California regulators hit Pacific Gas & Electric Co. (PG&E), the state’s largest utility, with a $1.6 billion fine for safety violations stemming from a 2010 gas pipeline explosion that ripped through the San Francisco suburb of San Bruno, killing eight people and injuring 58 others.
The Public Utilities Commission (PUC) approved the record fine Thursday by a 4-0 vote with one commissioner who allegedly had improper communications with the PG&E officials abstaining. The fine is 10 times the previous record fine of $146 million, levied against Southern California Edison in Sept. 2008 over a fraudulent customer satisfaction scheme tied to rebates.
Total penalties against PG&E for the San Bruno pipeline explosion have topped $2.2 billion.
The deadly incident occurred when a 1950s-era transmission line measuring 30 inches in diameter in the ground beneath San Bruno ruptured on a weak weld. In addition to the numerous deaths and injuries, the ensuing explosions caused extensive property damage, destroying 38 homes and heavily damaging more than 70 others.
A National Transportation Safety Board (NTSB) investigation found that despite the pipeline’s poor weld, PG&E records indicated that section of pipeline was uniform and unwelded. NTSB investigators also found fault with PG&E’s response to the disaster, noting that 95 minutes had passed before it cut off the natural gas lines feeding the San Bruno fire, among several other serious safety violations.
Nearly half of the $1.6-billion fine will go toward making improvements on PG&E’s entire natural gas transmission system. PG&E natural gas customers will share $400 million in the form of rebates, and the remaining $300 million will be put in California’s general treasury.
PG&E says it wants to move forward from the San Bruno disaster and will not appeal the PCU’s decision. Additionally, the company and its shareholders will pay the entire $1.6-billion penalty instead of the customers.
Source: The Los Angeles Times