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PG&E fined $1.4 billion for deadly 2010 gas line blast

  • In this Sept. 9, 2010 file photo, a massive fire roars through a mostly residential neighborhood in San Bruno, Calif. Pacific Gas & Electric Co. pleaded not guilty Monday, Aug. 18, 2014, to charges in a new indictment that accuses the utility of lying to federal investigators looking into a fatal pipeline explosion in a San Francisco Bay Area neighborhood. (AP Photo/Paul Sakuma, File)

SAN FRANCISCO — California regulatory judges issued a $1.4 billion penalty on Tuesday against the state's largest utility for a 2010 gas pipeline explosion that engulfed a suburban San Francisco neighborhood in fire, killing eight people and prompting national alerts about aging pipelines.

The California Public Utilities Commission said the figure reached by two administrative law judges against Pacific Gas & Electric Co. would be the largest safety related penalty it had ever imposed. PG&E can appeal the fine.

An email to a company representative for comment was not immediately returned. But PG&E said in a statement it fully accepts that a penalty is appropriate.

"We have respectfully asked that the commission ensure that the penalty is reasonable and proportionate and takes into consideration the company's investments and actions to promote safety," PG&E said.

The commission previously ordered PG&E to pay $635 million for pipeline modernization in the wake of the Sept. 9, 2010, blast in the suburban San Francisco community of San Bruno. It destroyed more than three dozen homes and was California's deadliest utility disaster in decades.

The $1.4 billion penalty includes a $950 million fine that PG&E must pay into the state's general fund, $400 million for pipeline improvements, and about $50 million to enhance pipeline safety. PG&E cannot recover any of the money from customers, including the earlier $635 million penalty.

The administrative law judges found that PG&E committed nearly 3,800 violations of state and federal laws, rules, standards or regulations in the operation of its gas transmission system.

The blast occurred when a 30-inch natural-gas transmission line installed in 1956 ruptured. At the time, survivors described the heat of the blast burning the back of their necks like a blowtorch as they ran away.

San Bruno city officials were just beginning to study Tuesday's decision, but it appeared the penalty fell short of what was needed to ensure PG&E upgraded pipeline safety as much as necessary, city manager Connie Jackson said.

"Based on what we're seeing, it does not appear that this penalty amount goes far enough," Jackson said.


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