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PG&E Pays $300M San Bruno Pipeline Fine

San Francisco-based Pacific Gas and Electric Co. (PG&E) said Friday it has paid a $300 million fine assessed by the California Public Utilities Commission (CPUC) for the combination utility's complicity in the 2010 San Bruno natural gas transmission pipeline rupture and explosion that killed eight people.

Opting not to appeal the CPUC's decision earlier this year, PG&E paid the California General Fund for the fine due Oct. 6, following the completion of a common stock sale to cover the payment (see Daily GPIApril 9).

In addition to the fine paid to the state, the CPUC penalty required PG&E shareholders to refund $400 million to natural gas utility customers and pay for $850 million in pipeline upgrades. The customer refund will be based on usage and returned to customers early next year, per the direction of the CPUC, a PG&E spokesperson said.

Separately, PG&E has now settled claims totaling more than $500 million to all of the victims and families of the incident that devastated a residential portion of San Bruno, along with establishing a $50 million trust for the city of San Bruno for costs related to the recovery and contributing $70 million to support city and community recovery efforts, the spokesperson said.

Although still the object of criticism from consumer groups and elected officials, PG&E officials continue to emphasize that they have made "safety the cornerstone of the company culture" since San Bruno, becoming one of the first utilities to obtain two of the highest internationally recognized safety certifications. Nevertheless critics abound.

CEO Tony Earley, who joined the company after San Bruno, said everyone in PG&E is "committed to a goal of transforming this company into the safest and most reliable energy provider in America." He contends that the utility has "made tremendous progress, but it still has more to do.

Among its accomplishments, Earley cited the completion of advanced pipeline safety testing, replacement and installation of transmission pipelines and more than 200 new automated or remotely controlled emergency shut-off valves; decommissioning of 800 miles of its remaining cast iron pipe; using leak detection technology that is a thousand times more sensitive; and training roughly 3,500 leaders at all levels of PG&E on the safety lessons learned from San Bruno.

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