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CPUC Fines PG&E $97.5M for Communications Violations in San Bruno Pipeline Explosion

California regulators last Thursday imposed $97.5 million in fines and penalties on Pacific Gas and Electric Co. (PG&E) as part of a settlement for alleged improper communications with regulators during the months and years of inquiry into the 2010 transmission pipeline rupture and explosion in San Bruno, CA, a suburb south of San Francisco.

The California Public Utilities Commission (CPUC) ordered the San Francisco-based combination utility to pay $6 million each to the City of San Bruno and its neighboring suburb of San Carlos, $12 million to California's general fund, and $10 million in its next general rate case, along with foregoing up to $63.5 million in revenues from this year and next.

CPUC approval resolved eight proceedings in which PG&E "admittedly failed to timely report ex parte communications from 2010 to 2014, and engaged in improper ex parte communications, in violation of CPUC rules," a commission spokesperson said.

The proceeding remains open to consider whether some newly disclosed e-mail communications from the utility violate the CPUC's ex parte rules and should result in additional fines.

Ex parte communications with the CPUC are subject to unique reporting rules requiring a party to a proceeding to disclose the communication in certain CPUC proceedings "to maintain transparency and integrity of CPUC proceedings," the spokesperson said. "PG&E's failure to report these communications is an unacceptable violation of the CPUC's rules and justifies the remedy provided in this case."

Allegations and concerns have swirled around CPUC and major private-sector utilities in the state regarding relationships between regulators and the companies they oversee. Four years ago, PG&E voluntarily turned over 65,000 of its internal e-mails revealing communication violations.

E-mails subsequently released in some of PG&E's court cases revealed the communications violations that led to the latest fines. Three years ago, California regulators ordered a record-setting $1.6 billion in penalties for PG&E in the aftermath of the San Bruno tragedy.

Settling parties include the City of San Bruno, the City of San Carlos, the CPUC's Office of Ratepayer Advocates, the CPUC's Safety and Enforcement Division, The Utility Reform Network, and PG&E.

In recent years, the allegations and revelations about improper ties have caused state and local elected officials to accuse the state regulators of being too cozy with PG&E and other major utilities, such as Southern California Edison Co.

While utilities are allowed to talk privately with regulators under certain circumstances, in PG&E's case, after the pipeline explosion, California law required those talks be publicly disclosed. The San Bruno incident killed eight people and resulted in PG&E facing numerous felony charges.

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