The aftermath of the San Bruno pipeline explosion. Image courtesy of Bryan/Wikimedia Commons.

Pacific Gas and Electric (PG&E) was hit with a record $1.6 billion fine on Thursday for a 2010 California pipeline blast that killed eight people and destroyed 38 homes.

The fine is tied to a September 2010 pipeline explosion in San Bruno that released about 47.6 million cubic feet of natural gas, setting off a blaze that eventually killed eight people and injured 58 others.

Regulators have traced the cause of the blast to faulty welding in the pipeline and insufficient oversight.

The California Public Utilities Commission (CPUC) also found that the California based utility giant committed 2,425  safety violations in the years leading up to the blast.

PG&E will pay $850 million in gas transmission pipeline safety infrastructure improvements, a $300 million fine to the state’s General Fund, $400 million for a one-time bill credit spread across PG&E’s gas customers and $50 million for further pipeline safety improvements.

When the new fines are added to disallowances already imposed by CPUC the penalties and remedies exceed $2.2 billion.

PG&E is still facing up to $1.13 billion in federal criminal fines.

“No decision can rectify the loss that the community of San Bruno suffered as a result of the gas transmission pipeline rupture, but I believe that our decision will enable us to focus going forward on making sure the system is the safest it can be,” CPUC commissioner Carla J. Peterman said.

Penalties and remedies against PG&E must be paid by shareholders and are not recoverable from PG&E’s customers.

“We want our customers and their families to know that all of us at PG&E have committed ourselves to a goal of transforming this company into the safest and most reliable energy provider in America,” PG&E chairman and CEO Tony Earley said.

The decision process has not been without controversy.

The U.S. Attorney’s office in San Francisco and the attorney general of California are currently investigating improper emails between CPUC members and PG&E, Bloomberg said.

Two CPUC members were forced to recuse themselves from voting on the fine after emails exchanges with PG&E were made public.



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