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Regulators penalize US utility $1.6B for pipeline blast

April 9, 2015

SAN FRANCISCO (AP) — California Public Utilities Commission voted Thursday to penalize Pacific Gas & Electric Co. $1.6 billion for a deadly 2010 gas-pipeline.

The commission voted 4 to 0 on the penalty proposed last month by Commission President Michael Picker.

The fine is $200 million higher than one recommended by administrative law judges last year for PG&E, the state’s largest power utility.

Picker’s proposal would require PG&E shareholders to pay $850 million that would go toward gas transmission safety improvements. It also orders PG&E to pay a $300 million fine that would go into the state’s general fund, and it mandates the utility pay $400 million in bill credit. It directs approximately $50 million toward other remedies.

Federal investigators faulted both PG&E and lax oversight by the utilities commission in the 2010 explosion, which killed eight people in the San Francisco suburb of San Bruno.

Picker’s proposal also devotes more of the utility’s penalty payments to pipeline safety upgrades. An earlier proposal considered by commissioners on Thursday would have sent most of the penalty payment into California’s general fund.

The San Bruno explosion has led to state and federal investigations into back channel dealings between PG&E executives and the utility commission’s former head, Michael Peevey, whose term expired earlier this year. No results of the investigations have been announced.

PG&E has said it wants a penalty that is “reasonable and proportionate” and that takes into account the utility’s past spending to improve safety, utility spokesman Greg Snapper said in a statement Tuesday.

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