From: Mayor Elizabeth Patterson
Sent: Thursday, August 9, 2018 9:32 AM
Subject: State Decides Not to Penalize PG&E for Major Valero Outage
My full statement to KQED was:
Without an Industrial Safety Ordinance residents and workers in Benicia are at risk because the CPUC cravenly fails to ensure that PG&E provide adequate training when working on power supply to Valero Refinery. Without an Industrial Safety Ordinance Benicia has no way to check on the adequacy and timeliness of PG&E training.
On top of that the city cannot require Valero to “power down” when major work is being done by PG&E. The CPUC fails to consider the public – the City of Benicia and its school district are the only public entities in the near catastrophic May 5th PG&E power outage at Valero Refinery. The Public Utilities Commission fails to consider the city in its investigation. There was no effort to determine the costs to the city for opening and operating the Emergency Center; no cost for deploying our police and fire personnel; no cost for all staff on deck for the entire episode; no cost for the loss of public trust . No effort to determine the costs to the BUSD for shelter in place. No effort to determine the cost to loss of business in the Benicia Industrial Park. Without the ISO the City of Benicia could not present this information to the CPUC. Sleeping on the “Public” of the CA Public Utilities Commission does not extinguish the need for Californians’ access to safe and reliable utility infrastructure and services.
Mission Statement: The CPUC regulates services and utilities, protects consumers, safeguards the environment, and assures Californians’ access to safe and reliable utility infrastructure and services.
CPUC Investigation Conclusion:
My [CPUC] investigation found that PG&E violated General Order 174, Rule 12 because: 1) PG&E failed to maintain the CCTV for its intended use and also2) PG&E failed to provide adequate training, documents, or diagrams for its operators to identify the CCVT as part of the anti-islanding protection scheme since the documents, diagrams, and training on the protection scheme did not provide enough clarity on the activation conditions and how they relate to the failed CCVT.
The commission concluded that PG&E’s inadequate training of operations personnel and slow response to the failure of an electrical component led to the May 5, 2017, outage, which triggered a major release of toxic sulfur dioxide and prompted emergency shelter-in-place orders in Benicia.
But the state agency — at this point — does not plan to penalize the company.
“PG&E has agreed to take corrective actions that, in CPUC staff’s opinion, would prevent a recurrence of the problems,” commission spokeswoman Terrie Prosper said in an email.
“SED (The CPUC’s Safety and Enforcement Division) does not plan to issue a citation with penalties at this time, but will monitor to ensure that PG&E addresses the problems sufficiently and in a timely manner,” Prosper said, adding that if things change, the commission could reopen the probe and cite the utility.
The CPUC’s decision did not sit well with the area’s elected leaders.
“I think it’s outrageous,” said state Sen. Bill Dodd (D-Napa), who represents the area. “Not only continually has PG&E’s safety protocols been called into question, but now this leads me to call into question the oversight of the California Public Utilities Commission.”
Dodd plans to send a letter to CPUC President Michael Picker in the coming days, expressing outrage over the agency’s decision.
“They clearly violated the law,” said state Sen. Jerry Hill (D-San Mateo), a longtime critic of PG&E, in an interview Thursday.
“To give them a pass certainly does not bode well for the change in culture and policies and prioritization at the PUC where safety is supposed to be paramount,” said Hill, who’s been pushing the commission to be a stricter regulator of PG&E since the 2010 San Bruno pipeline explosion.
“It indicates a systemic problem with PG&E,” he said. “The CPUC should do its job, enforce the law and cite PG&E.
Benicia Mayor Elizabeth Patterson, who has been pushing for the city to have more oversight over the refinery, said the CPUC’s decision means it failed to consider that the city was gravely affected by the outage.
“Residents and workers in Benicia are at risk because the CPUC cravenly fails to ensure that PG&E provide adequate training when working on power supply to the Valero refinery,” Patterson said.
The mayor says the commission should have considered fining PG&E for costs associated with the city’s opening of its emergency center and the work its police and firefighters did the day of the outage, among other sacrifices Benicia made in dealing with the refinery accident.
The Valero shutdown led to several government investigations, a brief increase in gas prices and a lawsuit by Valero against PG&E.
The CPUC said a lack of training and unclear company documents led PG&E workers to misunderstand the importance of a key piece of equipment that went down before the outage.
Valero, when asked to comment on the commission’s decision, reiterated that blame was on PG&E for the entire episode.
“We agree with the CPUC report, which found that PG&E violated state regulations and is solely responsible for the May 5, 2017 power outage,” company spokeswoman Lillian Riojas said in an emailed statement.
“PG&E must take the necessary corrective actions to prevent this from happening again,” Riojas said.
PG&E disputes the CPUC’s findings and continues to blame Valero for the incident, but says it’s taking steps to prevent a similar problem.
“Since this incident, we have completed several corrective actions … including adding alarms and alerts, regularly reviewing work processes and making changes to verification status of protective systems and holding regular refresher trainings for operators,” said Deanna Contreras, a PG&E spokeswoman, in a statement.
CPUC Probe Says PG&E Mistakes Led to Benicia Refinery Outage
By Ted Goldberg, Jul 19, 2018
State regulators say that PG&E’s inadequate training of operations personnel and its slow response to the failure of an electrical component led to a power outage at a Benicia oil refinery last year.
The 18-minute power failure early the morning of May 5, 2017, disrupted operations at the Valero refinery, triggered a major release of toxic sulfur dioxide and prompted emergency shelter-in-place orders.
Fallout from the incident has included several government investigations, a brief increase in gas prices, a push for Benicia to impose its own oversight of the refinery and a lawsuit filed by Valero against PG&E.
PG&E says it rejects the conclusions of the California Public Utilities Commission investigation into the outage and maintains that the oil company is responsible for the incident.
The CPUC investigative report, completed in April and released to KQED after a California Public Records Act request, lays out the events that began the day before the power failure. The document also outlines the complex way the Valero refinery is tied into PG&E’s electrical network — and how workers’ misunderstanding of the connection led to the outage.
The report says the sequence of events that led to the outage began May 4, with a transformer failure at a substation adjacent to the refinery.
The CPUC report says that the PG&E operator who detected the problem reviewed company diagrams and documents and concluded the transformer issue would not affect a safety system designed to protect the refinery if it’s disconnected from the utility’s electrical network.
The safety system is necessary because the refinery generates part of the electricity it needs from an on-site power plant. The system, known as “anti-islanding” protection, is designed to prevent electricity from flowing out of the refinery. The protection scheme is designed to kick in if both of the major PG&E transmission lines to the utility’s Benicia substation suffer major problems or are taken offline simultaneously.
Early the morning of May 5, the CPUC report says, PG&E operators at the substation de-energized one of the transmission lines as the first step in a long-planned maintenance operation. Cutting power to the transmission line, along with the previously discovered transformer failure, activated the anti-islanding system. Power to the entire Valero facility went down.
The CPUC investigation incorporates findings from Exponent, an engineering firm PG&E hired to analyze the incident.
Exponent found that the PG&E operator who first noticed the transformer failure did not understand that it could play a part in triggering the anti-islanding system.
The engineering firm noted that the PG&E’s document describing the system “is perceived by operators to be unclear on conditions necessary to activate the scheme, the instrumentation equipment … that the scheme depends on” and other key information.
Exponent recommended a series of safety measures — including improved training and maintenance procedures and the use of warning devices to alert operators of potential problems with the anti-islanding system — to prevent future incidents.
The CPUC’s investigation concluded that PG&E violated a state regulation that requires electrical substations to be operated and maintained safely and in a manner to provide adequate service.
In addition to failing to maintain the transformer involved in the incident, the CPUC said,”PG&E did not provide adequate training, documents, or diagrams for its operators to fully understand the anti-islanding protection scheme. If the … substation operators had sufficient training and documentation on the anti-islanding protection scheme, they would have properly identified and resolved the failed (transformer issue) and prevented the incident from occurring.”
On Wednesday, PG&E spokeswoman Deanna Contreras reiterated the company’s earlier apologies for the outage, but said it does not agree withthe CPUC’s findings. The utility has maintained the electrical failure was Valero’s fault.
“PG&E denies the CPUC’s specific allegations that we failed to maintain a type of transformer for its intended use and that we failed to provide adequate training, documents or diagrams to operators,” Contreras said in an emailed statement. “Additionally, PG&E maintains that the responsibility for the unplanned refinery shutdown rests with Valero.”
Two previous probes, by Solano County and state workplace regulators, cleared Valero of wrongdoing.
Contreras added that PG&E is adopting Exponent’s safety recommendations.
Steven Weissman, a lecturer at UC Berkeley’s Goldman School of Public Policy and a former CPUC administrative law judge, said the company should aggressively implement those measures.
“It’s going to want to be responsive to this,” Weissman said.
A Valero spokeswoman declined to comment on the CPUC report, citing its pending litigation.
But earlier this week, a Valero executive told the Benicia City Council that the refinery and PG&E are working out new rules aimed at preventing a repeat of the 2017 incident.
“We want to limit the number of times PG&E is sticking a screwdriver into the wires that supply our refinery,” Rich Walsh, vice president of Valero’s regulatory and environmental law programs, told council members on Tuesday.
The new protocols would require PG&E crews to consolidate their maintenance work on the electricity lines that serve the refinery into shorter time periods and allow Valero to inspect PG&E equipment before those jobs, among other changes.
In Wake of Valero Refinery Incident, Benicia Weighs Whether to Pursue Safety Ordinance
By Ted Goldberg, Jun 18, 2018
Thirteen months after a major air-pollution incident at Valero Energy Corp.’s Benicia refinery, city leaders will decide whether to assume more oversight of the facility.
On Tuesday, the City Council plans to decide whether to direct staff to begin developing an industrial safety ordinance that would require Valero to pay for a set of air monitors, submit a safety plan to the city and provide Benicia with reports on serious refinery malfunctions.
The issue is the latest to pit Benicia Mayor Elizabeth Patterson, other city officials, environmentalists and some residents against the San Antonio-based energy company, which is the city’s largest employer and taxpayer.
“The space for the city is to be at the table and not be kept in the dark,” said Patterson.
The outage sent flames and black smoke into the sky, leading to shelter-in-place and evacuation orders. At least a dozen people sought medical attention for breathing difficulties. It took weeks for the refinery to return to full operations, and analysts said the incident prompted a rise in the state’s gasoline prices.
Patterson says that since the outage, neither Valero nor regulators have given the city detailed information about the incident.
For instance, city officials learned from KQED, not from Solano County, that county environmental health investigators concluded late last year Valero did not violate state regulations in connection with the accident.
“We don’t get those reports,” said Patterson in an interview last week. “We never did get a presentation by any state or regional agency, let alone Valero, about what had happened.”
“The public has a right to know,” she said.
Valero has consistently opposed a city safety ordinance, which would be modeled after those used in Richmond for the Chevron refinery and in the rest of Contra Costa County for the Shell, Phillips 66 and Andeavor (formerly Tesoro) facilities.
“We believe you will see there will be no need to pursue a duplicative and divisive Benicia Industrial Safety Ordinance,” Donald Cuffel, the refinery’s director of health, safety, environmental and regulator affairs, wrote in a letter to the City Council late last month.
Cuffel argued state and county agencies, as well as the local air district, already have similar regulations in place.
Last October, California officials approved rules similar to Contra Costa County’s ordinance for refineries statewide.
That prompted Solano County’s Department of Resource Management to spend close to 500 hours inspecting, reviewing and documenting the Valero refinery, according to Benicia city staff.
Currently, neither the Bay Area Air Quality Management District nor Benicia have air monitors in place to measure air quality after refinery accidents. Air district officials say they rely on monitors in nearby cities to gauge Benicia’s air quality.
Patterson’s proposal calls for Valero to pay for monitors to be placed throughout Benicia’s residential and industrial areas as well as on the refinery’s fence line. Data from those devices would be placed on a website.
Last week the regional air district approved a fence-line air monitoring plan by Valero, according to agency spokesman Tom Flannigan. The refinery has one year to install the devices.
The district is in the initial phases of looking for a location for a community air monitor, said Flannigan.
Iron Workers Local 378, which represents some of the refinery’s workers, is also opposed to the safety ordinance, calling it a “duplicative, outdated, go-it-alone strategy.”
“A local ISO won’t make sure our workers, trainees or this community any safer,” Jeff McEuen, the union’s business manager, financial secretary and treasurer, wrote in a letter to the City Council last week.
But a group brought together after last year’s refinery outage to develop safety reforms says the law is needed.
“This is a signature moment for Benicia, as it will signal whether the City Council puts the health and safety of Benicia, its citizens and community members over the Valero refinery’s ‘just trust us’ stance to its industrial safety record,” said Constance Beutel, a member of Benicia’s ISO Working Group.
At least one other member of the council sees the proposed ordinance as a way for the city to get information more quickly when the next refinery accident takes place.
“There is a problem with getting sufficient information out in a timely manner,” said Vice Mayor Steve Young. “There is a need for greater transparency.”
Young noted that the conflict over an industrial safety ordinance is the biggest between city leaders and Valero since the council rejected the company’s oil-by-rail proposal in 2016.
Councilmembers could either direct city staff to draft an ordinance that the council would vote on in the coming months, or the city could continue to rely on Solano County’s work in employing the new state regulations.
Meantime, the California Public Utilities Commission expects to complete its investigation of the refinery outage this summer, according to Garrett Toy, a CPUC lawyer.
Valero sued Pacific Gas and Electric after the incident, seeking $75 million for damage to refinery equipment and lost revenue. The company blames PG&E for the episode and claims it “shut off all electricity” to the refinery the day of the outage.
PG&E hired a third party engineering firm, Exponent, to review the outage. The company submitted that report to the CPUC. Both PG&E and the commission have declined to release that report.
Valero’s lawsuit is expected to go to trial next year.