CPUC Finally Fines PG&E for Fatal Rancho Cordova Blast

PG&E Corp. has agreed to pay a $26 million fine to the state for the 2008 Rancho Cordova gas explosion that killed one man and injured five other people.

PG&E Corp. has agreed to pay a $26 million fine to the state for the 2008 Rancho Cordova gas explosion that killed one man and injured five other people.

The fine is one of the largest safety-related penalties ever issued by the California Public Utilities Commission. It comes as the commission is investigating the Pacific Gas and Electric gas line explosion in San Bruno, which killed eight people and leveled dozens of homes in the Bay Area community in September.

“I believe this is an effective and meaningful resolution of all the issues in this penalty case,” said Richard Clark, director of the CPUC’s Consumer Protection and Safety Division.

In an agreement filed with the CPUC, PG&E made a number of crucial admissions regarding the events surrounding the Christmas Eve 2008 explosion, which killed 72-year-old Rancho Cordova resident Wilbert “Bill” Paana. The utility admits it was late responding to complaints of a gas leak, and that it installed the wrong pipe when performing repairs on the gas line.

The fine, which goes to the state’s cash-strapped general fund, will be paid by PG&E shareholders and not by consumers. It requires final approval from CPUC commissioners.

PG&E also has agreed to pay for the costs of the CPUC’s investigation.

Brian Swanson, a spokesman for the San Francisco-based utility, called the Rancho Cordova explosion “a tragic event that never should have happened” and said the company was “deeply sorry that it did.”

“During the course of the investigation, we learned valuable lessons about our operations and identified several areas where we could improve,” Swanson said.

“We focused immediately on identifying steps that could be taken to prevent this from happening anywhere else.”

In a May 2010 report on the disaster, the National Transportation Safety Board concluded that PG&E workers installed the wrong piece of pipe when they repaired a leak in Paana’s home on Paiute Way in 2006.

The improper pipe later pulled out of a coupling and allowed gas to leak underground and into Paana’s home.

The NTSB concluded that a two hour, 47-minute delay in the arrival of PG&E’s crew also contributed to the disaster.

When they finally did arrive, the workers failed to notice that Paana and his family were in the house. They also didn’t place any announcement on the door warning of a possible gas leak, the NTSB said.

PG&E reached an out-of-court settlement with Paana’s family in August 2009. The terms of that settlement were not disclosed.

An attorney for Paana’s family could not be reached Monday.

Mark Toney, executive director of San Francisco-based consumer advocacy group TURN, said the stiff penalty shows that the state utilities commission “is finally putting some teeth” into its job of looking out for the public’s safety.

He said he hopes the agency takes a similar approach in the way it handles the San Bruno explosion.

That investigation is pending, but PG&E has said its costs from the 2010 disaster could exceed $1 billion.

CPUC’S BIGGEST FINES

These are the five largest fines issued by the California Public Utilities Commission since 1999. Most were for consumer cases or mismanagement.

$30 million: Southern California Edison Co., 2007. Employees falsified a customer satisfaction survey to help the company and managers earn bonuses and customer-funded incentives.

$27 million: Pacific Bell, SBC Advanced Solutions, 2002. Billing disputes for DSL services.

$26 million*: PG&E Corp., 2011. Explosion in Rancho Cordova that killed one person and injured several others.

$25 million: Pacific Bell, 2001. Violations of state caller ID regulations and incomplete disclosure of price information.

$14.35 million: San Diego Gas & Electric, 2010. Settle allegations that mismanagement contributed to 2007 Guejito, Rice and Witch Creek fires

* Requires approval of CPUC’s commissioners. Source: California Public Utilities Commission