SAN FRANCISCO (AP) — Customers will not be paying the massive fines being sought by state regulators in the deadly 2010 pipeline explosion in San Bruno, but PG&E’s shareholders will cover that cost, an official at Pacific Gas & Electric said Saturday.
On Friday the utility said it thought the record $2.25 billion in fines being sought by state regulators is illegally excessive, but it did not offer a specific dollar figure it considers reasonable.
In a 103-page filing submitted just before the close of business, PG&E said that it agrees with the California Public Utilities Commission’s finding that a financial penalty is appropriate for the explosion that killed eight people.
But with shareholders already paying $2.2 billion in system upgrades and other improvements in response to the blast, a spokesman on Saturday said that amount should be applied to the fines.
“The amounts shareholders are already paying for safety-related work should be applied to any penalty,” PG&E spokesman Greg Snapper said.
CPUC judges are expected to decide later this year how much the company should be fined for safety violations that led to the explosion.
“Customers will not pay for the penalty. PG&E’s shareholders will bear that cost,” Snapper said.
In addition to causing the eight deaths, the rupture of the pipeline sparked a fireball that also left dozens injured and destroyed 38 homes. Federal and state safety regulators have blamed the rupture on the failure of a decades-old faulty weld and PG&E’s failure to conduct thorough inspections.
Mindy Spatt, a spokeswoman for the Utility Reform Network, a San Francisco consumer advocacy group, said PG&E’s proposal to apply its future safety upgrades toward its past failures amounted to the company “suggesting no penalties at all.”
“It’s an insult to the people of San Bruno and all of PG&E’s customers,” Spatt said. “Every single investigation into this explosion have found PG&E responsible, yet PG&E has the nerve to say, ‘Why blame us?’”
Connie Jackson, San Bruno’s city manager, took issue with the utility’s argument that the proposed fine is excessive.
“What happened in San Bruno was excessive, as was the destruction created in our community,” Jackson said.