The California Public Utilities Commission (CPUC) has issued its largest-ever safety-related fine against PG&E Corp. The company must pay $1.4 billion for its role in a deadly 2010 pipeline explosion and fire in San Bruno. The commission’s administrative law judges issued four decisions last month determining that PG&E committed 3,798 violations of state and federal laws or other measures that regulate the operations and practices of its gas transmission system pipeline, according to a statement by the CPUC.
PG&E is also being fined for violations that went on for several years. The CPUC found that the energy company was in violation for a total of 18.4 million days, according to the commission. PG&E said in a statement:
Since the 2010 explosion of our natural gas transmission pipeline in San Bruno, we’ve been dedicated to re-earning the trust of our customers and the communities we serve. We are deeply sorry for this tragic event. We are accountable and fully accept that a penalty of some kind is appropriate.
The commission said in a statement that the penalties issued must be paid by PG&E’s shareholders, rather than its customers. The penalty adds to a $635 million fine issued in an earlier decision forcing the company to finance pipeline modernization. That brings the total fines from the commission to more than $2 billion, according to the CPUC. The administrative law judges’ ruling was to become the official ruling of the CPUC in 30 days unless PG&E or another party filed objections.
The September 2010 explosion in a 30-inch diameter underground pipe released 47.6 million standard cubic feet of natural gas, causing a fire that killed eight people, injured 58 others and destroyed 38 homes, according to a June 2011 report by the commission. The city of San Bruno had been asking the CPUC to impose $2.25 billion in fines, calling for a contribution of at least $1.25 billion for the state’s general fund and $1 billion to cover an independent monitor to oversee PG&E’s safety operation, technical pipeline improvements and an emergency response fund.
PG&E settled with San Bruno in March 2012 for a $70 million to end the city’s claims over the pipeline explosion. The payment came on top of PG&E’s agreement to pay $50 million for infrastructure repairs and other city expenses related to the accident. A June 2011 report from the CPUC found that although the utility had not intended to undermine safety issues, it had not adequately monitored or focused on pipeline safety matters.
The National Transportation Safety Board (NTSB) also found problems with PG&E’s approach to safety in its own report issued later that year. The report noted that the utility’s emergency guidelines made no mention of whether the field personnel, dispatch center or the gas control center are to contact emergency services in the event of an explosion. PG&E has pled not guilty to charges that it violated the Natural Gas Pipeline Safety Act and obstructed a federal investigation into the accident.
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