7. Comments on Proposed Decision

The proposed decision of the ALJ Maribeth A. Bushey in this matter was mailed to the parties on September 23, 2011, in accordance with the expedited schedule adopted in D.11-09-006. The expedited schedule called for parties to file and serve comments no later than noon, Friday, September 30, 2011. PG&E filed comments requesting a revision to Ordering Paragraph 3. The revision has not been made as it could have been interpreted to decrease PG&E's testing obligation.

Findings of Fact

1. The Commission ordered PG&E to reduce operating pressure on several natural gas transmission pipelines, pending demonstration that the pipelines can be safely operated at the originally established MAOP.

2. On September 12, 2011, PG&E filed and served pressure test results for the suction side of the Topock, as part of its Supporting Information required by D.11-09-006.

3. PG&E's Vice President of Gas Operations - Standards and Policies verified that PG&E has validated the engineering and construction of, and performed pressure tests in accord with 49 CFR 192 Subpart J on all segments of the natural gas pipelines on the suction side of the Topock. The Vice President concluded that these pipelines could be safely operated at the restored MAOP of 660 psig.

4. CPSD reviewed PG&E's pressure test results, identified several deficiencies but concluded that the information presented was adequate to support the conclusion that pressure on the lines could be safely restored to the previous MAOP of 660 psig.

Conclusions of Law

1. PG&E has complied with the Supporting Information requirements of D.11-09-006.

2. PG&E has demonstrated that the suction side of the Topock Compressor Station has been successfully pressure tested in accord with 49 CFR 192 Subpart J.

3. The Commission's operating pressure restriction on the pipelines in the suction side of the Topock Compressor Station can safely be rescinded.

4. PG&E should be ordered to remedy the pressure testing deficiencies noted in CPSD's September 12, 2011, memorandum.

5. The public necessity as defined in Rule 14.6(c)(9) of the Commission's Rules of Practice and Procedure requires a reduction of the 30-day period for public comment and review of the Commission's proposed decision on the whether to lift the operating pressure limitation on the suction side of the Topock compressor.

6. This decision should be effective immediately.

ORDER

Therefore, IT IS ORDERED that:

1. The Commission's February 2, 2011, operating pressure limitation placed on the suction side of the Topock Compressor Station owned and operated by Pacific Gas and Electric Company is rescinded.

2. Pacific Gas and Electric Company must operate the Topock Compressor Station in accord with applicable state and federal law and regulations.

3. In future requests to rescind Commission-ordered operating pressure limitation, Pacific Gas and Electric Company must remedy the pressure testing deficiencies noted in the Consumer Protection and Safety Division's September 12, 2011, memorandum.

4. In future requests to rescind Commission-ordered operating pressure limitation, Pacific Gas and Electric Company must include a summary table showing the following information for each segment tested: current maximum operating pressure, minimum indicated test pressure at test point, spike test results, ratio of highest test pressure to maximum operating pressure, percent specified minimum yield strength at test pressure, percent specified minimum yield strength at maximum operating pressure.

5. In future requests to rescind Commission-ordered operating pressure limitation, Pacific Gas and Electric Company must identify segments tested to a maximum operating pressure higher than the previous maximum operating pressure and indicate if and when Pacific Gas and Electric Company expects to undertake the review necessary to increase the maximum operating pressure for that segment.

6. Rulemaking 11-02-019 remains open.

This order is effective today.

Dated October 6, 2011, at Los Angeles, California.

I reserve the right to file a concurrence.

/s/ TIMOTHY ALAN SIMON

Commissioner

Concurrence of Commissioner Timothy Alan Simon on Item 26 Decision D.11-10-010 Order Instituting Rulemaking on the Commission's Own Motion to Adopt New Safety and Reliability Regulations for Natural Gas Transmission and Distribution Pipelines and Related Ratesetting Mechanisms

My concurrence with this Decision is based on my understanding that it authorizes Pacific Gas and Electric Company (PG&E) to restore the Maximum Allowable Operating Pressure (MAOP) of the suction side of the Topock Compressor Station to 660 pounds per square inch gage. Accordingly, a stricter precedent is set for PG&E and other utilities for requesting to increase pipeline pressure and notice of such requests should always be provided to public and local officials along with the steps taken to make the pipeline safe. I support that this decision increases operating pressure on specific segments of natural gas pipelines on the suction side of the Topock compressor station. Raising the pressure will restore the overall pipeline flow rates on PG&E's Lines 300A and 300B this winter to meet its core customer demand. I want to be clear that the Decision addresses only increasing the operating pressure based on PG&E's pressure test results for the 11 segments pressure tested on the suction side of the Topock Compressor Station and does not substitute or replace any other tests that PG&E will be required to undergo as part of its pipeline safety protocol.

I am concerned that increasing operating pressure is an important step in ensuring pipeline safety and PG&E and other utilities are required to follow detailed steps every time such requests are made to CPUC. At the core of my concern is the pressure testing accountability and verification. Based on my review of the record, I am concerned, further that matters of this sort are more appropriately handled by a vote of the full Commission. There is little recognition in this Decision why it is crucial for PG&E and other utilities to be responsive to issues raised by the CPUC Consumer Protections and Safety Division (CPSD)4 about spike tests and that they must engage in independent verification and expert test conclusion. My concern is that going forward PG&E should neither conclude nor substitute the necessity of required spike tests by its own determination.

The National Transportation Safety Board (NTSB) in its January 3, 2011 Safety Recommendation letter5 stated the importance of spike testing6. Studies (discussed in section 1.13.1.1, "Pressure Testing" NTSB Accident Report)7 have shown that hydrostatic pressure testing is most effective when it incorporates a spike test in which the pipeline is initially pressurized to a higher level for a short time. Accordingly, the NTSB recommends that PHMSA amend 49 CFR 192.619 to delete the grandfather clause and require that all gas transmission pipelines constructed before 1970 be subjected to a hydrostatic pressure test that incorporates a spike test.8

Thus, while I can agree with CPSD arguments that, if done properly, PG&E's testing can assist in avoiding unnecessary spike tests, I am concerned that the Commission is not establishing precedent which permits PG&E to self-evaluate and report to the Commission on its assessment of the necessity of spike tests. Going forward, such determination should always be made by CPSD recommendation and authorized by vote of the Commissioners.

Finally, the process to restore operating pressure should be analyzed by independent experts and reviewed in a public process by the Commission. In no case should such requests be conveyed by memo from a utility to CPSD. Similarly, the conclusion to increase pressure should be based on pressure test results as a primary measure. I request CPSD establish protocol to keep each Commissioner informed of PG&E's testing compliance.

This Decision should not be interpreted as embracing ancillary communications between PG&E and CPSD or sanctioning collateral documentation materials that are not subject to the public review. CPUC September 8, 2011 decision denied PG&E's motion to delegate authority to the Executive Director to approve request to lift operating pressure limitations.9

The San Bruno tragedy, urgently, requires the CPUC to evaluate the effectiveness of PG&E's safety requirements; improve the way information is provided to the public and emergency responders; and reform the process by which utilities notify federal, state and local officials of safety measures. PG&E must address all necessary safety measures.

Accordingly, I concur with this decision and will vigilantly continue to examine whether the testing and the increase of pipeline pressure process are effective.

Dated October 12, 2011, at Los Angeles, California.

/s/ TIMOTHY ALAN SIMON

Timothy Alan Simon

4 Consumer Protection and Safety Division Review of Pacific Gas and Electricity Company Request to Restore MAOP of Pipeline Facilities at Topock Compressor Station, Memorandum, September 12, 2011: In a memorandum dated September 12, 2011, CPSD listed several deficiencies [ not conducting some spike tests as required] in PG&E's pressure test protocols and records, but determined that the tests conducted by PG&E had demonstrated adequate assurance of the fitness for operation of these facilities at the restored MAOP. Consumer Protection and Safety Division, California Public Utilities Commission, Review of Pacific Gas and Electricity Company Request to Restore MAOP of Pipeline Facilities at Topock Compressor Station, September 12, 2011.

5 National Transportation Safety Board, Safety Recommendations to PG&E Regarding Record-keeping and Hydrostatic Pressure Testing, Page 2, January 3, 2011.

6 The MAOP for a pipeline can be established by conducting a hydrostatic pressure test that stresses the pipe to 125 percent of the desired MAOP without failure. In a hydrostatic pressure test, a pipe segment is typically filled with water at a specific pressure for a specific period of time to test the strength of the pipe. Hydrostatic testing requirements and restrictions for natural gas pipelines are specified in Title 49 Code of Federal Regulations (CFR) Part 192, Subpart J [ 49 CFR Part 192, Subpart J]. The spike test is a variation of the hydrostatic pressure test in which a higher hydrostatic pressure, usually 139 percent of the MAOP, is applied for a short period of time (typically about 30 minutes). The spike test is intended to eliminate flaws that may otherwise grow and cause failure during pressure reduction after the hydrostatic test or resulting from normal operational pressure cycles. It is advantageous to include a spike test because it limits the time the line is at the higher pressure to reduce the potential amount of crack growth. Although hydrostatic testing is recognized to be a direct and effective methodology for validating an MAOP, its implementation requires that operating lines be shut down, which may adversely affect customers dependent on the natural gas supplied by the pipeline, particularly if the pipe fails during the test, which could necessitate a protracted shutdown. Consequently, it is preferable to use available design, construction, inspection, testing, and other related records3 to calculate the valid MAOP.

7 National Transportation Safety Board Accident Report, NTSB/PAR - 11/01 PB 2011-916501, Section 1.13.1.1, pp. 82.

8 Ibid, Section 2.5.2, pp. 107.

9 California Public Utilities Commission Decision 11-09-006, September 8, 2011. Order Instituting Rulemaking on the Commission's Own Motion to Adopt New Safety and Reliability Regulations for Natural Gas Transmission and Distribution Pipelines and Related Ratemaking Mechanisms.

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