Even as Pacific Gas and Electric Co. faces ongoing criticism for its assertion that 1950s hydrostatic testing partially caused a deadly 2010 pipeline explosion, the company said it is working toward becoming one of the top gas utilities in the country, laying out its Gas Safety Plan for the coming years.

"What we filed today is PG&E's roadmap to becoming one of the nation's safest gas utilities," Nick Stavropoulos, executive vice president of gas operations, said in a statement. "We can hand this document to commissioners with confidence and say that it represents input from all levels of gas employees as well as direction from the National Transportation Safety Board, outside experts, industry associations and other regulators."

The PG&E Corp. subsidiary estimated that its gas organization will grow by approximately 1,400 people by the end of 2014 to support its focus on safety and compliance, the company wrote in its filing to the California Public Utilities Commission. To improve employee preparedness, PG&E also plans to build an advanced training facility, slated for completion in 2015, to provide employees with hands-on and "real world" learning experiences. The company is also developing improved training programs, curricula and materials. It will improve roughly 100 courses between 2012 and 2016, including hydrostatic testing training, inline inspections and construction work procedures.

The improved training will be part of the PG&E Corp. subsidiary's effort to develop a culture of safety among its employees. In addition to the training programs, the company said it is working to establish a system-wide safety strategy, promote more visible and consistent safety messages from leaders, improve data-gathering systems and increase its emphasis on learning from safety incidents, with less reliance on discipline to help eliminate a fear-based climate.

But The Utility Reform Network, or TURN, questioned PG&E's methods of determining what work needs to be done and said the company's plans are more remedial than proactive.

"If you fail to keep adequate records, then you basically put the whole system in question," TURN spokeswoman Mindy Spatt said July 6. "Because they have no records, the whole thing is kind of a crapshoot. You're just shooting in the dark for what you need to fix and how dangerous it is."

Spatt also took issue with another recent filing from PG&E stating that a 1956 hydrostatic test contributed to the deadly 2010 San Bruno pipeline rupture. Because there are no records of such a test and because PG&E cited a former employee's memory of hydrotesting as part of its testimony, Spatt said she is worried about PG&E's ability to discern whether other pipes from that era had been similarly affected.

"Customers would like to see something more organized than [what] a former employee might remember," Spatt said. "Does PG&E have any way of knowing if other pipes are damaged? Does anyone else remember pipes being tested in a way that could have damaged them but they failed to write down? We're not talking about a small detail here - we're talking about a major, major issue, and the best they can offer is, 'someone might remember.'"

The Gas Safety Plan is not working toward new standards or new rules, Spatt said, but instead is making up for PG&E's lack of compliance with basic standards.

But PG&E said in the statement that the report shows the company emphasizes safety first, and it argued that it is already making significant progress toward its safety goals.

"Becoming one of the nation's safest utilities isn't some pie-in-the-sky idea. The monumental progress we've made over the past two years shows we know how to get things done. Our Gas Safety Plan proves we know what more we need to do," Stavropoulos said. "We've got our eye on that target, we're acting with urgency and we don't plan to let up."

In its plan, PG&E also noted that it will need to be on the lookout for cover-up and fraud, and it will focus greater attention on maintaining a qualified workforce and coordinating its emergency response. The company will also be auditing and documenting outsourced work activities, and more closely overseeing the safety and compliance of subcontractors in areas such as the drug test laboratory.

But while employee accountability and culture is essential to improving the gas business's safety, the company noted that the gas infrastructure and the safety processes also require attention. Prioritizing higher-risk activities is essential, PG&E said in its plan, and the recently established Gas Operations Risk and Compliance Committee will be tasked with identifying, assessing, monitoring and mitigating risks as they arise.

Over the next three years, the company plans to update standards and work procedures with changes that go "well beyond" minimum compliance, the company said. It plans to build a comprehensive controls framework to change its control room from monitoring and reactive to predictive and proactive, PG&E wrote. The distribution system is currently monitored in a way that requires manual intervention in the field, which creates a lag between information collection and response time and also limits real-time visibility. To remedy this problem, PG&E plans to install roughly 900 monitoring and control devices in 2012 and 2013, along with 3,400 more from 2014 through 2016.

PG&E aims to have its field monitoring provide 95% visibility, 20% control of the distribution network and 100% control over critical facilities.

The Gas Safety Plan depends on the CPUC's approval of PG&E's Pipeline Safety Enhancement Plan, being looked at in a separate proceeding. If approved, the program requires pipeline modernization, valve automation, pipeline records integration and validation of the maximum allowable operating pressures of all of its transmission lines.

Copyright 2012 SNL Financial LC. All Rights Reserved.

(Originally published July 9, 2012, in SNL Daily Gas Report.)