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PG&E Update: Replacing 1200 Miles of Gas Lines including Bay Area

Posted by Josh Burroughs on Tue, Oct 18, 2011 @ 02:04 AM
  
  
  
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describe the imageIf you haven't caught it in the news yet, PG&E has had their hands full lately.  Earlier this month, another gas pipe sparked a fire, this time close to home in the Bay Area, at a Cupertino Condo complex.  This particular instance was a leaky plastic gas pipe, part of a 1231 Mile plastic pipeline spread across California.  Below are some notes I picked up:

  • PG&E will start replacement of these pipes in November in Cupertino and Roseville (where another pipe burst)
  • Total 1200 Mile Job will cost at least $1 Billion and will be completed over the next few years (maybe 10 years).
  • Plastic pipes were produced prior to 1973 and are pre-disposed to cracking
  • PG&E will ask for a rate increase for consumers to pay for the cost!
  • PG&E is not required to replace these lines
  • PG&E will be the 1st in the nation to replace aged pipelines

natural gas pipelines being replaced in californiaSo, the question I have for our readers is this: Should the California Tax payers be liable for incurring the cost to replace these lines?  I'm not sure what the lifespan of gas lines are, but it seems that we paid for them once to be installed, so should part of the monies be covered by the manufacturer or PG&E?  Will developers be required to participate in a line-replacement fund surrounding new projects?

As these re-construction projects echo through California, I'd be curious to see how it affects our local real estate in the Bay Area.  Will the California Utilities Commission think of other ways to pay for this?

I think we all can agree that fixing these pipelines is a lasting solution for the future generations, but at what cost does it become burdensome to the California Tax Payer?

Your thoughts and comments are always appreciated.  In a future article, we will look at the land and building impacts of the potential BART line drilling through Downtown San Jose (underground).

Stay tuned.

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Comments

This absolutely unacceptable. PG&E is negligent for installing piping like that. Furthermore, if it was a real business, repairs like this would be planned for and money would have been put aside. Therefore it should come out their own pocket whether they get assistance from the manufacturer or not. 
 
This idea that the people should pay to compensate decreases in profit margins needs to end!
Posted @ Tuesday, October 18, 2011 7:36 PM by Ryan
I agree.....in our line of business, when we build town homes or condos, we set aside warranty funds to cover items that break over time....like a leaky window or appliances that stops working. In California, we're liable to cover these items for 10 years. This same approach should apply to this type of situation as well....thanks for the comment!
Posted @ Wednesday, October 19, 2011 1:02 AM by JB
Back in the 70's new homes were being built all over the USA. Labor costs were high and materials were cheap. The plastic pipe used for plumbing has failed. Most homes have had problems and have needed to replace plastic pipes or will need to replace in time (soon). PG&E jumped on the band wagon using cheap plastic piping to meet the demands of building all these new homes, and businesses. Now as we are becoming more aware this cheap plastic pipe needs to be replaced, it was just a matter of time, no surprise right?  
 
 
 
Should tax payers pay higher utility costs, and taxes to pay for it? No, we shoud not. We were not there when the materials contract went to the lowest bidder. Yet, we all know who is going to pay for this huge mistake, it's us. We will be paying higher heating costs for years to cover the costs, we will pay higher taxes on our homes for years to pay for this. Okay that is going to happen, but what really makes us upset as we know once we pay more to cover the costs at some poing the dept has been repaid, now will our taxes and rates go back down? NO once were used to paying this, we wont get a notice saying "Thank you for paying for our mistake, now your costs will go down, thank you". Our costs will never go back down. There will be other hikes instead. Tax payers and customers will continue to pay for everything.
Posted @ Wednesday, December 28, 2011 2:09 PM by Kathleen
I agree - this type of situation seems to be a catch 22 for the tax payers and customers alike.
Posted @ Thursday, December 29, 2011 9:23 PM by JB
Just saw this article in the Mercury News- official release from PG&E stating that customers should be on the hook to pay for all the $2B worth of pipeline upgrades: http://www.mercurynews.com/breaking-news/ci_20066205?source=rss
Posted @ Wednesday, February 29, 2012 12:18 PM by JB
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