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| Explosion in San Bruno, CA, 2010. Photo from here. |
So, I thought, why can a plan to repair the aging natural gas pipelines cause outrage? Especially in Silicon Valley, the site of a massive explosion last year due to failed pipelines. Eight people died and 38 homes were destroyed in the 2010 explosion in San Bruno. In Texas, the major gas transmission lines were laid more than 40 years ago, and 25,000 of nearly 46,000 miles of transmission pipe are older than 1970, some dating back to the Great Depression. These wind underground beneath homes and cities in some of the states most populated areas.
This plan, restricted to the Bay area, would replace at least 186 miles of pipe (wow--that's expensive per mile!), inspect 243 miles with robotic devises, and assess the strength of 783 miles. It would cost $2.18 billion through 2014, of which $1.96 would be billed to PG&E's customers, and through 2014 the average residential gas customers monthly bill would rise from $1.93 to $47.16. Ooops, there's the source of outrage!
But, then I went to Bloomberg.com news where the headline was "PG&E to pay $2.2 billion to upgrade pipelines after San Bruno." It says that the utility will pay $1.4 billion in capital costs and $750 million in expenses and that "PG&E has applied for permission to pass some of the costs to customers. Shareholders will absorb $535 million." Gives a very different impression.
The Wall Street Journal says that the plan is to have a "$250 million rate increase in 2012 and subsequent increases of $30 million and $80 million in 2013 and 2014." I assume that means that, relative to current rates, the increases will be $250, $280, and $360 million in those three years. or ????
I suppose that I should try to read the actual filing, but that's too much work on a Saturday. Regardless of details, the decaying infrastructure problems in our country, and probably around the world, (roads, bridges, train tracks, water, gas) are enormous and they aren't going to be cheap to fix.
1 comment:
The real public dissatisfaction comes from the fact that PG&E has been getting General Rate increases authorized by the California Public Utilities Commission to maintain and replace natural gas pipeline infrastructure all along. The Commission has had nothing in place to follow-up on any of these improvements that allowed them the increased rates in the first place to make sure they have actually been done by PG&E. This allows the monies to be spent either elsewhere in the system possibly funneled from the Company to the Corporation side for investment elsewhere, maybe some of it into shareholders returns or into "Performance Incentive Programs", aka bonuses. And now PG&E's hand is out again to do mostly what was expected of them in the first place.
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