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Regulators propose $2.25-billion fine for PG&E in San Bruno explosion

July 16, 2013|By Marc Lifsher
  • The California Public Utilities Commission staff is proposing a $2.25-billion penalty for Pacific Gas & Electric Co. related to the September 2010 San Bruno natural gas explosion.
The California Public Utilities Commission staff is proposing a $2.25-billion… (Justin Sullivan / Getty…)

California regulators have proposed that Pacific Gas & Electric Co. pay a record $2.25-billion penalty for its role in causing a fatal 2010 natural gas explosion in San Bruno, a San Francisco suburb.

The total includes a $300-million fine to be paid to the California treasury and $1.95 billion for safety upgrades to the company's gas distribution system. About $1.5 billion would be paid by shareholders and the balance would be returned as a credit to PG&E for already completed distribution system repairs and safeguards.

The proposed financial penalty comes almost three years after the Sept. 9, 2010, explosion of a transmission line that killed eight people and destroyed 38 homes in a neighborhood near the San Francisco International Airport.

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Consumer advocates praised the proposed penalty that is expected to go before the five-member California Public Utilities Commission in the fall.

The fines are overdue, said Tom Long, legal director for the Utility Reform Network, a San Francisco group that monitors the PUC.

"The public is still waiting for PG&E to be held accountable," he said. "It seems obvious that penalties should reduce PG&E's profits, rather than cushion PG&E's shareholders."

PG&E said it objected to paying $300 million to the state rather than investing it in pipeline safety. "In its zeal to punish PG&E, the staff of the California Public Utilities Commission has lost sight of our important shared goal of making PG&E's natural gas operation the safest in the country as quickly as we possibly can," said Tom Bottorff, senior vice president for regulatory affairs.

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