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PG&E Facing 12 Criminal Charges Regarding San Bruno Tragedy

A federal grand jury in San Francisco late Tuesday indicted Pacific Gas and Electric Co. (PG&E) on 12 criminal counts related to its actions leading up to the September 2010 natural gas transmission pipeline rupture and explosion in San Bruno, CA, that killed eight people and injured dozens more.

The indictment accuses PG&E of repeatedly violating the U.S. Pipeline Safety Act from 2003 to 2010, alleging that the company’s failures led to a preventable tragedy.

In his initial reaction, PG&E CEO Tony Earley said the criminal charges have no merit, and PG&E employees did not intentionally violate federal pipeline laws. "Even where mistakes were made, employees were acting in good faith," he said. "San Bruno was a tragic accident. We've taken accountability and are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so."

The charges, sought by a task force of federal, state and San Mateo County, CA, prosecutors, does not specifically accuse PG&E executives of wrongdoing. However, if the company were found guilty on all 12 charges, PG&E could face a maximum of $6 million in fines and court-ordered oversight. PG&E already faces a proposed $2.25 billion fine in combined penalty proceedings by the California Public Utilities Commission (see Daily GPI, May 29, 2013).

San Bruno city officials, who have been constant and stern critics of PG&E in regulatory, legislative and community forums since the incident (see Daily GPI, Sept. 13, 2010), issued a statement by City Manager Connie Jackson commending the prosecutors "diligence" and noting the city looked forward to a "measure of justice that this indictment will bring to victims and the San Bruno community."

The U.S. District Court for the Northern District of California indicated PG&E on:

  • One count for failing to maintain proper records on its 6,000-mile high-pressure transmission pipeline system;
  • Nine counts dealing with alleged mishandling of various over-pressurization incidents on three different pipelines, including Line 132, which ultimately ruptured; and
  • Two counts for failing to identify risks to its pipelines and to develop plans to eliminate them.

"PG&E by and through the actions of its employees knowingly and willfully violated a minimum safety standard for pipelines carrying natural gas," the 21-page indictment stated.

U.S. attorney Melinda Haag, who represented the federal government on the prosecutors' task force, said Northern California citizens "deserve to have their utility providers put the safety of the community first."

The indictments called out PG&E for its failure to identify the flawed weld during Line 132’s 54-year lifespan..

The charges hit hard at PG&E's seemingly long history of poor record keeping (see Daily GPI, Sept. 6, 2013), which was amplified by the fact that the pipe segment in Line 132 that failed was described as "seamless" (no welds) in the utility's records at the time of the incident when, in fact, a major flawed weld was revealed by the post-incident federal investigation and analysis of the pipe.

Despite being warned by employees and regulators of faulty records on its pipelines, the indictment concluded that "PG&E did not create a record keeping system for gas operations that would ensure that pipeline records were accessible, traceable, verifiable, accurate and complete."

In various regulatory forums the San Francisco-based utility has contended it spent hundreds of millions of dollars over the past three years building a fully digitized and updated records system. Earley pledged to maintain a "strong focus on safety during what is expected to be a lengthy legal process."

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