Pacific Gas and Electric (PG&E) Co. has agreed to pay $86.5 million to settle claims over its closed-door communications with state regulators following the 2010 San Bruno gas line explosion. The penalty resolves an investigation brought by the California Public Utilities Commission (CPUC) that the San Francisco-based utility engaged in “improper communications” and “back-channel deals” with state regulators in connection with its role in the deadly 2010 explosion. Eight people were killed and 58 were injured in the explosion. Thirty-eight homes were also burned to the ground.
A major share of the settlement relates to the foregoing of revenue collection for years 2018 and 2019, which translates to an approximate 22-cent reduction in residential customers’ monthly bills. This amount totals $63.5 million of the settlement. PG&E will also pay $6 million each to the cities of San Bruno and San Carlos, pay $1 million to the California General Fund, and make a request for a one-time $10 million adjustment in revenue requirements for 2020 through 2022.
The proposed settlement comes less than a year after a California federal jury convicted the utility of five criminal counts for violating pipeline safety standards and obstructing a subsequent federal investigation into the September 2010 gas line explosion in San Bruno, a suburb of San Francisco. The federal government had charged PG&E with violating minimum federal safety standards outlined in the Natural Gas Pipeline Act and obstructing agency proceedings after it failed to provide all of its records to the National Transportation Safety Board during its investigation.
In January, a California federal judge ordered PG&E to pay the maximum $3 million statutory fine and complete 10,000 hours of community service, with 2,000 of those hours to be carried out by high-level personnel. Under the $86.5 million settlement, which must be approved by California’s five-member Public Utilities Commission, PG&E admitted to committing “multiple violations” of the commission’s ex parte rules. The agreement said:
PG&E’s employees and agents engaged in communications with decision makers at the commission, as well as related conduct that was harmful to the regulatory process.
The proposed settlement involves the cities of San Bruno and San Carlos, the CPUC Office of Ratepayer Advocates, the CPUC Safety and Enforcement Division and The Utility Reform Network.
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