Regulators penalize PG&E $1.6 billion for San Bruno explosion

SAN FRANCISCO (BCN) – The California Public Utilities Commission in San Francisco Thursday imposed a record $1.6 billion penalty on PG&E Co. for a fatal pipeline explosion in San Bruno in 2010.

Commission President Michael Picker said the penalty is intended to send “a painful signal” to PG&E of the importance of making safety and record keeping a priority.

“We have considered a variety of factors, including the need to deter PG&E from future violations,” Picker said.

PG&E offered this statement through its Twitter account.

Combined with a previous $635 million penalty, the total levy on the utility is more than $2.2 billion following the deadly San Bruno pipeline rupture on Sept. 9, 2010, in which eight people died and 38 houses were destroyed in an explosion and fire.

The pipeline segment had a defective seam weld and PG&E improperly listed it in its records as being seamless.

Picker said the penalty is the largest ever for a California utility and one of the largest in the United States.

The penalty, to be paid by shareholders and not customers, includes $850 million for pipeline safety improvements, a $300 million fine to be paid to the state’s general fund, a $400 million
one-time bill credit to customers and $50 million for previously identified improvements.

The decision was unanimous by the four commissioners participating.

Commissioner Catherine Sandoval said, “Let this decision herald a new era of integrity and safety.”

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