pipeline — now operated by Plains All American Pipeline — crosses county and federal territory.

For example, Santa Barbara County requires major oil pipelines to be outfitted with automatic shutoff valves. Federal regulators do not require them, so the Plains pipeline didn’t have one.

But the feds do require pipeline operators to undergo regular inspections. Those can include everything from looking for surface erosion on pipes to drug testing of workers. A company may also have its own internal inspection schedule.

The Plains All American pipeline is on a five-year federal inspection cycle. That’s about standard, says John Stoody, from the Association of Oil Pipelines, an industry trade group based in Washington, D.C.

Members of the International Bird Rescue clean an oiled brown pelican in the aftermath of last week’s oil spill along the Santa Barbara County coast.
Members of International Bird Rescue clean an oiled brown pelican in the aftermath of May 19 oil spill along the Santa Barbara County coast. (courtesy of International Bird Rescue)

“A minimum of every five years the operator must evaluate that pipeline, consider the different threats, conduct inspections,” says Stoody. “And then based on the risks, go out and perform maintenance on those pipelines before they become a problem.”

The inspection process is kind of like getting a smog check for your car. A pipeline operator hires a private inspection firm that specializes in that kind of thing. Technicians then runs the pipeline through a battery of  tests and submits the results to the pipeline boss, who then hands over the data to government regulators.

“On top of that, you will have regulators, whether it’s the federal government or a state agency that comes out and inspects an operator, inspects the pipeline, their paperwork for the integrity, the safe operation,” Stoody says

The state of California has a pipeline inspection team, too. It’s a branch of the state fire agency Cal Fire. But the team is small, just a handful of inspectors and engineers.

“Yeah, we’ve been working with minimum staff for a number of years,” says California’s director of pipeline safety, Bob Gorham. “We have three full-time engineers and a couple part-time inspectors.”

They share oversight duties with federal inspectors on some 5,000 miles of pipelines across California.

Gorham says that because his staff is so small, inspections are prioritized based on each pipeline operator’s overall track record.

“And we work very closely with the federal government on the pipeline to try and determine what type of inspections and who to inspect,” he says.

Until a couple years ago, Gorham’s crew also had primary oversight of the Plains pipeline that ruptured and sullied the Santa Barbara County coastline.

But because of that staffing shortage, inspection duties on that and hundreds of miles of other pipelines were turned over to federal regulators a couple of years ago.

“And that is a problem nationwide,” says Samya Lutz, of the oil industry watchdog group the Pipeline Safety Trust. “Often the federal government or states will train pipeline inspectors. And once they’re trained up, they might just stay for a year or two before they’re picked off by the industry. Because the industry can typically afford to pay a lot more for those types of jobs.”

But starting salaries for state pipeline inspectors and engineers are set to increase this summer, says Gorham. His department, with field offices in Bakersfield and in the Long Beach area, aims to add about half a dozen additional engineers and inspectors in the coming months.

And California could reclaim pipeline oversight duties that it was forced to hand over over to federal regulators.

AUTHOR

STEVEN CUEVAS
Steven is the California Report’s Los Angeles bureau chief. He reports on an array of issues across the Southland, from immigration and regional politics to religion, the performing arts and pop culture. Prior to joining KQED in 2012, Steven covered Inland southern California for KPCC in Pasadena. He also helped establish the first newsroom at KUT in Austin, Texas where he was a general assignment reporter. Steven has received numerous awards for his reporting including an RTNDA Edward R. Murrow Award for investigative reporting in addition to awards from the LA Press Club, the Associated Press and the Society for Professional Journalists. Steven grew up in and around San Francisco and now lives in Pasadena just a short jog from the foot of the San Gabriel Mountains.

State Probing PG&E Safety Program After Concerns Raised About Potential Explosions

SAN FRANCISCO, CA - JULY 30:  A hard hat sits on the ground at a Pacific Gas and Electric (PG&E) work site on July 30, 2014 in San Francisco, California. A federal grand jury has added 27 new charges, including obstruction of justice, the criminal case against Pacific Gas and Electric for the 2010 fatal natural gas explosion in San Bruno, California. The new indictment charges PG&E with felonies and replaces a previous indictment of 12 charges related to the utility's safety practices.  (Photo by Justin Sullivan/Getty Images)

The state is investigating a Pacific Gas & Electric Co. safety program — a probe initiated after a member of Congress flagged a potential “safety threat that could lead to explosions,” KQED has learned.

The probe by the California Public Utilities Commission concerns “cross bores,” which occur when an underground natural gas line pierces another utility line — usually a sewer line — below the soil surface. Cross bores can result when work crews use an installation technique that doesn’t involve digging a trench, which means they can’t see whether pipeline damage has occurred.

These unintended pipe intersections might go undetected for years without causing a problem. But some Bay Area cities have recently partnered with utility companies to launch repair efforts out of concern that they are dangerous.

“There’s always the risk for gas explosions,” said Tyrone Jue, a spokesman for the San Francisco Public Utilities Commission, when asked about the safety hazard. “The [sewer] laterals would act like a vent, such that if there was a gas leak on that line, the gas could go up that lateral,” potentially traveling into a home or office space.

This could happen if a line was damaged, triggering a gas leak.

There have been 18 accidents resulting from cross-boring in the United States since 2002, according to the Gas Technology Institute. Mike Bruce, president of the Cross Bore Safety Association, said that’s likely “an understated number.”

But it’s impossible to know, because the Department of Transportation’sPipeline and Hazardous Materials Safety Administration does not specifically track cross-bore accidents.

“You should be concerned, but not irrationally concerned because this is a fixable problem,” said Bruce. “It’s going to take many years to get this done, because we’ve spent decades putting them in.”

Congresswoman Flags Safety Issue

In July 2014, Rep. Jackie Speier contacted the CPUC, flagging potential “deficiencies” in a PG&E program created to identify and repair cross bores. An email reference to her letter was buried among more than 65,000 emails included in some 123,000 documents PG&E was forced to release due to a lawsuit after the fatal 2010 pipeline explosion in San Bruno.

Performed by utility contractors, PG&E’s cross-bore safety program entailed reaching out to individual property owners and running cameras through underground pipes, to be followed by any needed repairs.

Speier (D-San Mateo) confirmed to KQED that she had contacted the CPUC Safety and Enforcement Division.

“Allegations were brought to my attention that testing was sometimes done by unqualified personnel, that test results from some addresses may have been falsified or addresses slated for testing were eliminated without supporting evidence,” Speier explained in an email to KQED. “These allegations suggested that deficiencies in the program were potentially a safety threat that could lead to explosions.”

Emails in July 2014 between a CPUC Safety and Enforcement Division official and PG&E — in response to Speier’s concerns –indicated that a CPUC investigator would be initiating contact with the utility. But the findings of this probe have yet to be disclosed.

Speier’s letter to the CPUC contained an excerpt from a June 17, 2013, email between apparent contractors that had been shared with her office.

“There are a large number of addresses with potential cross bores [that were] never inspected,” says the excerpted email cited in Speier’s letter.

The unnamed author requests PG&E involvement, noting, “I just don’t want to be asked the question of why an assigned address wasn’t inspected AFTER a cross bore in an uninspected address blows up. This is a very real and dangerous potential; in my humble perspective as an inspector in this program.”

The “large number of addresses” referenced in the June 2013 email provided by the whistleblower were slated for inspection in 2012.

CPUC spokeswoman Constance Gordon told KQED that the state investigation began in July 2014. “Whistleblower complaints are always screened for immediate safety concerns and then assigned to an investigator, in this case in our Safety and Enforcement Division,” she said. “The investigation includes fact-gathering, code compliance and sufficient corrective actions as warranted by the specific case.”

She added: “We cannot comment further until the investigation is completed.”

PG&E responded to calls with a written statement saying that: “As part of our commitment to the safety of our customers and the communities we serve, PG&E has deployed a comprehensive program to prevent, identify and repair cross bores throughout our natural gas system. We hold our employees and contractors to high standards and maintain a rigorous quality control process for this work. We are committed to cooperating fully with any reviews by our regulators.”

PG&E is facing criminal negligence charges for violating pipeline safety laws and obstructing justice in the case of the San Bruno transmission pipeline explosion, which killed eight people and destroyed 38 homes in September 2010. And two related investigations, one federal and state, focus on  alleged improper communications with utility executives.

Cross-Bore Explosions Can Be Deadly

On Aug. 29, 1976, an explosion and fire destroyed a house in Kenosha, Wisconsin, killing Cletus Weston, 60, and his son, David, 26. Four other people were injured and two adjacent houses were also damaged.

Earlier that morning the Weston family had called a sewer cleaning company to remove a blockage. The cleaner inserted an auger into a 6-inch sewer lateral. But the auger struck and ruptured a 2-inch plastic gas main, even though the home was not served by natural gas. Quickly, gas flowed into the house through the sewer system and an explosion occurred.

Later, the National Transportation Safety Board disclosed that the gas main had been installed by boring through the sewer lateral — a cross bore. The explosion prompted the NTSB to issue a series of recommendations, including that “inspections [should be made] …. where gas mains and sewer laterals may be in proximity.”

But it took decades, and more explosions, for many municipalities and utilities to begin searching for cross bores.

Cross Bores Discovered In Bay Area

According to documents from PG&E, there have been five “near hits” in San Francisco and the Peninsula since 2012 in which cross bores were damaged and gas was released. But they were fixed before any property damage occurred.

Workers found 24 cross bores within four city blocks in Palo Alto, according to a document cited by PG&E and presented at the Northeast Gas Association. The City Council approved $3.8 million in 2011 to inspect sewer laterals and make repairs.

Example of a cross bore.
Example of a cross bore. (Courtesy Cross Bore Safety Association)

In San Francisco, Tyrone Jue noted that the SFPUC, the agency tasked with maintaining city sewer lines, was largely unaware of cross bores until its street crews uncovered them during routine maintenance.

“[PG&E] had been doing the trenchless pipeline installation for a while, prior to us finding out about it,” he said.

PG&E later provided data suggesting that there were about 1,000 locations in the city where cross bores had occurred.

But a complaint filed against PG&E by San Francisco City Attorney Dennis Herrera suggests that there could be even more. “PG&E has identified thousands of additional locations where PG&E’s cross-bores might have caused damage to city sewer laterals,” Herrera’s June 6, 2013, complaint noted.

Both Jue and Deputy City Attorney Theresa Mueller assured KQED that the problem was in the process of being addressed, both through a formal agreement between the city and the utility and through repairs, performed either by PG&E or SFPUC.

“A vast majority of them have already been fixed,” Jue explained. However, “There are some that are still remaining.” Meanwhile, cost recovery for damage to sewer lines is still the subject of litigation.

The city made repairs to nearly 100 locations where sewer pipes were damaged by gas lines, incurring more than $1.2 million in costs.

Efforts to Raise Awareness About Cross Bores

PG&E has issued tens of thousands of brochures to sewer districts, public works agencies, plumbers and equipment rental stores to raise awareness about cross-bore safety concerns.

Nationwide, public safety programs stress that property owners should be aware of the potential safety hazard caused by cross bores.

“OK, someone’s sewer or toilet is backing up. Normally they just call the plumber. Now they’re saying, call the gas company first to make sure there’s not a cross bore,” said Carl Weimer, executive director of the Pipeline Safety Trust.

Before you or your plumber perform a repair to a sewer line outside of your foundation, call 811.

Palo Alto’s Mayor Youth Video Corp made the video below about cross bores.

AUTHOR

REBECCA BOWE

Rebecca Bowe is a journalist based in San Francisco. She’s covered Bay Area news since 2009, and previously served as News Editor of the San Francisco Bay Guardian. Follow her on Twitter @ByRebeccaBowe.