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PG&E to Appeal Ruling of $1.4B San Bruno Pipe Fines

Pacific Gas and Electric Co. (PG&E) said Wednesday it will ask state regulators to review two regulatory judges' recommendations that combined would assess $1.4 billion in penalties against the San Francisco-based utility for its failings leading to a natural gas transmission pipeline rupture and explosion four years ago in San Bruno, CA.

Coming a day after the California Public Utilities Commission's two administrative law judges issued four presiding officer decisions (POD) (see Daily GPI, Sept. 2), PG&E's planned appeal means that the five-member regulatory commission will have to review and vote on the judges' decisions, which would impose the largest monetary penalty ever by the CPUC.

"We are planning to ask the commission to review the ALJs' recommendation to ensure that a final decision takes into consideration the company's investments and actions to promote safety," a PG&E spokesperson said. "We believe any penalty should directly benefit public safety."

The latter contention by PG&E echoes a concern of one of its chief antagonists, utility consumer watchdog The Utility Reform Network, and a retired federal pipeline regulator, both of whom criticized the ALJs' proposal that $950 million of the penalty be paid directly to the state's general fund.

TURN Executive Director Mark Toney said his organization advocates that "much more of the penalty" be applied to pipeline safety. "We want more of the money redirected toward repairing PG&E's broken system and alleviating ratepayer costs," Toney said.

Brigham McCown, former head of the federal Pipeline Hazardous Materials and Safety Administration, said it was "unprecedented" to have the proposed fine of $950 million directed to the California General Fund, calling the action "a conscious disregard of the safety for Californians."

Under CPUC procedures, the PODs could have automatically become the decisions of the commission without a vote if no party asked for a review or appeal. Now that PG&E plans to ask for a review, the ALJs will consider whether to change their PODs. Whatever they do will need to come before the commissioners for a vote, a CPUC spokesperson said.

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