California Public Utilities Commission (CPUC) President Michael Picker has proposed increasing to US$1.6 billion a penalty imposed on PG&E for safety violations related to a fatal 2010 gas pipeline explosion in San Bruno.
The proposed penalty is US$200 million higher than a US$1.4 billion penalty proposed in September last year, and would shift the bulk of the penalty from a payment into state coffers to funds set aside for safety improvements, according to CPUC officials.
Where the previous penalty included US$950 million to be paid to California’s general fund, the current settlement calls for PG&E shareholders to pay US$850 million toward gas transmission pipeline safety infrastructure, US$300 million to the state’s general fund and a one-time US$400 million bill credit to gas customers.v
The US$850 million is in addition to US$635 million that the CPUC previously ruled PG&E shareholders must pay for the first phase of its pipeline modernisation programme, and the costs cannot be passed along to customers.
PG&E had appealed the penalty proposed last year, which at the time was by far the largest penalty for safety violations ever levied by the commission.
San Bruno officials had objected to the proposal in part because it put too much money toward state coffers and not enough toward pipeline safety improvements.
The 9 September, 2010 pipeline explosion in San Bruno killed eight people, injured 66 others and destroyed dozens of homes. It was caused by a rupture in a defective seam weld in a pipeline segment that was incorrectly listed in PG&E records as seamless, according to the National Transportation Safety Board.
Two CPUC administrative law judges ruled that PG&E had committed nearly 3800 violations of state and federal laws and regulations in the years leading up to the explosion.
“We are gratified that in fact some things are starting to happen and on the surface it looks like a little bit more than what the administrative law judges had recommended before,” said San Bruno Mayor Jim Ruane.
The new fine proposal would shift the bulk of the money from the general fund to safety improvements, but Ruane says he needs more details about exactly where that money will go.
“I want to see what they’re actually going to do with this US$850 million to put back into the ground. I really didn’t see anything there about what we were fighting for — for many, many months; a pipeline safety trust,” he said.
A PG&E spokesman says they are still reviewing the proposal, but plan to comment on it soon.
Edited from various sources by Elizabeth Corner
Sources: The San Francisco Appeal, CBS Local