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

17 July 2013

The California Public Utilities Commission is proposing a $2.25-billion penalty against Pacific Gas & Electric for the September 2010 San Bruno natural gas explosion. In an amended brief filed in the pipeline case, the commission’s safety division cited the eight people killed and 38 homes destroyed in the blast in the San Francisco Bay area suburb.

The gas pipeline explosion killed 8 in the San Francisco suburb in 2010
The gas pipeline explosion killed 8 in the San Francisco suburb in 2010

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.
Regulators had originally recommended no fine, calling instead on PG&E to spend $2.25 billion on pipeline safety improvements. In that case, the company would be able to claim a portion of the penalty as a tax deduction.
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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