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PG&E CEO says San Bruno explosion could cost utility $1 billion

31 August 2012

PG&E president and CEO Tony Earley said on August 30 that civil settlements and potential fines stemming from a fatal gas pipeline explosion in San Bruno two years ago could cost the company more than $1 billion. The explosion and subsequent fire in the San Francisco suburb killed eight people, injured dozens and destroyed large parts of the neighbourhood

The 2012 gas pipeline explosion in the San Francisco suburb killed eight and destroyed much of the neighbourhood
The 2012 gas pipeline explosion in the San Francisco suburb killed eight and destroyed much of the neighbourhood

Earley—who became CEO of PG&E in 2011 — said at a news conference that the September 2010 pipeline explosion in San Bruno’s Crestmoor Canyon neighbourhood was a catalyst for the utility to reevaluate its operations “from top to bottom.”

Earley said that PG&E has successfully settled with seven of the eight victims’ families, and that additional settlements with victims who were injured in the disaster could be expected by the end of the year.

PG&E has set aside between $400 and $500 million to pay to victims of the San Bruno explosion, and around $200 million to settle possible fines and related penalties that could be levied by the California Public Utilities Commission, he said.

PG&E has already agreed to pay the city of San Bruno $70 million to help rebuild the community, and invested further sums replacing the streets and infrastructure that were destroyed.

The total amount paid by PG&E to the victims, their families and the city could exceed $1 billion, Earley said.

“We know it’s going to take years and years in terms of the recovery process,” he said.

Since the San Bruno explosion, PG&E has conducted high-pressure tests on more than 200 miles of gas transmission lines throughout its service area, and is on track to test more than 700 miles by the end of 2014, Earley said.

The utility hopes to improve its infrastructure, safety record, corporate culture and customer service in the coming years. “I think we’ve made a lot of progress in the last year,” he said, “but we know that we still have a huge amount of work ahead of us.”

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