PG&E (NYSE: PCG) affirmed Oct. 29 the company is continuing efforts to work with all parties to pursue a settlement of the outstanding regulatory and liability issues related to the San Bruno natural gas pipeline explosion.
While the quarterly earnings call was dominated by San Bruno-related issues, PG&E Chairman, CEO and President Tony Earley said his company and other western utilities are also looking for ways to help eastern power companies hit by Hurricane Sandy.
Company officials indicated they were not overly concerned about any new Nuclear Regulatory Commission (NRC) seismic monitoring or oversight at Pacific Gas & Electric’s (PG&E) Diablo Canyon nuclear plant in California.
The company did add some new nuclear seismic language to its list of potential financial concerns, but the company said it was just showing an abundance of caution. The nuclear issue was brought up by a financial analyst.
The NRC issued a news release Oct. 12 saying that it continues to conclude the plant’s design would withstand earthquakes near the site. NRC has said it is trying to better understand a “Shoreline fault” about a kilometer offshore from the plant.
The plant is located about 12 miles southwest of San Luis Obispo, Calif. The company first notified the NRC in November 2008 about the Shoreline fault. Diablo Canyon recently declared an “unusual event” at the plant in response to an earthquake near King City that was felt in the control room. King City is located about 90 miles north of the plant.
Pipeline, regulatory costs dominate discussion
The total cost for natural gas pipeline-related actions since the San Bruno accident is now about $915m, all of which has been incurred at shareholders’ expense, the San Francisco-based company said in its quarterly earnings call.
That’s notwithstanding a recent proposed decision by the California Public Utilities Commission (CPUC) on the company’s Pipeline Safety Enhancement Plan that would disallow recovery of significant costs.
Earley had hoped to get the key proceedings behind the company by the end of the year, which is looking less likely, he noted.
“Our results for the quarter reflect continued progress in our ongoing efforts to improve PG&E’s operations across the business, with a clear focus on making our system the safest in the country and delivering service reliably and affordably,” Earley said. “We remain fully committed to resolving our gas pipeline issues, positioning PG&E for long-term success, and rebuilding relationships with customers and others.”
In September 2010, a PG&E pipeline in the San Francisco suburb of San Bruno, located near the San Francisco International Airport. Several people were killed.
CPUC had picked former U.S. Sen. George Mitchell, D-Maine, to serve as mediator in talks over how much PG&E should be fined. News reports Oct. 26 indicated that Mitchell and his law firm have offered to withdraw following criticism over how Mitchell was selected.
While Earley described Mitchell as thoroughly qualified for the job, the PG&E CEO said that it would be good if the parties had more input into selection of a mediator.
PG&E’s third quarter 2012 net income after dividends on preferred stock (also called “income available for common shareholders”) was $361m, or $0.84 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with $200m, or $0.50 per share, for the third quarter of 2011, when GAAP results were reduced significantly by charges for third-party liability related to the San Bruno pipeline accident and environmental cleanup costs associated with historic operations at the company’s natural gas compressor station in Hinkley, Calif.