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California Regulators Set $25.6M Penalty For PG&E Distribution Pipe Missteps

California regulators on Thursday set the penalty against Pacific Gas and Electric Co. (PG&E) for its past failures to keep proper records of its distribution pipeline system in cases dating back several years. At least one regulator expressed concerns of ongoing safety problems at the giant utility.

An administrative law judge (ALJ) at the California Public Utilities Commission earlier had set a $24.3 million penalty for PG&E (see Daily GPIJune 3), but it was appealed to the five-member commission by two parties in the case involving a house service line explosion in Carmel, CA.

While not commenting directly on the higher penalty, a San Francisco-based PG&E spokesperson reiterated that safety is a top priority.

Despite a long list of high-profile penalties and rebukes from the CPUC and federal regulators in the almost six years since the San Bruno high-pressure natural gas transmission pipeline failure (see Daily GPIApril 10, 2015), PG&E continues to argue that it has "made incredible progress" while acknowledging that the company still has "more work to do."

The CPUC's latest action revised the June 1 ALJ's decision in this case after the commission's own safety/enforcement division and the local Carmel government appealed. The state regulators' decision denies the appeals but increased the penalty by $50,000 for a fine, while revising a missing records per-day fine for a separate incident (De Anza) to $1,000/day.

The De Anza change added $1.26 million to the ALJ's fine in a case that opened nearly two years ago with the safety/enforcement division investigating PG&E's more recent distribution pipeline record keeping, a separate issue from past failures regulators had found in the utility's transmission pipeline record keeping.

The proceeding considered several distribution incidents, including the explosion that leveled an unoccupied house in Carmel, to determine if there were "systemic violations" by PG&E, both in terms of the record keeping and other safety-related violations, a CPUC spokesperson said.

Commissioner Liane Randolph called the decision a case of applying "proportional and appropriate penalties" to the record keeping problems. But she said that she remains concerned "about what these violations show in terms of PG&E's management of its natural gas distribution system."

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