Records of thousands of miles of PG&E's high-pressure gas transmission lines are so incomplete that it is impossible to know whether substandard pipe like the one that exploded in San Bruno more than 50 years after its installation lurks elsewhere, according to one of two reports released by regulators late Monday.
The poor record keeping also makes it difficult to make decisions about pipeline maintenance or replacement, the reports found.
"In lay terms, PG&E's record keeping was in a mess and had been for years," one of the reports concluded. "Gas transmission records and safety-related documents were scattered, disorganized, duplicated and were difficult if not impossible to access in a prompt and efficient manner."
In a statement, PG&E acknowledged its record-keeping problems but said the company was fixing them, having collected, scanned and computerized more than 2.5 million paper documents last year. Since the explosion, PG&E has vowed to make safety a top priority.
"PG&E has acknowledged the need to improve how we collect, store, access and share information about our natural gas system," said the company's executive vice president for gas operations, Nick Stavropoulos.
One of the reports evaluated PG&E's record-keeping practices in general and found them wanting, while the other discussed how poor record keeping may have impaired PG&E's ability to safely run its 6,800 miles of transmission pipelines, including the one that exploded and killed eight people in San Bruno in September 2010.
Together, the reports, which were done by consultants for the consumer safety arm of the California Public Utilities Commission, will be used to make a case for possible penalties that the commission may issue later.
"It was garbage in, garbage out. Their record-keeping was garbage, so how could they make decisions ... to evaluate your gas transmission system?" said Assemblyman Jerry Hill, D-San Mateo.
Among the findings: The segment that exploded in September 2010 would never have been installed by crews in the 1950s if PG&E had better records at the time because it would have been clearly substandard. Instead, the reused pipe had been wrapped and crews could not see its defects.
The reports released Monday make no recommendations on fines, but one of the reports suggested ratepayers should not have to pay $223 million to improve record-keeping, as PG&E has requested.
The explosion occurred Sept. 9, 2010, after a power failure at a PG&E terminal in Milpitas caused pressure to increase along the gas transmission line. The San Bruno blast opened a huge crater and launched a 28-foot section of 30-inch pipeline 100 feet. In addition to the eight fatalities, more than three dozen homes were destroyed.
The CPUC launched the formal investigation into PG&E's record keeping five months later, after the National Transportation Safety Board determined the utility's records incorrectly showed the pipe that ruptured was seamless, when in fact it was welded -- both along its length and also where several short segments were pieced together. It was the first of three formal investigations started by the utilities commission.
A hearing is set next week to lay out a schedule for the investigation, which could stretch into next year. The document released Monday is akin to a prosecutor's charging document.
Hearings will be held before an administrative law judge who will make a recommendation to the CPUC's commissioners. If fines are ordered, they could be substantial -- potentially up to $20,000 per day of violation.
Of the other two ongoing CPUC investigations, one looks at whether the company accurately classified pipelines in populated areas, while a much broader investigation launched in January seeks to determine if the company violated state laws, pipeline regulations or industry standards.
In January, the consumer protection arm of the CPUC released a blistering report as part of that investigation, blaming the explosion on a long list of failures at PG&E from the date it installed the pipe to the day it exploded, "and a systemic failure of PG&E's corporate culture to emphasize safety over profits."
In addition, regulators are engaged in a wholesale review of pipeline safety at California's four gas utilities. PG&E has proposed $2.2 billion in upgrades over the next few years to address safety issues in its network of pipelines.