PUC Fines PG&E $1.6 B for San Bruno Explosion


The California Public Utilities Commission voted today to fine Pacific, Gas & Electric Co. $1.6 billion in penalties for its role in the September 2010 San Bruno gas pipeline explosion that killed eight people, injured dozens and destroyed or damaged about 100 homes.

The new penalty is $200 million more than an earlier internal recommendation by the San Francisco-based agency’s administrative law judges assigned to the case. Along with earlier penalties related to the San Bruno incident, the total fines imposed on PG&E now exceed $2.2 billion.

CPUC President Michael Picker, who took office in late December, replacing disgraced former President Michael Peevey, described the penalty as one of the largest ever levied on a utility company nationally.


Today’s vote increased the penalty from an earlier $1.4 billion recommended by the agency’s administrative law judges. It also shifted much of the penalty from the state of California’s general fund to safety improvement efforts and rebates to state rate payers. PG&E shareholders must pay the fine, Picker said during the Thursday morning hearing.

The vote was four to zero, with Commissioner Mike Florio recusing himself.

The Utility Reform Network, a consumer advocacy group that has long tangled with PG&E over rates and related issues, said it considers the new fine “a huge improvement over previous proposals.” The agency adopted many of the advocacy group’s recommendations, including making PG&E shareholders, not rate payers, take financial responsibility for the penalty, the group said.

The increased fine and the steering of $850 million toward pipeline safety enhancement efforts were proposed by Picker in mid-March, a step known as a “decision different” in CPUC terminology. The final vote also sends $300 million of the penalty to California’s general fund, and distributes $400 million in rebates or “bill credits” to PG&E’s gas customers statewide.

Commissioner Catherine Sandoval said the moves show that the CPUC considers public safety “its top priority.”

Tony Earley, PG&E’s chairman and CEO, said that although the giant utility has to review Thursday’s CPUC decision “before making a final decision, we do not expect to appeal today’s ruling.”

Instead, Earley added, “our focus is on moving forward to complete the important safety work we set out to do” following the San Bruno explosion. “We are deeply sorry for this tragic event,” he said in an April 9 PG&E statement, “and we have dedicated ourselves to re-earning the trust of our customers and the communities we serve.”