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Record $1.4 billion fine levied on PG&E for San Bruno fire!

The California Public Utilities Commission (CPUC) wants Pacific Gas & Electric Co. (PG&E) to pay $1.4 billion in fines and penalties over the fatal natural-gas pipeline explosion in San Bruno, CA in 2010.

The online Wall Street Journal said:

The state Public Utilities Commission proposed fining Pacific Gas & Electric Co. $950 million over allegations that the company violated federal and state pipeline safety rules before the 2010 pipeline explosion. In addition, under the proposal released Tuesday, the company would pay $400 million for pipeline safety work that wouldn’t be covered by ratepayers and $50 million for other improvements.

“We are accountable and fully accept that a penalty is appropriate,” PG&E said in a statement. The company added that it has hired natural-gas experts and focused on beefing up safety.

Shares of PG&E were trading nearly 2% higher Tuesday afternoon at $47.30, as the proposed fine and penalties appeared to be close to analysts’ expectations.

(I included the last sentence for a friend of mine who somehow cynically translates [as the Journal does] all news, good, bad, or fatal, into stock market wagers.)

The high-pressure gas pipeline in San Bruno exploded almost four years ago. The explosion and fire killed eight people, injured dozens of others, and destroyed over 100 homes. (These were homes ON THE PENINSULA, and not priced like most of the homes in the United States.) The state administrative law judges agreed with commission investigators who found that PG&E committed 3,798 violations of state and federal laws, rules, standards, or regulations.

The online Wall Street Journal quoted San Bruno Mayor Jim Ruane:

San Bruno Mayor Jim Ruane said he was disappointed with the proposal because it wouldn’t require PG&E to spend enough shareholder money on improving pipeline safety. “Overall, we’re not pleased with it,” he said. adds:

He <Mayor Ruane> said the city is “extremely disappointed” that the nearly $1 billion fine amounts to a “payday” for Gov. Jerry Brown and the state’s general fund. “We can’t see the benefit of putting this money in the general fund and not on public safety,” he said.

City officials also were disappointed that the judges did not impose an outside safety monitor on PG&E, Ruane said.

As of this evening’s TV news, PG&E has already decided to appeal.

(I remember the San Bruno fire vividly. My first thoughts were that it was the result of foreign or domestic terrorism.)

In addition and separately, federal investigators concluded that PG&E was to blame for the gas line rupture and criticized PG&E for LOSING critical pipeline records, neglecting the aging system of pipelines, and operating the San Bruno pipeline unsafely.

Also, a federal grand jury has charged PG&E with knowingly and willingly violating the federal Pipeline Safety Act and OBSTRUCTING the federal government’s investigation of the explosion. In that case, which is pending in federal court in San Francisco, PG&E has pleaded not guilty to those charges.

-Bill at

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