Two years before the San Bruno gas pipeline explosion killed eight people and leveled a neighborhood in 2010, Pacific Gas & Electric (PG&E) was discussing internally a plan to downgrade 2,304 serious leaks to avoid repairs and save nearly $5 million, according to a memo uncovered by the San Francisco Chronicle.

PG&E maintained a bonus system, also detailed by the newspaper in December, which  rewarded supervisors for keeping the leak count down. That incentive system was abandoned in 2008 when company whistle-blowers exposed it, but not before the man who was mapping the pipeline leaks referred to the possible downgrades as a “win/win for the managers but not for the actual leak process.”

The utility company uses a three-grade system for classifying leaks based on how seriously they need attention. The 2,304 leaks all had middle grades, which require repairs within three to 18 months. While the memo doesn’t specifically call for the leaks being downgraded, it has them grouped under a heading “excessive leaks scheduled for repair.”    

A PG&E spokesman said the memo was merely a request to observe the situation but not take action. Location of the leaks was not discernable from the memo and PG&E maintains a vast network of pipelines throughout Northern California.

The San Bruno blast was caused by a poorly constructed weld that failed in September 2010. Subsequent investigation showed the weld to be only half the required thickness.   State regulators have accused the utility of shoddy record keeping, failure to do required tests, control room breakdowns, a crummy emergency response and a culture that “emphasized profits over safety.”

PG&E agreed in March to pay the city of San Bruno $70 million to create a nonprofit organization to assist victims of the explosion. The company also set up a $100 million relief fund of its own, but still faces a class-action lawsuit filed by hundreds of the blast’s victims.

–Ken Broder

To Learn More:

PG&E Memo: Downgrading Leaks Would Cut Costs (by Jaxon Van Derbeken, San Francisco Chronicle)

PG&E Blames Deadly San Bruno Blast on Pipe Test the State Says Never Happened (by Ken Broder, AllGov)

PG&E Incentive System Blamed for Leak Oversights (by Jaxon Van Derbeken, San Francisco Chronicle)