Aftermath from the 2010 San Bruno pipeline explosion. Image courtesy of A Name Like Shields Can Make You Defensive/Flickr.

Pacific Gas and Electric Company (PG&E) asked in a filing Thursday that the California Public Utilities Commission (CPCU) reconsider a $1.4 billion penalty leveled against the company for a 2010 gas pipeline explosion in San Bruno, California.

Last month, Judges Amy Yip-Kikugawa and Mark Wetzell ordered PG&E to pay a $950 million fine, refund about $400 million in unspent safety funds to its customers and pay $50 million in compensation to state and local agencies for auditing and other expenses.

The largest penalty ever previously ordered in the United States for a gas pipeline accident was $101.5 million.

The CPUC is currently reviewing the request. The regulator did not announce when it expects a decision to be reached.

California-based PG&E said the court’s decision “underestimates” the cost of the penalty and does not take into account “significant investments” to improve safety that PG&E has made since the accident.

The utility company said that although regulators estimated the total cost of the penalty would be approximately $2 billion total shareholder impact could actually reach approximately $4.75 billion.

PG&E’s estimate includes previous projected costs of $2.7 billion that shareholders have incurred or are forecast to incur for safety improvements to the company’s natural gas operations.

The pipeline ruptured in September 2010 in San Bruno, California. About 47.6 million standard cubic feet of natural gas was released, causing a fire that killed eight people and injured 58 others. Dozens of homes were destroyed by the blaze.

US attorney Hallie Hoffman said PG&E earned about $281 million from the alleged crimes and the victims lost approximately $565 million because of the accident.

PG&E spokesman Greg Snapper said that the company or its employees did not intentionally violate the Pipeline Safety Act and “even where mistakes were made” employees were “acting in good faith to provide customers with safe and reliable energy.”

PG&E’s alleged violations were first publicized by the CPUC after the explosion.

Last year, the company reached a $70 million settlement with San Bruno to end the city’s claims over the accident.

The settlement came on the heels of a $50 million payment made by PG&E to cover the city’s infrastructure repair costs and other expenses caused by the blast.


  1. PG&E had been collecting funds for pipeline safety from the very people it killed, and all rate payers for decades. Instead of using all those funds for all those years on pipeline safety it put the money in their pockets so the admins and shareholders could purchase that second or third home (with safe gas lines no doubt). Only after 2 fatal disasters does PG&E now have safety on their minds. They should be put out of business, and the people responsible for diverting funds from pipeline safety to their pockets should be charged with murder and put in prison for life. Likewise the PUC should be dismantled and entirely replaced with a commision who puts rate payers first. We obviously need the financial and physical safety protection for these greedy, gigantic corporations who are hell-bent on making large amounts of money selling gas, electricity, and water. EARN THE MONEY!

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