EDITORIAL: PUC should evaluate splitting up PG&E

Five long years after the gas explosion that killed eight people and destroyed 38 homes in San Bruno, the California Public Utilities Commission last week finally took Pacific Gas and Electric Co. to task.

The $1.6 billion fine was a record. PG&E’s chief executive somberly released a statement saying the utility was “deeply sorry.” But in truth, the fine scarcely registered with the massive utility or its shareholders.

And its management scarcely suffered, new PUC President Michael Picker noted. “The CEO who held that position at the time of the San Bruno incident, and during cuts in funding pipeline replacement and inspection programs, retired with a reported $38 million bonus,” Picker told the commission. “The president of PG&E at the time of the San Bruno incident is still the president.”

The problem may be that PG&E is just too big, as Picker suggested. It’s the largest investor-owned utility in the state, providing natural gas and electricity to a vast swath of California. Its gas-delivery operation is one of the nation’s largest, serving nearly 10 million customers across Northern California and the Central Valley. Its electrical operation is similarly sweeping and includes the Diablo Canyon nuclear plant.

After the San Bruno explosion, investigators found that PG&E’s pipes had deteriorated, that the company had skimped on maintenance, and that its record keeping was shoddy. They also found that PUC had inadequate oversight.

When the commission handed over thousands of emails — the result of a lawsuit filed by the city of San Bruno — the PUC came off looking less like a fierce watchdog than a Corgi trying to ride herd on Godzilla.

And though the former commission head, Michael Peevey, was a lightning rod for blame, drawing criticism for alleged back-channel dealings with the company he was supposed to regulate, the record also shows that the PUC was overmatched by the utility colossus.

The latest audit of the PUC, prepared at its own request, found that the commission’s gas safety enforcement branch is still hobbled by antiquated technology, backlogged investigations, insufficient staff and conflicting directives. Obviously, Picker and state lawmakers need to fix this.

So while the company may talk a good game, it’s hard to tell whether PG&E is creating a safer culture. In fact, problems and fines have persisted since the San Bruno accident.

At last week’s meeting, Picker asked the PUC staff to look into the commission’s options, and this week, he met with utility analysts. He has talked about breaking up PG&E. That would be a big deal. But if it can be done, the PUC should seriously consider it.