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Calif. Utility PG&E Got Insider's Warning About Aging Transmission System

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    PG&E Got Insider's Warning About Aging Transmission System

    Back in 2007, PG&E hired a low-key outsider, Ed Salas, to help assess the risks it faced. Although he lacked engineering experience, Salas had a background evaluating corporate risks in the telecommunications industry. When he got to the utility, Salas soon realized the enormity of his task. Jaxon Van Derbeken reports. (Published Tuesday, Aug. 27, 2019)

    Back in 2007, PG&E hired a low-key outsider, Ed Salas, to help assess the risks it faced.

    Although he lacked engineering experience, Salas had a background evaluating corporate risks in the telecommunications industry. When he got to the utility, Salas soon realized the enormity of his task.

    In the notes he took while being briefed on how it was assessing risks, he said it was clear "almost everything [was] broken” at the company and cited an immediate “need to triage.”

    Salas testified at a civil deposition in 2012 that he decided rather than look at everything, he would focus on the most dramatic risks the company faced. He assembled a team and began to brief the company's highest executives, culminating with his system-wide "enterprise risk management" report in July 2010.

    As a senior vice president, Salas was the designated “risk owner,” responsible for making sure the company made the changes needed to avoid catastrophes. One risk he identified was an unexpected pressure surge on one of PG&E's aging gas lines. It posed the risk, according to internal assessment obtained by NBC Bay Area’s Investigative Unit, of a massive explosion that would cost $500 million. The company gas records were shoddy, he warned, and it was simply ill-equipped to assist emergency crews in responding to such a disaster.

    Just two months later, one of those lines in San Bruno exploded – an incident that cost $500 million in civil settlements alone, with a $1.6 billion regulatory penalty and a scathing NTSB report that cited the company's faulty records and inept emergency response, noting it took some 90 minutes for crews to finally shut off the gas.

    But that was not the only disaster Salas had warned about.

    In the stilted, unemotional language of his section dealing with its high voltage transmission network, Salas identified a potential catastrophic risk of “fires caused by aged equipment failure that PG&E had not taken timely action to replace.”

    Eight years later, the prophesy came true with the most destructive wildfire in state history, the Camp fire that devoured the town of Paradise and left 85 dead.

    The origin has been traced to an aging hook on a nearly 100-year-old transmission tower that PG&E hadn't rigorously inspected for more than a decade. Just like Salas had predicted in his report.

    “It was a terrible risk,” said Robert Cagen, a retired attorney for the state’s Public Utilities Commission. “They should have heeded their own warning, and they did not.”

    As Salas left the company, he said he wrote top management in frustration. He recalled in a deposition in 2012 that he felt like a “permanently disabled wounded soldier” who was scapegoated for having identified problems the company still faced. "I played a crucial role in identifying several of these problems and have made strong recommendations on how they can and should be addressed,” he said in his emailed letter to then CEO Peter Darbee and President Chris Johns. Both soon were out of the company as well.

    In a chart, Salas and the team warned the executives that the company was “weak” in key areas of its transmission system.

    Like not replacing aging cables that can easily spark wildfires. Also, the company was weak in doing the detailed material reports and engineering analyses needed to learn lessons that could stave off disasters.

    One of the executives who stayed on with the company from that time was Geisha Williams, who was CEO during the Camp fire.

    The same year Salas briefed top executives of the doomsday scenarios -- a consultant with Quanta, an outside engineering firm, urged comprehensive climbing inspections to assess the state of its oldest transmission towers.

    Quanta specifically called for PG&E to focus on transmission towers that were 80 years or older, like those remaining on the 56-mile long Caribou Palermo line, which was built in 1921.

    PG&E records reviewed by NBC Bay Area’s investigative unit, however, show that as of 2017, the utility continued to rely on helicopter patrols and periodic visual checks by ground-based crews, not the more expensive effort of climbing its towers -- even when five towers collapsed on the Caribou-Palermo line in the winter of 2012.

    Internal emails from 2014, indicate that PG&E insiders knew the temporary wooden poles used to replace the fallen towers were themselves at high risk of failure, but engineers believed any failure of those poles would most likely occur in a winter storm and did not pose a fire risk.

    The company did not replace them until 2016.

    An accounting of the towers PG&E generated in 2017, however, does not mention the 2012 collapse –nor what led three other towers to fail in the first part of 2017. Instead, the accounting of 47,000 steel structures highlights the failure of the Moss Landing tower as being the only failure between 2011 and 2016.

    Today, PG&E disputes that it failed to analyze the reasons for the five tower failures.

    The chart at the end of the 2017 report indicates the company had adopted a “run to failure” strategy for transmission structures considered at low and medium risk –with no planned maintenance. For older, higher risk towers, the chart calls for more patrols and engineering protections, but only “min[imum] req[uired] maintenance.” The strategy did not set out a plan to carry out the intensive climbing checks Quanta had called for back in 2010.

    The focus was to be on coastal towers, which could be expected to last only about 80 years in service, while towers in valley and mountainous areas could last 100 years or more. The 2010 Quanta report indicated, however, that all towers approaching 100 years old -- no matter the location – were at high risk of component failure.

    In the months before the fire, PG&E recently acknowledged it started to carry out the climbing inspections on some of its oldest towers, including 80 structures on the Caribou-Palermo line. Some were done just days before a worn C-hook failed, triggering the fire. But the nearest inspected tower was seven miles away, the company said recently.

    PG&E recently told a federal judge that despite age, its transmission lines accounted for just a tiny fraction of all wildfires in the years before the Camp fire disaster.

    And in a statement, the company said it has spent hundreds of millions on line preventative work, a category of work that supports the replacement of overhead conductors and devices on transmission structures operating at voltages from 60 kV to 500 kV.

    “PG&E determines repair and replacement priorities for transmission assets based on a variety of factors, including but not limited to age. Among the factors that PG&E considers beyond asset age are public and employee safety, system criticality, customer impact, asset health, maintenance records, inspection history, and operational considerations.”

    The head of the company at the time of the last-minute inspections, Geisha Williams, left when the company filed for bankruptcy.

    As for Salas, whose report predicted two disasters, he took his $1 million PG&E severance – which came with a non-disclosure agreement that has left him publicly silent about his experience -- and started a church. He now lives in Southern California.

    The former CPUC attorney, Cagen, says he’s convinced the Camp fire could have been avoided if PG&E had heeded Salas’ warnings. He said not acting “cost the people of Paradise 85 lives…and it’s a terrible thing -- and I think the survivors and their loved ones deserve a straight story.”