Kinder Morgan's Bannigan says he'll fight California PUC action, asks for rehearing

HOUSTON, Texas - SFPP LP, a wholly owned subsidiary of Kinder Morgan Energy Partners, on May 26 vowed to seek a rehearing and pursue other legal options to have an adverse order issued by the California Public Utilities Commission (CPUC) overturned.

Among other things, the order would eliminate from SFPP's rates an allowance for income taxes on income generated by SFPP. The order would affect only the rates for SFPP's pipeline service within California.

"This order is contrary to both CPUC precedent and to existing and established federal regulatory policies for pipelines," said Tom Bannigan, president of KMP's products pipelines, in a news release.

SFPP's assets include about 2,500 miles of pipelines in California and other western states that transport refined petroleum products. Kinder Morgan is reviewing the order to quantify the financial effect on SFPP and the rates it charges shippers. (Source: Julie Armstrong, Houston Business Journal, May 27, 2011)

PG&E says its inaccurate records did not lead to San Bruno blast

SAN BRUNO, Calif. - The gas pipeline explosion that killed eight people and destroyed 38 homes in San Bruno would have happened even if Pacific Gas and Electric Co. had kept accurate records of the line, the company told state regulators on April 19.

The rupture on the 30-inch transmission line that caused the Sept. 9 explosion took place at an incomplete weld on a pipe seam, metallurgists with the National Transportation Safety Board have concluded. PG&E's records showed that the pipe had no seams, and it never conducted inspections that might have detected a flawed seam weld.

However, the type of weld that ruptured does not have a record of failing, PG&E told the state Public Utilities Commission. As a result, it said, the company still would have picked an inspection technique best suited for finding the problem that PG&E considered the greatest threat to the line - corrosion - and not flawed welds.

"The question becomes whether the correct seam type information ... would have changed PG&E's assessment methodology" and "potentially prevented the Sept. 9, 2010, San Bruno pipeline rupture," the company said. "The short answer to that question is 'no.' "

California names panel to investigate Pacific Gas & Electric

A five-member panel has been created by the California Public Utilities Commission to look into the cause of the Pacific Gas & Electric gas pipeline explosion in San Bruno, Calif., and find ways to avoid such tragedies in the future.

Eight persons died in the inferno, and 37 homes were destroyed when the aged high-pressure natural gas transmission pipeline ruptured.

Members of the blue ribbon panel were selected by PUC President Michael Peevey.

The panel will be chaired by Larry Vanderhoef, chancellor emeritus at University of California, Davis. Other members are Patrick Lavin, an executive council member of the International Brotherhood of Electrical Workers; Karl Pister, chair of the governing board of the California Council on Science and Technology; Jan Schori, former CEO of the Sacramento Municipal Utility District; and Paula Rosput Reynolds, former CEO of an Atlanta energy services holding company and a one-time PG&E executive.
Because the panel is supposed to be independent, Reynolds' former ties with PG&E were questioned by commissioner Timothy Simon. But Peevey, who nominated the panel members, dismissed the concern.
"She brings an incredible breadth of experience in running a gas utility and that's the kind of expertise and knowledge that will be very valuable, I think, to the other members of the panel," Peevey said.
One concern about keeping the gas line pressure low is that it might reduce the electricity output from the Potrero Power Plant in San Francisco, which is largely fueled by natural gas.