I1011013 Order Istituting Investigation and Notice of Hearing

III. VIOLATIONS ALLEGED AND PG&E REPORT REQUIRED

CPSD has alleged violations of the law with respect to Rancho Cordova, as follows:

1. In 2006, PG&E installed a section of PE pipe that was not approved for gas usage in the ground at 10708 Paiute Way, and used it daily to transport gas to 10708 Paiute Way and other residents between September 21, 2006 and December 24, 2008. PG&E's installation and use of the pipe violated the requirements of federal law, 49 Code of Federal Regulations (CFR) Section (§) 192.13(c) and 192.59(a)(1), incorporated into the Commission's General Order 112-E, and of Public Utilities Code (Pub. Util. Code) § 451 to provide safe public utility gas service. CPSD contends that an approximately six-inch long piece of pipe used by PG&E for the 2006 repair did not meet the specifications of size and markings, and manufacture mandated for utility gas pipes by federal law and adopted and required by the Commission. CPSD also contends that the failure of this pipe was a root cause of the catastrophic explosion in Rancho Cordova on December 24, 2008.

2. PG&E's management failure to ensure that appropriate inspections were conducted to locate non-conforming pipe in the ground violated the requirements of federal law, 49 CFR
§ 192.13(c) incorporated into the Commission's General Order 112-E, and of Pub. Util. Code § 451 to provide safe public utility gas service, and contributed to the December 24, 2008 Rancho Cordova gas explosion. CPSD alleges that, when PG&E discovered during installation testing that non-conforming gas pipe had been used for a Sacramento area repair done in October 2006, PG&E failed to take corrective actions and preventative measures, such as the excavation of other installation of similar sized pipe in the same area and during the same general time period. CPSD contends that this omission contributed to the explosion at Rancho Cordova.

3. PG&E violated the requirements of Pub. Util. Code § 451 to provide safe public utility gas service, and 49 CFR § 192.13(c) incorporated into the Commission's General Order 112-E, because PG&E failed to follow its own procedure to ensure that gas service employee safeguard life and property when an outside hazardous leak is suspected.

4. PG&E violated multiple named subsections and requirements of 49 CFR § 192.615 (a), (b), and incorporated into the Commission's General Order 112-E, and violated the requirement of Pub. Util. Code § 451 to provide safe public utility gas service, by failing to comply with statutory requirements to develop and implement requirements for effective gas emergency plans.

5. PG&E violated the requirements of Pub. Util. Code § 451 to provide safe public utility service, and 49 CFR § 199.105(b) and 199.225(a), and incorporated into the Commission's General Order 112-E, in that PG&E failed to administer a drug and alcohol detection test to a key PG&E employee (leak investigator) to ascertain whether alcohol or drug use could definitively be ruled out as one contributing cause of the explosion.

The Commission intends to hold public hearing to address these matters, and also to direct Respondent PG&E to reply to specific questions. The Commission also invites interested parties to actively participate in this proceeding as it involves important safety and other policy matters that will benefit from the expertise, participation, and evidence of other parties.

This proceeding shall seek to:

(1) Determine whether PG&E violated any provisions of the Public Utilities Code, general orders, Commission decisions, federal gas safety regulations and laws that the federal government has authorized the Commission to enforce in California, or whether PG&E has violated other rules, or requirements, regarding their facilities, practices, procedures, training, and supervision, linked to their gas service at Rancho Cordova.

(2) Determine the remedy or remedies for any proven violation;

(3) Determine whether PG&E's safety practices should be modified to ensure safe future PG&E gas service.

The reports of NTSB and CPSD provide us with reason to investigate whether violations have occurred, and if so whether the violations may have been factors in causing the explosion. Respondent should identify facts and circumstances to the contrary in support of its positions and conclusions. In view of the specific information in both the NTSB and CPSD reports, we will expect that if PG&E disagrees with NTSB's and CPSD's alleged violations, it will present evidence and law ample to deny each violation asserted by NTSB and CPSD. The reports and source documents used by CPSD in its reports are attached hereto.

PG&E is therefore directed to appear and provide a report by
December 17, 2010, to identify all reasons of law and fact currently known to PG&E to establish that the company has committed none of the violations alleged in CPSD's report. If PG&E also takes the position that the December 24, 2008 explosion would have occurred even absent any PG&E violation, we further direct PG&E to explain that position.

The Commission therefore directs PG&E to file, by December 17, 2010, a written report with the Commission and CPSD, served on all parties to this proceeding, which fully responds to the following directive for information:

A. Provide the dates of each service call, communication, or complaint PG&E received between January 1, 2000 and December 24, 2008 (including that date) related to gas facilities located at the homes or on or under the properties at 10700, 10704, 10708, 10712, or 10716 Paiute Way, Rancho Cordova. For each such service call or complaint, provide:

1. The date and time of the service call, communication or complaint.

2. The name and address of each such person who made the service call, communication, or complaint.

3. A summary of the service call, communication, or complaint.

4. A summary of each PG&E action, installation, or repair taken in response to each such service call, communication, or complaint.

B. To the extent not described in PG&E's response to "A" above, and for the period from January 1, 2000 through
December 23, 2008, provide the dates and descriptions of maintenance conducted, repairs conducted, modifications made, and additional equipment installed, on any of the gas facilities located at the homes or on or under the properties and 10700, 10704, 10708, 10712, and 10716 Paiute Way, Rancho Cordova.

C. Provide a copy of each and all PG&E manual and written communication in use by PG&E between January 1, 2000 and December 23, 2008, which informs PG&E's gas personnel about the conditions under which PG&E personnel are directed to undertake evacuation of residences, buildings, or areas in the event of gas leaks.

D. Provide a copy of each and all PG&E manuals and written communications in use by PG&E between January 1, 2000 and December 23, 2008, and which informs PG&E's gas personnel about PG&E's procedures for evacuation of residences, buildings, or areas in the event of gas leaks.

E. Provide a copy of each PG&E manual and written communication in use by PG&E between January 1, 2000 and December 23, 2008, which informs PG&E's gas personnel of their expected response times and priorities to complaints or service calls pertaining to gas leaks or gas odors.

F. Provide a summary of actions PG&E took between
January 1, 2000, and December 23, 2008 to comply with each and all provisions and subsections of 49 CFR § 192.615. The summary shall identify and describe, individually for each lettered and numbered requirement:

1. PG&E action taken or procedures developed

2. The date of such action or procedure

3. Identify and summarize each communication made during the period, both verbal and written, by which PG&E communicated each procedure required by the law cited (49 CFR § 192.615) to PG&E employees.

G. Provide a summary of all PG&E actions taken, with dates shown, after PG&E found the non-conforming pipe at 8101 Consumnes River Blvd. in Elk Grove, to ascertain whether other non-conforming gas pipes had been installed in the Sacramento area for use in gas service.

H. Provide a summary of PG&E's contentions and a list of evidence in support of each such contention, as to whether its actions violated any of the authorities listed in Section III, 1-7 above, with respect to any PG&E actions taken between January 1, 2000, and December 23, 2008 (including that day), pertaining to gas facilities at or underneath 10700, 10704, 10708, 10712, and 10716 Paiute Way, Rancho Cordova.

I. Describe why all of PG&E's actions and practices, related to the matters alleged in CPSD's report and by NTSB's Pipeline Accident Brief adopted by NTSB on May 10, 2008, were lawful, reasonable and prudent.

J. Does PG&E contend that the December 24, 2010 explosion, property damage, injuries, and loss of life, would have occurred even if PG&E's actions before and on that date had been lawful, reasonable, and prudent? If the answer is anything other than an unqualified "no", provide support for PG&E's contention.

K. Provide all documents that support or relate to the responses and information provided in the report.

L Provide the names (and titles if employee or agent) of all witnesses to the responses and information in the report. Provide the name of each such witness with respect to specified portions of the report.

M. The Commission also directs PG&E to provide the following additional information in its report:

1. Does PG&E agree to reimburse the Commission for CPSD costs of investigating the Rancho Cordova explosion and the circumstances leading to it? If PG&E answers anything other than an unqualified "yes", PG&E is directed to state facts and law in support of its position.

2. In reference to each PG&E "post accident action" noted and summarized in the PAB at pp. 15 and 16, PG&E is directed to provide the date of implementation, a summary of the means by which it was implemented, and an assessment of the means by which the action has been effective in preventing the kind of explosion and harm to persons and property that occurred in Rancho Cordova.