PG&E won’t appeal $1.6 billion penalty for deadly pipeline blast

PG&E fined for deadly explosion in San Francisco suburb in 2010

PG&E

PG&E said it will accept the $1.6B penalty without appeal and pledged to make its operations safer.

California regulators approved a record $1.6 billion fine Thursday against PG&E for a 2010 gas pipeline explosion that killed eight people and destroyed more than three dozen homes in suburban San Francisco.

The penalty comes as the state’s top utility regulator, Public Utilities Commission President Michael Picker, told The Associated Press he has called for a larger review into whether the state’s biggest power utility should be broken up to improve safety.

Pacific Gas & Electric Co., meanwhile, said it would accept the penalty without appeal and pledged to make its operations safer. PG&E CEO Tony Earley also released a statement, saying the utility was “deeply sorry” for the explosion. “The lessons of this tragic event will not be forgotten,” he said.

The fine was the largest against a utility in state history, but members of the commission might not be done penalizing PG&E. They said the utility has continued to rack up safety citations since the San Bruno blast, and Picker said he would ask commission staff to evaluate splitting up PG&E’s operations, which currently combine gas and electricity, and serve 9.7 million customers across Northern California and the Central Valley.

“I’m asking the question. We’ll have to answer it,” Picker told the AP.

He raised the topic during the meeting where commissioners voted 4-0 to impose the $1.6 billion fine he suggested last month, asking “if, indeed, PG&E is failing to establish a safety culture, and we continue to see more accidents and violations of safety rules, what are our tools?”

The commission will also investigate whether to go after bonuses and stock options that PG&E gives executives, and it will launch a formal investigation into the utility’s “culture of safety.”

The fine, which was adopted after one of the five commissioners recusing himself from the vote, requires PG&E shareholders to pay $850 million toward gas transmission safety improvements. It also orders PG&E to pay a $300 million fine that goes into the state’s general fund.

It mandates the utility pay $400 million in bill credits, and it directs approximately $50 million toward other remedies.

Commission officials said they would work with state tax officials to limit the utility’s ability to deduct the penalty.

Federal investigators faulted both PG&E and lax oversight by the utilities commission in the 2010 explosion.

San Francisco gas pipeline

2010 suburban San Francisco gas pipeline explosion killed eight people and levelled over three dozen homes.

The explosion has led to state and federal investigations into alleged back-channel dealings between PG&E executives and the utility commission’s former head, Michael Peevey, whose term expired earlier this year. No results of the investigations have been announced. Peevey has never commented publicly on the probe.

PG&E had said it wanted a penalty that is “reasonable and proportionate” and that takes into account the utility’s past spending to improve safety.

Commissioners opened Thursday’s meeting by reading aloud the names of the men, women and children who died in the blast.

Sue Bullis, whose husband, mother-in-law and 17-year-old son were among those killed, told the commission that she struggles, five years later, for the will to go on.

“I blame PG&E for the destruction of my family,” she said, adding, “I blame the” California Public Utilities Commission for lax safety enforcement.

The Associated Press

 

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