Regulators say PG&E should pay for San Bruno blast

June 2013, Vol. 68, No. 6

On May 5, California regulators recommended that Pacific Gas & Electric Company pay a record $2.25 billion fine for decades of negligence that led to a deadly gas pipeline explosion that leveled a San Francisco Bay area neighborhood.

The penalty would be the largest ever imposed on a utility company by a state regulator, officials said. The California Public Utilities Commission’s investigators said the fine was an appropriate remedy for safety violations extending back several decades, and said the company’s shareholders should shoulder the cost, not the utility’s customers.

“This is going to send a very strong deterrent message to PG&E that this kind of conduct and culture will not be tolerated,” said Brigadier General Jack Hagan, director of the commission’s Safety and Enforcement Division.

The 2010 pipeline rupture in San Bruno sparked a gas-fueled fireball that killed eight people, and injured dozens more.

The proposal calls for the $2.25 billion to be directly invested in safety testing, replacing and upgrading hundreds of miles of PG&E’s gas transmission lines, rather than being sent to the state’s general fund. That means the company would be able to claim penalty as a tax deduction, Hagan confirmed.