San Bruno recommends $2.25B in fines for gas pipeline explosion

May 7, 2013 | By Barbara Vergetis Lundin

The City of San Bruno, the City and County of San Francisco and The Utility Reform Network yesterday filed the penalties and fines -- $2.25 billion -- they believe Pacific Gas & Electric (PG&E) should pay for its alleged "gross mismanagement and failure to safely operate a gas pipeline" in the 2010 San Bruno explosion and fire. The incident resulted in the death of eight, injuries to 66 and the destruction of 38 homes in San Bruno.

The aftermath of the PG&E's 2010 pipeline explosion and fire in San Bruno. Credit: Wikimedia Commons, Brocken Inaglory.

"The eyes of the nation are watching the CPUC to see whether it will provide leadership and levy appropriate fines against PG&E adequate enough to ensure they fulfill the public trust placed in them -- or whether its cozy relationship with the utility company will interfere with the independent role it should play in safeguarding the public," San Bruno Mayor Jim Ruane said.

How the Commission sentences PG&E will determine that the agency tasked with regulating public utilities is living up to its duty to protect the public or reveal a conflict of interest in its relationships with the utilities it oversees.

In response to the San Bruno explosion, PG&E has said that it "lost its way," but is taking the necessary steps to correct the deficiencies that resulted from the incident.

"I am very pleased by [our] progress, but we have much more work to do. Our pipeline network is massive. If built in a straight line, it would run from here to Boston and back 15 times," said Tony Earley, PG&E corporation chairman and CEO.

Although PG&E has made strides in improving the safety of its gas system, the utility is not getting accolades.

"… make no mistake, through its lawyers and its filings, PG&E has admitted not a single substantive violation of law in the face of thousands of charges of violations of state and federal law," Ruane said.

Ruane has called upon the CPUC to demonstrate it is a "tough regulator" by imposing fines and penalties that will "send the message that gross negligence and recklessness will not be tolerated."

If the CPUC were to consider and levy fines based on each violation, as it is obligated to do by law, the range of fines would literally exceed hundreds of billions of dollars, Ruane said.

Even with three separate independent investigations, PG&E has not paid one dime in fines, according to Ruane. "If there is any case for punishing a utility for unprecedented bad behavior, it is this one," he said.

PG&E disagrees, of course, that such an unprecedented event deserves unprecedented accountability.

"I understand the desire to punish PG&E. However, the penalties proposed by the Commission staff and others far exceed anything that I have seen in my 30 years in the industry and fail to appropriately account for the actions taken by the company," Early said in a statement. "I am deeply concerned that an excessive penalty, such as those proposed, could dramatically set back our efforts to do the right thing by making it harder and more costly to finance the remaining improvements that are needed in our gas system. To avoid this, it is essential that the Commission take a more balanced approach in rendering its final decision."

For more:
- see this article

http://www.fierceenergy.com/story/san-bruno-recommends-225b-fines-gas-pipeline-explosion/2013-05-07