State and Federal Regulators Looking Into Second PG&E Substation Breach

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PG&E's Metcalf Transmission Substation near Hwy 101 in Coyote, southeast of San Jose. (Craig Miller/KQED)
PG&E's Metcalf Transmission Substation near Hwy 101 in Coyote, southeast of San Jose. (Craig Miller/KQED)

Two security guards were on duty last week when a PG&E substation in Santa Clara County was burglarized -- 16 months after the same facility was hit by a sniper attack.

State regulators are investigating the latest security breach at the Metcalf Transmission Substation, and an official at the Federal Energy Regulatory Commission says his department is looking into the matter.

PG&E officials emphasize that in the months since the substation was hit with gunfire in April 2013, the company spent millions of dollars upgrading site security. That work included installing surveillance cameras and fencing, but those efforts did not stop someone from stealing construction equipment from the substation. And, for now, PG&E is blaming the unidentified guards on duty the morning of Aug. 27 for letting that happen.

"A preliminary review conducted by us suggests that human error could be an apparent cause of the security breach," PG&E spokesman Joe Molica said. "A defense detection alarm received in a security operations center was not appropriately addressed, and that's exactly what we're looking at right now."

The company said there was no impact to the electrical grid. No equipment was damaged and no customers lost service.


But intruders were able to access the substation site, the same station where shots were fired on April 16, 2013.

Authorities said one or more shooters fired rifle shots at oil tanks used to power machines. As a result, 52,000 gallons of oil spilled and 17 of the 23 transformers at the station were put out of commission.

Jon Wellinghoff, who was chairman of the Federal Energy Regulatory Commission at the time of the attack, later told the Wall Street Journal the shooting was the most significant incident of domestic terrorism ever involving the U.S. power grid.

PG&E representatives acknowledge that the attack prompted changes.

"In the wake of Metcalf, we immediately began talking to the industry," Molica said. "For us and the entire industry and in fact, law enforcement, this was a real paradigm shift."

Until then, the company had focused its security efforts at the site on preventing crimes like copper theft.

“What we did was immediately upgrade our security around the facility," Molica said. "We deployed security guards 24/7 at all of our critical substations, we increased patrols from law enforcement. We also installed temporary measures at Metcalf to shield equipment, enhance lighting and obstruct views into the facility while more permanent measures are being designed and engineered."

According to Molica, PG&E plans to erect a "solid, tall wall" around the facility. He said the wall will be between 12 and 16 feet tall and will surround both the substation and an adjacent construction yard. The design phase for the wall has been completed, Molica said. PG&E officials are waiting to receive the necessary permits for the project and expect to complete it by the end of the year.

Last week's burglary prompted the company to deploy extra guards. Before the most recent incident, Molica said, there were two security guards on duty overnight. He declined to say the exact number of security personnel the company is adding.

The guards at Metcalf are not full-time staff, PG&E workers. They are employed by a company that has a contract with the utility, and it looks like that relationship is now under review.

"That's also another element that we're looking at," Molica said. "We need to look at every single element of this investigation and find out how we can better prevent situations like this from ever occurring again."

Molica declined to name the security contractor or whether the guards there are armed.

The burglary came one day before the State Senate Energy, Utilities and Communications Committee approved legislation crafting new rules for security at electrical substations in a 7-0 vote. The next day, the full Senate passed the bill -- SB699 -- authored by Peninsula state Sen. Jerry Hill (D-San Mateo) in a 37-0 vote. Hill’s legislation, which directs the California Public Utilities Commission to require energy firms to protect their facilities, is now on Gov. Jerry Brown's desk.

Hill has been a critic of PG&E in recent years. The politician has been one of several lawmakers pushing for more pressure on the company in connection with the deadly San Bruno pipeline blast. He said the burglary showed that a regulator needs to ensure that the company, and other energy firms, keep a better watch over their own facilities.

“My understanding is they had completed that security upgrade at that substation," Hill said. “Just in this case, PG&E said that they did this. Well, the [CPUC] should be overseeing that to make sure that it was done, done adequately and done to a standard."

The CPUC is investigating the recent burglary. According to Christopher Chow, a spokesman for the commission, the agency began its probe the day of the incident.

The Obama administration and the industry is monitoring developments with it as well. The Federal Energy Regulatory Commission "is closely following the matter in conjunction with the North American Electric Reliability Corporation," said Craig Cano, a FERC spokesman.