SAN FRANCISCO (AP) — California regulators have refunded $375,000 to Pacific Gas and Electric Co. over concerns the fine payment could jeopardize a potentially larger penalty against the utility for the deadly San Bruno pipeline explosion, a newspaper reported.

The Public Utilities Commission's safety enforcement division sent a letter to PG&E on Friday that withdrew the citation and included a check for $375,000, the San Francisco Chronicle reported in Monday's edition.

The safety division imposed the fine earlier this month after an audit determined that PG&E for decades lacked a procedure to systematically monitor its gas pipelines.

Attorneys and officials involved in the San Bruno case are still worried, though, that PG&E would use the $375,000 charge to challenge a potentially multi-billion dollar fine for the 2010 blast, according to the Chronicle. That's because both stem from many of the same gas system problems.

San Bruno City Manager Connie Jackson said there was "every reason" to believe PG&E would cite the smaller fine to try to escape a bigger penalty.

PG&E spokesman Greg Snapper declined to comment to the Chronicle. Harvey Morris, the lead attorney for the public utilities commission's San Bruno litigation team, also declined comment.

The commission said in a statement on Friday that it was returning the money to prevent any confusion between the San Bruno case and what led to the $375,000 fine.

PG&E is facing a potential $2.25 billion penalty for the San Bruno blast that includes required system upgrades and a $300 million fine. The blast killed eight people and destroyed 38 homes.

Investigators at the utilities commission blamed PG&E for the explosion, which occurred when an underground pipeline ruptured at the site of a decades-old faulty weld, sparking a massive fire.

PG&E has accepted liability for the disaster in numerous public statements but has denied most of state investigators' allegations that it violated safety rules.

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