Utility Regulators Hit PG&E With $1.4 Billion Fine

State utility regulators proposed Pacific Gas & Electric Co. pay a $1.4 billion penalty for its role in the 2010 natural gas explosion in San Bruno that killed eight people and destroyed 38 homes – far below the $2.25 billion recommended by staff and  consumer advocates.

Two PUC administrative law judges issued four rulings Tuesday that found PG&E committed 3,798 violations of state and federal laws that regulate gas transmission.

The penalty includes $950 million fine that goes to California’s general fund, $400 million in pipeline improvements that cannot be charged to ratepayers and roughly $50 million to implement 75 remedies to improve pipeline safety.   The recommendation is not yet final.  It would become permanent in 30 days if no one appeals.

San Bruno officials wanted to see $1.9 billion from the penalty to go to upgrade PG&E’s gas pipeline system in the state.

PG&E issued a statement saying it has been “dedicated to re-earning the trust of our customers and the communities we serve.”  The gas pipeline explosion occurred when a major, 30-inch diameter segment of transmission pipe ruptured creating a firestorm below a residential neighborhood in San  Bruno, south of San Francisco and near the airport.

The summary of one report states PG&E provide “incorrect and misleading responses to data requests to commission staff.”  The ALJ report found PG&E committed 33 violations, many of them continuing for years, for a total of 350,189 days in violation.

Immediately after the explosion, the National Transportation Safety Board began an investigation and almost immediately expressed concern about PG&E’s recordkeeping practices.  The PUC then opened two separate investigations of its own, one part specifically examining recordkeeping adequacy.

In addition, federal prosecutors in San Francisco have charged PG&E with obstruction of justice and 27 counts of violating federal pipeline safety law.  The company pleaded not guilty in court last month.

The company could face another $1.13 billion penalty if convicted of the criminal charges.  There were also $565 million in settlements between PG&E and the victims of the explosion in state court proceedings.

Case: Operations and Practices of PG&E, No. Investigation 11-02-016 (PUC)