Confidential Report Rips State Utilities Commission for Downplaying Safety

Wednesday, April 17, 2013

A confidential, independent report about California’s Public Utilities Commission (PUC), inspired by the San Bruno pipeline explosion in 2010 that killed eight people and leveled a neighborhood, spends 24 pages detailing why the agency is doing a miserable job on safety issues.

The internal report from Business Advantage Consulting, entitled “California Public Utilities Commission Safety Culture Change Project,” was obtained by NBC Bay Area and the San Francisco Chronicle. It details safety deficiencies, criticizes the agency’s overcozy relationship with the utilities it regulates and accuses the conflict-aversive Executive Director Paul Clanon of avoiding important issues.

It divides the problems into three groups: cultural issues, structural issues and external pressure from powerful business interests and other stakeholders that place “a low priority” on safety.

The report, which is based on extensive interviews with managers, staff and lower-level employees, gives prominent placement to allegations that safety is not a priority. When safety is not the “flavor of the month,” the interviewers were repeatedly told, it has a low priority.

“For many years, the PUC has been celebrated as a leader in representing taxpayers and for promoting innovative and green technologies,” the report says. “There has been little attention and limited resources directed toward reliability, and even fewer toward safety by the Legislature and the Commissioners. Because safety is considered to be ‘off the radar screen’ of most Commissioners and legislators, it is considered to have little cache for PUC staff and managers.”

While many of the interviewees expressed the need for a new risk assessment approach that emphasizes safety, some insisted that the PUC’s larger failure was simply not enforcing the rules already on the books. “It is not rocket science to do regulations,” one interviewee said. “We have clear and explicit guidelines.” The dissidents suggested hiring more inspectors and training them properly.

The report says that part of the problem is that the PUC is such a laid back bunch of regular guys (“casual”) who work in an atmosphere (“open”) that promotes communication and innovation, but diminishes “accountability.” It cites the director’s open-door policy, employee casual dress, lack of reliance on evaluations and a San Francisco address as contributing to the PUC lack of safety awareness.

Oh, ya. One more thing. The report includes in that list of suspect behavior “the industry’s easy access to the PUC.”  The report devotes a few more paragraphs at the end of the report on how outside influences, including the Legislature, are more concerned about economic factors than safety.

“Safety is not handled proactively,” respondents told investigators. “Rather, it tends to be addressed reactively after events. The current focus on job creation and boosting the economy makes over-regulation unpopular.”

For the record, the PUC says it is not too cozy with the utilities it regulates. In an interview with NBC Bay Area in 2011, Executive Director Clanon said, “This is what I have to say to anyone who has that perception—it’s wrong.”

–Ken Broder


To Learn More:

Confidential Document Exposes Serious Problems at CPUC (by  Tony Kovaleski, Liz Wagner and Felipe Escamilla, NBC Bay Area)

Lawmakers to Probe CA Utilities Regulator’s Safety Commitment (by Torey Van Oot, Sacramento Bee)

Before San Bruno Blast, PG&E Wanted to Downgrade Gas Leaks to Save Money (by Ken Broder, AllGov California)

CPUC Safety Culture Change Initial Discovery Report (Business Advantage Consulting) (pdf)

Leave a comment