Potential PG&E Fine Cut in San Bruno Blast Case

In a major victory for Pacific Gas & Electric Co. the government Tuesday quietly dropped a claim for $562 million in potential fines for alleged gas pipeline safety rule violations, cutting the liability to a maximum of roughly $6 million.

The two-page request came without explanation in the case as jurors entered their fourth day of deliberations over PG&E’s conduct around the 2010 gas pipeline explosion in San Bruno, California, that killed eight people and destroyed homes.

The company is charged criminally with violation of gas pipeline safety rules and obstruction of justice during the National Transportation Safety Board investigation of the blast.

Prosecutors contend PG&E “corruptly misled” the NTSB during its inquiry of the deadly explosion of a high-pressure transmission pipeline on Sept. 9, 2010. The NTSB concluded the rupture was caused by a defective seam weld in the pipe segment that was erroneously listed as “seamless” in PG&E records.

The company is also charged with multiple counts of faulty record-keeping in violation of the Pipeline Safety Act.

The government originally sought $1.1 billion in potential fines but that was lowered to $562 million in December by U.S. District Judge Thelton Henderson.  Tuesday’s request by the government would eliminate a claim under the Alternative Fines Act, which would have allowed the government, in the event of a conviction, to seek either double what PG&E gained, or two times the monetary loss suffered by others.

The new maximum fine, in the event of conviction, would be close to $6 million.

Case: U.S. v. PG&E, No. 14-CR-175

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