Oil Refiner Sues PG&E Over 2010 Power Outage

Oil refiner Tesoro Refining Co. has sued its electricity supplier Pacific Gas & Electric Co. for breach of contract and negligence over a November 2010 power outage from failure of a Contra Costa County substation that damaged the refinery.

The lawsuit filed Friday in San Francisco federal court alleged that as a result of the lost power at its Martinez plant, the refinery’s process units and boilers shut down and the hydrocracker and other hydroprocessing units depressurized.

Another major process unit, known as a delayed coker, which was not powered by the substation, nonetheless had to be deliberately shut down because it had insufficient steam supply due to loss of power to the other process units, the suit states.

Tesoro has the ability to produce 166,000 barrels of oil a day at the refinery, according to the lawsuit.

The power outage on Nov. 10, 2010, led to excess flaring and a refinery-wide shutdown, according to Contra Costa County Health Services records.  Although power was restored later the same day, it took the refinery nearly 10 days to resume normal operation.

It was alleged that PG&E performed maintenance on major power lines for two substations nearby, but at some point the circuit breakers for the Tidewater Substation, supplying Tesoro and a nearby neighborhood, were opened, isolating the Tidewater Substation from the PG&E power grid.  This caused Tesoro’s own cogeneration plant to be overloaded and shut down, according to the lawsuit.

Tesoro submitted damage claims to PG&E a year later, in Nov. 2011.

“Although Tesoro has provided PG&E over three to complete its investigation, PG&E has failed to accept responsibility for the Nov. 10, 2010 power outage or for the damage it has caused Tesoro,” the suit states.

The lawsuit seeks compensation for alleged breach of contract, negligence and inverse condemnation.  It also asks for punitive damages.

Case:  Tesoro Refining v. PG&E, No. 14-cv-930JCS



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