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PG&E managers to complete community service in unusual punishment for 2010 San Bruno explosion

27 January 2017

A federal judge in San Francisco has imposed an unusual sentence on California’s largest utility for its involvement in the September 2010 San Bruno incident, where a major gas pipeline explosion killed eight and injured a further 58. Utility staff, including top executives, will carry out 10,000 hours of community service and the utility will serve five years’ probation.

San Bruno fire - Image: Wikipedia / CC
San Bruno fire - Image: Wikipedia / CC

US District Judge Thelton Henderson ordered Pacific Gas & Electric Company (PG&E) to pay for a series of television and newspaper advertisements informing the public that it had been found guilty of violating natural gas pipeline safety standards.

Judge Henderson sentenced the utility company to a maximum-allowed fine of $3 million, saying its crimes were “very serious and posed great risk to public safety.” He also said that top executives will be required to perform 2,000 hours of community service and other utility staff an additional 8,000 hours, with the utility as a whole also serving five years’ probation.

Federal and state investigators concluded that the disaster was caused by an ageing, poorly maintained pipeline with faulty welding work that dated back to the 1950s.

A federal jury in August convicted PG&E of five felony counts of failing to inspect and test its ageing gas pipelines for potential defects, despite being aware that federal regulations required it. The utility was also convicted of one count of obstructing the federal government’s investigation of the explosion. No PG&E employees were charged.

During the trial, prosecutors considered but ultimately dropped a proposal to impose a penalty of as much as $562 million on PG&E.

California regulators in 2015 fined PG&E a record $1.6 billion for violating pipeline safety rules before the disaster. The fine, along with pipeline testing and repairs that the state Public Utilities Commission ordered PG&E to make using shareholder funds, totalled $2.2 billion.

The utility also had to pay more than $550 million to settle personal injury and property damage claims stemming from the blast.

According to Bloomberg, the utility was instructed to place full-page ads in the San Francisco Chronicle and the Wall Street Journal describing the offences it had committed and explaining what it is doing to prevent future wrongdoing. The utility will also spend about $3 million on television advertisements.

Under the ruling, PG&E will have to report to a federal probation officer and will be closely monitored to ensure it does not commit any additional crimes.

“We want San Bruno and all of the communities we serve to know that we at PG&E have committed ourselves to a goal of transforming this company into the safest and most reliable energy provider in America and to re-earning their trust through our actions,” PG&E said in a statement after the ruling.

On September 9, 2010, a 30-inch natural gas transmission pipeline ruptured beneath a residential neighbourhood in San Bruno, about 12 miles south of San Francisco. The break triggered an explosion that registered 1.1 on the Richter scale and ignited a wall of fire more than 300 metres high. Other than the deaths and injuries, the blast and subsequent blaze burned 38 homes to the ground.

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