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Pacific Gas & Electric is facing a $2.25-billion penalty

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Staff writer ▼ | May 7, 2013
Pacific Gas & Electric is facing a record $2.25-billion penalty for a 2010 natural gas explosion in San Bruno that killed eight people and destroyed a neighborhood.
Pacific Gas & Electric
Pacific Gas & ElectricPacific Gas & Electric is facing a record $2.25-billion penalty for a 2010 natural gas explosion in San Bruno that killed eight people and destroyed a neighborhood.


If approved by the California Public Utilities Commission (PUC), it would be the largest penalty ever levied by the agency. The PUC's largest fine up to now was $38 million against PG&E for a 2008 gas explosion in Rancho Cordova.

A report by the Commission's Safety and Enforcement Division said its investigators found more than 100 violations by the company and some of the are decades old.

"Imposing a fine for each violation... would result in tens of billions of dollars of fines, which is more than PG&E's net worth," states the report.

Regulators said they agreed on $2.25 billion "because PG&E needs to retain its creditworthiness in order to be able to pay for its improvements in the safety of its facilities, as well as to procure natural gas and electric power." The board also said the fine should be paid by PG&E shareholders, not ratepayers.

It was the latest investigation into Pacific Gas & Electric. The National Transportation Safety Board issued a report blaming PG&E for "baffling" mistakes and a "litany of failures." The National Transportation Safety Board (NTSB) also faulted state and federal regulators, including the Public Utilities Commission, for lax oversight of the utility.

Pacific Gas & Electric chairman Tony Earley said that his company made significant safety improvements, including replacing 45 miles of pipelines. Future fixes "could be threatened by a massive fine."


 

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