California’s largest utility will have to pay a $1.4 billion penalty for a deadly 2010 gas pipeline explosion, state regulatory judges decided Tuesday.
The penalty, issued to Pacific Gas & Electric Co. for a 2010 gas pipeline explosion that killed eight people and caused a fire that destroyed 35 homes in the suburban San Francisco neighborhood of San Bruno, is the largest ever given out by the California Public Utilities Commission for a safety-related issue. Judge Timothy J. Sullivan wrote in the penalty order that the commission is aiming to “send a strong message to PG&E, and all other pipeline operators, that they must comply with mandated federal and state pipeline safety requirements, or face severe consequences.”
The penalty will be parceled into several chunks, with $950 million to be paid to the state of California, $400 million to go toward improving pipelines, and $50 million to go toward increasing pipeline safety. The penalty is on top of a $635 million penalty that the California Public Utilities Commission previously issued to PG&E for pipeline safety improvements. In total, PG&E is facing a $2.03 billion penalty.
PG&E has 30 days to appeal the fine, and PG&E spokesman Greg Snapper said that the utility was “reviewing the decision.” In a statement, the utility said that it holds itself “accountable” and that it fully accepts “that a penalty of some kind is 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. Moreover, we believe any penalty should directly benefit public safety,” the statement reads.
The penalty also could be appealed by another party. The Utility Reform Network (TURN), a consumer watchdog group, told ABC7 News that it’s planning on asking judges to change how the penalty is parceled out, hoping to get the judges to allocate more money toward pipeline safety.
“$950 million going to the state general fund and $450 million that’s going to repair the pipelines, we want to see those numbers reversed,” TURN’s Mark Toney said.
San Bruno Mayor Jim Ruane agreed, saying that he wished more money would have gone toward pipeline safety, rather than directly to the state.
“This reflects, if you will, a payday for Gov. Jerry Brown when we believe this money should instead be directed for a safer pipeline system,” he said.
Regulatory judges found that PG&E committed almost 3,800 violations of state laws, federal laws, regulations, and safety standards related to the exploded pipeline, which had been built in 1956. A National Transportation Safety Board investigation found that a weak weld in the pipeline led to the explosion, even though PG&E reports showed the pipeline being unwelded. PG&E also didn’t shut off the natural gas that fed the fire until 95 minutes after the explosion, and that overall, the utility’s management of its pipelines’ safety was lacking.
Natural gas pipeline explosions aren’t uncommon. In February, a natural gas pipeline blast ignited multiple fires and leveled homes in Kentucky. In January, a TransCanada natural gas pipeline in Manitoba exploded and caught fire, shutting off gas supplies for thousands of residents in the depths of winter. And in June, at least 15 people were killed when a natural gas pipeline exploded in India.