In reporting its third quarter earnings, PG&E Corp. Thursday said it took a $238 million charge on a pre-tax basis, or 36 cents/share, tied to the Sept. 9 natural gas transmission pipeline rupture and fire in a residential neighborhood in suburban San Bruno, 10 miles south of San Francisco.
In the aftermath of the explosion, which killed eight people and destroyed 37 homes while badly damaging 18 others, PG&E said the one-time charge in the quarter includes $220 million for property damage, personal injury and other legal claims arising from the accident, including the cost of its $100 million Rebuild San Bruno Fund.
Eventual costs tied to the tragedy could run from $220 million to $400 million, and this is before factoring in insurance coverage, according to the San Francisco-based holding company for Pacific Gas and Electric Co., the combination utility.
"Consistent with accounting practice, the low end of the range was accrued in the third quarter," said PG&E in announcing earnings that were up quarter over quarter when not including the charges but down when the charges are applied.
When including charges, PG&E said net income in the third quarter was $258 million, or 66 cents/share, compared with $318 million, or 83 cents/share, for the same period last year. On a non-generally accepted accounting principles (GAAP) basis, excluding the San Bruno charges, earnings from operations were $398 million, or $1.02/share, in the third quarter, compared to $358 million, or 93 cents/share, on a non-GAAP basis for the same 2009 period.
An additional $18 million as part of the one-time charge is related to costs associated with the accident resulting from the re-inspection of the utility's gas transmission pipelines, providing immediate support to San Bruno and other activities, PG&E said.
"The ultimate level of direct costs for these and other related activities could range from $100 million to $150 million through 2011," PG&E said.
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