1. Transparency and Pipeline Safety Lessons from San Bruno on the Relationship between Regulators, the Regulated and the Public May, 2015

2. “I have struggled with pipeline safety for five years, and we have made very little progress. The system is fundamentally broken..” – Rep. Jackie Speier

3. Where We Started On September 9, 2010, a PG&E gas pipeline ruptured, unleashing one of the worst gas pipeline explosions in U.S. history. Emergency personnel rushed to the scene not knowing the source of the blast. Took 1+ hours to confirm source of fire was a gas pipeline – initially suspected airplane, earthquake Took PG&E 95 minutes to stop the flow of gas and isolate the affected site When Unsuspecting Tragedy Strikes

4. Multiple Investigations Revealed Troubling Root Causes of Explosion  National Transportation and Safety Board (NTSB) investigation  California Public Utilities Division of Safety and Enforcement investigation  Conclusion: Preventable tragedy caused by gross negligence, faulty record keeping and negligent oversight by PG&E and CPUC

5. NTSB’s Unsettling Conclusions in 2011 Set the Stage for Additional Discoveries Utility Company -Faulty pipeline welds -Incomplete records -Inadequate inspections/tests Regulator -Failed to regulate -Too cozy relationship with PG&E -Violation of CA transparency laws -Violation of Rules of Practice and Procedure - Federal and State investigations of largest public corruption scandal in modern CA history

6. Regulatory Penalty Proceeding Quickly Uncovers More Questions Than Answers San Bruno uncovers disturbing revelations and a complete lack of transparency Ethical violations and widespread conflicts of interest Troublesome delays Broken system in need of reform

7. Holding the Regulator and Utility Accountable City is forced to maintain a vigilant watch and keep process in public eye Initial penalty recommendation riddled with credits and tax benefits Ongoing recordkeeping errors led to additional $14 million fine for incident in neighboring city Public awareness is raised when audit shows utility has faulty records for 50% of gas pipelines

8. Public Records Lawsuit Documents Regulatory Corruption Following 10 months of unanswered Public Records Act requests, San Bruno files a public records lawsuit in February 2014 Led to exposure of 7,000 emails demonstrating illegal and ex parte (private) communication between PG&E and the CPUC PG&E self-reported additional violations of rules

10. Unsettling Discoveries Emails reveal PG&E had no idea what ticking time bombs lay underground in 2010

11. Demand for Transparency Leads to Reform Criminal Investigations Both Attorney General, U.S. Attorney are investigating illegal communications San Bruno’s actions have resulted in multiple criminal investigations CPUC must also establish and comply with new rules for public records requests as a result of San Bruno’s public records lawsuit

12. Additional Outcomes  New Commission Code of Conduct  Critical PHMSA audit will spur reform  Acknowledged unfair access by utilities to CPUC  Erosion of agency’s safety programs  CPUC will make important changes  Separate investigations into the email scandal and PG&E’s lack of safety culture On April 9, 2015, the CPUC approved a $1.6 billion penalty fine against PG&E for the 2010 explosion and fire – the largest recorded penalty in CPUC history.

13. Praise for Demanding Transparency “The city stood up for all Californians in demanding a clearer picture of the cozy relationship between the utility and the regulatory agency under Peevey's leadership.” “The communications were released in the wake of a demand by San Bruno authorities…..It’s a start on a long journey to instill a new ethic at a state agency that’s lost its way.” “TURN, City of San Bruno, CCSF, and DRA have all actively participated in these proceedings and have contributed substantially to our decisions on violations, as well as this decision.” - Administrative Law Judges, CPUC

14. Lessons from the Tragedy in San Bruno Local authorities must step up to prevent the ‘business-as-usual’ regulatory mentality Advocate for more transparency, better public access to records, decisions Push for a performance-based regulatory model Better balance of competing policy considerations – ratemaking vs. safety Hold utilities fully accountable for making safety the top priority San Bruno is not an isolated case. Similar collusion may be happening in communities across the United States. The buck stops locally because, as Rep. Jackie Speier said, national regulator PHMSA is a “toothless tiger.”

15. Preparing for Emergency Public officials and public safety responders should become familiar with local utility operators’ safety plans Share information and develop a coordinated emergency response plan Participate in a disaster preparedness exercise Pipeline emergencies strike without notice. Local authorities should be prepared.

16. Public Transparency Seek out important information about local pipelines Communicate with local utility regulators and operators Review city franchise agreements Aging infrastructure means ticking time bombs may be lurking beneath communities nationwide. Public officials need to know what’s beneath their cities.