Rodger R.

Schwecke
Senior Vice President
Gas Operations & Construction
555 W. 5th Street, M.L. GT-21C3
Los Angeles, CA 90013-1011
Tel: 213.244.2140

January 14, 2020

Commissioner Randolph
President Batjer
Commissioner Guzman Aceves
Commissioner Rechtschaffen
Commissioner Shiroma

RE: Proposed Decision on Petition for Modification, Application 15-09-013

Dear Commissioners,

San Diego Gas & Electric and Southern California Gas Company (jointly, the Utilities) urge the
Commission to adopt the Alternate Proposed Decision of Commissioner Randolph Approving
Limited Modifications to Decision 18-06-028 (Alternate) and to reject the Proposed Decision of
Administrative Law Judge Kersten Approving Modifications to Decision 18-06-028 (PD).
The Alternate affirms the Commission’s commitment to public safety by upholding the
Commission’s decision in D.18-06-028. That Decision required the Utilities to submit to the
Commission’s Safety and Enforcement Division (SED) a Line 1600 Test or Replacement Plan
that includes at least two options: one to pressure test the entirety of Line 1600, and one to
replace portions of Line 1600 located in more populated areas (known as “high consequence
areas” or “HCAs”) and pressure test the portions of Line 1600 located in less populated areas.
All of the options in the plan were to be supported by best available cost estimates at the time.
The Decision further reaffirmed SED’s existing authority over the Utilities implementation of
their Pipeline Safety Enhancement Plan (PSEP) and expressly delegated authority to SED to
approve the Utilities’ Line 1600 Test or Replacement Plan.
The Utilities complied with the requirements of D.18-06-028 and developed a Line 1600 Test or
Replacement Plan in coordination with SED that evaluated four options, including the two
options expressly required by the Commission in D.18-06-028. The Utilities proposed, and SED
approved, a plan to replace the pipeline in more populated areas and test the pipeline in less
populated areas. Consistent with the Commission’s commitment to public safety and prior
direction in D.11-06-017 OP 4 (“The Implementation Plan should start with pipeline segments
located in Class 3 and Class 4 locations and Class 1 and Class 2 high consequence areas, with
pipeline segments in other locations given lower priority for pressure testing.”), as well as the
PSEP prioritization process approved by the Commission in D.14-06-007, the Utilities
prioritized sections located in more populated areas ahead of segments located in less populated
areas. If the Commission adopts the Alternate, construction on the first high priority Line 1600
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safety enhancement project, located in a densely populated location adjacent to residences,

businesses and other places where communities gather, will begin this month.
The Alternate also upholds the Commission’s longstanding position that a Petition for
Modification may not raise issues that should have been raised in an Application for Rehearing,
and is an “extraordinary remedy” that requires a “material change in fact or condition” to depart
from “the standard that settled expectations should be allowed to stand undisturbed.” 1 No
Petitioner filed an Application for Rehearing challenging the Commission’s order in D.18-06-
028 to consider a “replace in HCAs” option for Line 1600, or identified a material change in the
facts or conditions that led the Commission to require the Utilities to consider this option.
Because Petitioners failed to raise this issue in a timely or procedurally proper manner, the
Commission may deny the Petitioners’ Petition for Modification on this ground alone.
In contrast, the PD would expressly halt construction of Line 1600 safety enhancement projects,
reverse D.18-06-028, and reopen the proceeding to relitigate issues already litigated in the
proceeding and second-guess SED’s determination. The proceeding would require the parties to
relitigate which Line 1600 options meet the safety, capacity and reliability needs of over 3.2
million San Diego County residents, 30,000 commercial and industrial customer meters, electric
generation facilities, military installations, schools, and hospitals.
The safety of our customers, employees and communities we serve is paramount. Pressure
testing the entirety of Line 1600, an alternative not proposed by the Utilities nor approved by
SED, would not address Line 1600’s safety risks. The SED-approved Plan for Line 1600 will
enhance public safety and system reliability by replacing 1949-era pipe located in populated
areas that was constructed using non-state-of-the-art fabrication and construction methods. The
existing 70-year-old pipe poses risks that would be eliminated if replaced by new pipe
constructed to modern standards, including: (1) the longer-term risk of potential failure caused
by known flaws in the pipe’s long seam arising from the method used to manufacture the pipe,
and (2) the lack of fracture control inherent in the existing pipe, which makes catastrophic
rupture from an initiating event (e.g., “dig-ins,” wall loss, external forces, etc.) more likely.
Pressure testing would not address either risk. Thus, if the existing pipe passes a pressure test
and is returned to service, these two risks will remain.
Through their Petition for Modification, Petitioners seek to re-litigate the Commission’s decision
in D.18-06-028 to require the Utilities to consider a “replace in HCAs” option to enhance the
safety of Line 1600. In an ex parte notice filed following meetings with Commissioners’ offices,
Protect Our Communities Foundation (POC) asserts that “the A.15-09-013 record conclusively
showed that neither hook cracks nor seam corrosion are safety threats on Line 1600,” that
inspections will ensure safety, and even claimed that hook cracks are a “mark of quality.” 2 To
the Utilities’ knowledge, POC has not engaged the services of a pipeline expert, did not present

1
D.17-12-006 at 12, 14; D.15-09-001 at 3-4.
2
Notice Of Ex Parte Communication of Sierra Club, The Utility Reform Network, Southern California
Generation Coalition, and Protect Our Communities Foundation (12/16/2019) at 3.
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testimony by a pipeline safety expert in this proceeding, and is not itself an industry expert on
pipeline safety. The record evidence is directly contrary to POC’s statement. 3
The Utilities’ concerns regarding the safety risks posed by hook cracks is not based solely on the
opinion of the Utilities’ experts. SED informed POC that “SED believes that presence of hook
cracks in the long seam in a high pressure gas pipeline is a very serious integrity threat that must
be addressed.” 4 In addition, a Federal Pipeline and Hazardous Materials Safety Administration
(PHMSA) database shows numerous events where pipe manufactured by this particular
manufacturer (A.O. Smith) using this particular manufacturing method (electric flash welding
(EFW)) has ruptured. 5
On the pipeline integrity issue, POC stands alone. Petitioners Sierra Club, Southern California
Generation Coalition and The Utility Reform Network’s Reply Comments on the PD present a
new recommendation—that the Commission “should take immediate action to reduce the MAOP
of Line 1600 from the current 512 psig to 320 psig to eliminate the potential for a catastrophic
rupture and explosion on Line 1600.” 6 While the Utilities appreciate Petitioners’ expressed
concern for safety, such a step would not be prudent. Previous reductions in the MAOP from
800 psig to 512 psig already have enhanced the safety margin in the short term. While dig-ins
remain a top risk to the integrity of underground pipelines despite above-ground warning signs,
the impact of reducing Line 1600’s pressure to 320 psig would be to degrade the capacity and
reliability of SDG&E’s natural gas system, as well as impact customers directly connected to
Line 1600 that require higher pressure for their facility operations.
The Utilities also note that recent revisions to the PD would direct the Utilities to begin
permitting and hydrotesting work this quarter, which is not feasible. In reliance on D.18-06-028
and SED’s approval of the Line 1600 Test or Replace Plan, the Utilities moved forward
expeditiously to construct the four highest-priority replacement projects, located in densely
populated areas, in 2020. If the Commission directs the Utilities to reprioritize projects in less
populated areas ahead of those in populated areas, the Utilities will need to reassign personnel
from the higher priority projects to initiate the detailed design, planning and engineering work
necessary to construct these pressure test projects in less populated areas, obtain any applicable

3
Mr. Rosenfeld, one of the nation’s foremost pipeline experts, testified: “The Utilities have confirmed
the presence of seam manufacturing defects in the form of hook cracks. Enlargement of hook cracks in
service have caused failures in other pipelines. It is likely that the in-line inspection the Utilities have used
to detect the hook cracks cannot detect all such defects of interest.” Exh. SDGE-12 (Supp. Testimony at
130:14-131:11) (emphasis added; footnotes omitted); see also Exh. SDGE-12 (Supp. Testimony,
Attachment C); Exh. SDGE-2 (Sera Prepared Testimony at 4:7-12).
4
SED Response To POC’s January 8, 2018 Data Request, unnumbered pages 1, 3).
5
https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/inspections-and-
investigations/17886/texasgastransmissionllc20150909.pdf; see also https://www.phmsa.dot.gov/data-
and-statistics/pipeline/distribution-transmission-gathering-lng-and-liquid-accident-and-incident-data;
https://www.ntsb.gov/investigations/accidentreports/pages/PLD19FR002-preliminary-report.aspx.
6
Sierra Club, Southern California Generation Coalition, and The Utility Reform Network Reply
Comment on the Revised Proposed Decision Of Administrative Law Judge Colette E. Kersten
(12/23/2019) at 1.
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permits, take steps to ensure continuity of gas service to customers served directly from the
tested line segments, and line up necessary contractors and resources.
The Utilities respectfully request the Commission uphold its resolute commitment in D.11-06-
007 at 17 to “improve the safety of natural gas transmission pipelines,” by adopting the
Alternate, which authorizes the Utilities to proceed with critical Line 1600 safety enhancement
work in densely populated areas, while reopening the proceeding to enable the Commission and
parties to simultaneously evaluate the reasonableness of costs to implement the approved Line
1600 Test or Replacement Plan.

Sincerely,

Rodger R. Schwecke
Senior Vice President, Gas Operations & Construction

cc: Service List, Application 15-09-013