Seven of eight wrongful death lawsuits related to the rupture of a a Pacific Gas and Electric Co. (PG&E) natural gas transmission line in San Bruno, CA two years ago have been settled, PG&E Corp. CEO Anthony Earley said Thursday.
The eighth case is very close to being settled, and most of the serious injury cases similarly have been resolved, said Earley. It is still estimated that PG&E will pay out $1-2 billion in legal settlements and regulatory imposed penalties in the next few years (see Daily GPI, Feb. 16).
Earley reiterated that he expects a "global settlement" with the California Public Utilities Commission (CPUC) before the end of this year (see Daily GPI, Aug. 8).
Earley said that under civil litigation the San Francisco-based combination utility and holding company's exposure is in the $400-500 million range, with most of it being covered by insurance. The utility has reserved another $200 million for potential fines coming out of the cases pending at the CPUC, and Earley conceded that the company will pay "several hundred millions of dollars" for a pipeline enhancement plan spurred by the explosion.
"There are also literally hundreds of millions of dollars we have spent since San Bruno in repairing the area, settling with the city of San Bruno, and all the other monies being absorbed by shareholders," Earley said. "The total number is certainly more than $1 billion now, and the eventual number will depend on where we come out in the ongoing settlement talks..."
While having some problems with the amounts of proposed penalties from the CPUC, Earley stressed that the relevant question is what is "appropriate," given the scope of San Bruno and the loss of life. "A fine of $200 million or more would be among the largest regulatory fines ever assessed," he said.
While regulatory reports have indicated that PG&E should be able to "finance" the amounts assessed in fines, Earley strongly disagrees that this would ever be doable. "You can't raise that money unless you can somehow show that it would be a good investment," he said.
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