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PG&E penalized $1.4B for deadly blast

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POSTED September 2, 2014 5:56 p.m.

SAN FRANCISCO (AP) — California regulatory judges have recommended a $1.4 billion penalty against the state’s largest utility for a 2010 gas pipeline explosion that engulfed a suburban San Francisco neighborhood in fire, killing eight people and prompting national alerts about aging pipelines.

The California Public Utilities Commission on Tuesday announced the figure reached by two administrative law judges against Pacific Gas & Electric Co., saying it would be the largest safety-related penalty it had ever imposed.

PG&E can appeal the fine.

The recommended penalty requires approval by members of the state utility board. PG&E and other parties in the case have 30 days to lodge an appeal.

The commission previously ordered PG&E to pay $635 million for pipeline modernization after the Sept. 9, 2010, blast in the suburban San Francisco community of San Bruno.

PG&E representatives issued a statement Tuesday saying it believes a penalty is appropriate.

“Since the 2010 explosion of our natural gas transmission pipeline in San Bruno, we’ve been dedicated to re-earning the trust of our customers and the communities we serve,” the utility said in the statement. “We are deeply sorry

“We have respectfully asked that the commission ensure that the penalty is reasonable and proportionate and takes into consideration the company’s investments and actions to promote safety,” PG&E said. “We are deeply sorry for this tragic event.”

The utility also said, “We are accountable and fully accept that a penalty of some kind of appropriate. However, we have respectfully asked that the Commission ensure that the penalty is reasonable and proportionate and takes into consideration the company’s investments and actions to promote safety.”

The utility said it has hired gas experts to help boost its safety and reliability.

The blast prompted nationwide alerts about aging pipelines.

One of the victims, 44-year-old Jacqueline Greig, worked for a consumer advocacy unit of the CPUC and had been reviewing investment proposals related to aging pipelines. Greig’s daughter, Janessa Greig, 13, also died in the disaster.

The commission previously ordered PG&E to pay $635 million for pipeline modernization after the Sept. 9, 2010, blast in San Bruno. It was California’s deadliest utility disaster in decades.

A 30-inch natural-gas transmission line installed in 1956 ruptured, destroying more than three dozen homes. Survivors described the heat of the blast burning the back of their necks like a blowtorch as they ran away. The explosion was so strong that residents, emergency responders and reporters thought it was an earthquake.

A 2011 investigation by the National Transportation Safety Board concluded that the rupture occurred in a weak weld in a pipeline that PG&E records had shown as being smooth and unwelded. PG&E neglected to shut off natural gas feeding the fire until 95 minutes after the blast, the federal investigators said.

The investigation found PG&E’s safety management of its pipelines overall deficient and ineffective. The federal board also faulted what it called the ineffectiveness of California’s Public Utilities Commission in regulating the power utility, whose service area covers all but the southern one-third of California.

This year, federal prosecutors separately indicted PG&E on 27 counts alleging the utility violated pipeline-safety requirements. Another federal count alleges that PG&E lied to the National Transportation Safety Board in that agency’s investigation.

The company could face additional fines of more than $1 billion if convicted of the federal charges, which are separate from the financial penalties that the state administrative judges weighed.

PG&E pleaded not-guilty to the federal counts in August.

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