Pacific Gas & Electric Co. has agreed to pay $70 million in restitution to San Bruno, Calif., for the 2010 pipeline explosion that killed eight people in the San Francisco suburb. In a joint statement, PG&E and San Bruno said the money will be used to establish a nonprofit organization to help the community recover from the Sept. 9, 2010 blast, which also injured dozens of people and destroyed 38 homes. Mayor Jim Ruane said that the funds will help San Bruno “get beyond the tragedy and devastation caused by PG&E’s explosion and fire.” He added that as a community and as a city, “we remain fully dedicated to assuring our community’s full recovery.”

There are about 90 civil lawsuits that victims of the explosion have filed against the San Francisco-based company. The settlement does not affect those cases. A trial has been set for July 23 in San Mateo County Superior Court. The new nonprofit organization will determine how the restitution is spent for the benefit of the community as a whole. PG&E was to make the $70 million payment within 30 days and agreed not to seek to recover the money through insurance or customers’ utility rates.

The company previously set up a $100 million fund to support emergency needs in the aftermath of the explosion in a quiet neighborhood overlooking San Francisco Bay. PG&E officials have said the company plans to compensate blast victims and hopes to settle the civil lawsuits without going to trial. But it has not specified how much the company will pay victims. Federal investigators blame PG&E for the explosion, saying a litany of failures led to the blast. They concluded the explosion was the result of an “organizational accident,” not a simple mechanical failure.

Escaping gas fed a pillar of flame 300 feet tall for more than 90 minutes before workers were able to manually close valves that cut off gas to the ruptured pipeline. Investigators said the damage would have been less severe had automatic valves been in place. The California Public Utilities Commission voted unanimously in January to open a top-level legal investigation into whether PG&E violated any laws. If it did, that ultimately could result in large fines for the company. Agency staff issued a scathing report saying the natural gas line blew up in part due to what they called the systematic failures of PG&E’s corporate culture, which they said emphasized profits over safety. Staff also cited the utility’s woeful record-keeping, haphazard emergency response and failure to follow both federal pipeline safety laws and accepted industry practices.

Source: Associated Press