CA Public Utility Commission Staff Recommends Record Fine Against PG&E

The Safety and Enforcement Division of the California Public Utilities Commission announced it is recommending a $2.25 billion fine against PG&E, according to a statement released Monday.

The fine would settle three cases arising from the September 9, 2010 pipeline explosion in San Bruno that killed eight people and destroyed numerous homes.

“I am recommending the highest penalty possible against PG&E, without compromising safety and I want every penny of it to go toward making PG&E’s system safer,” said Brigadier General (CA) Jack Hagan, director of the CPUC’s Safety and Enforcement Division, in the release.

The fine would be the largest ever levied by a state regulator. 

See more of Patch's coverage of the San Bruno expolsion here.

Congresswoman Jackie Speier, who represents the region, commended the CPUC for following her recommendations in structuring its proposed record-setting fine against PG&E for the utility's role in the catastrophic 2010 natural gas pipe explosion in San Bruno

"The proposed record-setting fine to be paid by PG&E shareholders for safety work will set a national standard for the safe delivery of natural gas," Speier  said in a prepared statement. "But no action can undo the tragedy of San Bruno, instead, we have to move forward in a way that is most beneficial to ratepayers who shouldn't have to worry about explosions or pay twice for a safe gas transmission system. PG&E’s decisions and mistakes over many years caused this catastrophe—the shareholders are the ones who appropriately should pay."

Speier continued:

"I carry the loss of eight constituents with me as well as the suffering of the burn survivors and those who lost their homes. The money must go towards insuring there will never be another San Bruno."   

The release went on to say:

The Safety and Enforcement Division’s recommendation calls for the $2.25 billion penalty to be used solely for safety purposes. The Safety and Enforcement Division says that the death toll, physical injuries, and extensive damage to homes by the pipeline blast is unsurpassed in its severity and PG&E’s failures is long and reprehensible. 

“There is no amount of money that will bring back the eight people who tragically lost their lives in the pipeline blast or heal the lasting wounds to the people of San Bruno. All we can do is make sure such a tragedy does not happen again. I listened to legislators and the public and determined that every single dollar available from PG&E should go straight to efforts that will ensure safety,” said General Hagan. 

“The recommendation is what the Safety and Enforcement Division believes is the maximum financial penalty that can be imposed on PG&E shareholders without compromising safety. This is a penalty far greater than the CPUC, or any other state regulatory body, has ever assessed.” 

The $1 billion PG&E says it has already spent to test or replace pipelines, and develop safety management systems is included in the fine amount, but the ruling would prohibit the utility from passing the cost of the assessment on to ratepayers, forcing stockholders to foot the entire bill.

The largest CPUC safety related penalty imposed in the past was a $38 million penalty against PG&E as a result of a natural gas explosion on Dec. 24, 2008, in Rancho Cordova. Nationally, the largest penalty under federal pipeline safety laws was $101.5 million for an explosion on the El Paso Natural Gas pipeline in New Mexico in August 2000.

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