PG&E chairman announces company will spend millions on improvements

Clarification: An earlier version of this story said that PG&E will be spending $400 million over two years on infrastructure improvements. The story should have noted that the funds would be shareholder money, not ratepayer money.

Acknowledging that the company’s reputation is “in tatters,” PG&E’s new Chairman and Chief Executive Officer Anthony Earley announced Thursday the utility will spend $400 million in shareholder money over the next two years to improve its electrical and natural gas infrastructure.

Earley, who took charge of PG&E in August, spent an hour with the Editorial Board of The Tribune outlining the changes he plans to make to restore customer trust in the utility in the aftermath of the deadly natural gas pipeline explosion in San Bruno and questions about the seismic safety of Diablo Canyon nuclear power plant.

“We have to delight our customers,” he said. “Our reputation is in such tatters that we cannot afford to just satisfy our customers.”

Earley estimated it will take three to five years to restore trust in the utility “one customer, one constituency at a time.”

He also met with Diablo Canyon employees and urged them not to become complacent about safety.

Earley said the utility plans to hire a new chief nuclear officer who will focus solely on Diablo Canyon. Current chief nuclear officer John Conway also oversees electrical generation and splits his time between Diablo Canyon and company headquarters in San Francisco.

The new nuclear officer will be stationed at Diablo Canyon and will fill an intermediary position between Conway and plant manager Jim Becker. Earley did not say when the position would be filled, but said the utility is looking at candidates both inside and outside the company.

While management of the utility’s largest asset, Diablo Canyon, is ranked among the best in the nation, the company’s level of customer satisfaction, distribution system maintenance and speed of service are among the third and fourth quartiles of the industry, Earley said.

Chief among PG&E’s woes is the September 2010 pipeline explosion in San Bruno that killed eight people. Investigations have since revealed that the company’s pipeline record keeping was a shambles; the utility just recently admitted further gaps in its pipeline survey maps.

“As the San Bruno tragedy showed, if you don’t invest in infrastructure, you are going to have very serious problems,” he said. PG&E does not deliver natural gas in San Luis Obispo County; Southern California Gas Co. does.

Concerning Diablo Canyon, seismic safety and storage of highly radioactive used reactor fuel are two of the community’s biggest concerns. The utility is in the midst of performing $64 million in seismic studies to determine the earthquake potential of the faults surrounding the plant.

Earley said he supports the recommendations of a federal committee that has proposed the establishment of several temporary regional storage sites to take spent fuel from the nation’s 104 nuclear reactors. With abandonment of plans to build a federal repository at Yucca Mountain in Nevada, Diablo Canyon’s spent fuel will be stored onsite for the foreseeable future.

Citing the nuclear industry’s need to coordinate with federal regulators, Earley declined to make any promises that PG&E would lower the density of fuel assemblies stored in Diablo Canyon’s spent fuel pools by accelerating their transfer to dry casks. The pools are near their storage capacity, and PG&E has considered as a safety precaution reducing the density — possibly as low as 600 assemblies per pool — but not to their original, low-density configuration of 270 assemblies.

Earley also wouldn’t promise that the utility would meet a summer deadline to sign over property it owns in Wild Cherry Canyon behind Avila Beach to create a 65 percent addition to Montaña de Oro State Park.

“The concept is great,” he said, but added he has not had enough time to get up to speed on the project.

PG&E is the largest private employer in San Luis Obispo County with 1,500 employees. Approximately 1,400 of these work at Diablo Canyon. The utility has nearly 15 million customers in Northern and Central California.