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Accounting Control Fraud Can Be Deadly


It's long been known in Northern California that Pacific Gas & Electric Co. is not above taking advantage of their state-sanctioned monopoly. Even though rates here are the highest in the state and among the highest in the country, service generally sucks and, lately, outages seem to be more frequent and of longer duration.

Now we can measure the cost of deferring maintenance in human lives.

Three years ago, Pacific Gas and Electric Co. asked state regulators for $4.9 million to replace a portion of the same natural gas pipeline that ruptured last week and set a San Bruno neighborhood on fire.

State regulators agreed, and the work was scheduled to be done in 2009. The price became part of the rates all PG&E customers pay.

But the pipeline replacement - in South San Francisco, a few miles north of last week's blast site - never happened.

What happened to the earmarked rate increase?

Mike Florio, senior staff attorney for The Utility Reform Network,

said it's often hard to track where money not spent on deferred maintenance goes. But PG&E, he said, had to spend $103 million in the last three years redoing a leak-detection survey of its natural gas distribution network that had been marred by record falsification and sloppy work. The company also spent, last year, about $62.5 million more than anticipated on employee bonuses, he said. Perhaps some of the money, Florio said, went there.

At least we know where $2.14 million went.

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Submitted by Hugh on

When I read this the first thing I thought of was BP, a fly by night company if ever there was one, and the way it cut maintenance as a policy resulting in the oil spill in Alaska, the deadly refinery fire in Texas City, Texas, and the Gulf blowout. The second is how much of what goes wrong in our country can be traced back to various forms of looting. Pay bonuses rather than fix pipes. Oops, there goes a neighborhood, who could have predicted?