SAN FRANCISCO – Pacific Gas & Electric Co. (PG&E) has been hit with $1.4-billion in penalties for thousands of safety violations that led up to a violent 2010 gas pipeline explosion that ripped through a San Francisco suburb and killed eight people.
The proposed fine is the largest safety-related penalties ever levied against a public utility company in California history, but the administrative law judges that issued it said it is “meant to send a strong message to PG&E, and all other pipeline operators, that they must comply with mandated federal and state pipeline safety requirements, or face severe consequences.”
The September 9 blast occurred when a natural gas pipeline measuring 30 inches in diameter ruptured in the ground beneath San Bruno, Calif. The ensuing explosions killed eight people and injured several more while causing extensive property damage.
A National Transportation Safety Board (NTSB) investigation found that the rupture occurred in a weak weld in a pipeline that PG&E records indicated was uniform and unwelded. Investigators also found that 95 minutes had elapsed before PG&E cut off the natural gas lines feeding the San Bruno fire, among other serious safety violations.
All but $450 million of the fine money will go directly to the state’s general fund – a decision that drew objections from San Bruno city officials as well as PG&E and advocacy groups, which argued the funds should be invested in updating and maintaining the aging pipeline infrastructure. The pipeline that ruptured and exploded was built in 1956.
PG&E said in a statement that “we are accountable and fully accept that a penalty is appropriate,” but said it would review the decision because it believed that any penalty money should be invested in pipeline safety. The company did not say whether it would appeal.
The current arrangement calls for $400 million to be devoted to pipeline improvements and $50 million to enhance pipeline safety. The utility is prohibited from recovering its losses from customers, including a $635 million penalty it was previously ordered to pay for pipeline modernization.
The federal government indicted PG&E earlier this year on 27 counts of violating pipeline safety requirements. If convicted, PG&E faces fines of more than $1 billion, which are completely separate from the state fines.
Additionally, the utility faces about 10 lawsuits from plaintiffs who lost family members in the PG&E blast, were injured, or sustained property damage.