A California regulatory judge on Thursday proposed that the five-member California Public Utilities Commission (CPUC) reject a settlement of a 2008 pipeline case between CPUC staff and Pacific Gas and Electric Co. (PG&E). In June a deal including $26 million in fines had been reached (see Daily GPI, June 22).
Administrative Law Judge John Wong rejected the stipulated resolutions in the PG&E-regulatory staff settlement, along with proposing to increase the proposed fine to $38 million. He wants the CPUC regulators to reject the details of the deal.
A PG&E spokesperson on Friday said “we, too, just received this proposal yesterday and are giving it the full attention it deserves.”
The $26 million settlement initially struck in the CPUC penalty proceeding already would have gained the title of the largest safety-related fine ever assessed by the state regulatory body. This latest regulatory response to a pipeline safety incident comes within weeks and months of the federal and state regulatory operatives being highly critical of PG&E and the CPUC for operating and regulatory practices prior to the more recent natural gas pipeline explosion in San Bruno, CA (see Daily GPI, Aug. 31; June 10).
Last November the CPUC opened its penalty proceeding regarding the Dec. 24, 2008 incident involving leaking gas from a PG&E distribution pipeline that exploded and ignited a fire in the Sacramento suburb of Rancho Cordova, CA, killing one person and injuring five others. Last June the CPUC’s Consumer Protection and Safety Division (CPSD) filed a stipulated resolution. Separately, PG&E and the state’s major consumer watchdog group, The Utility Reform Network (TURN), entered another stipulation under which the combination utility agreed not to include in its next rate case the costs associated with resolving the Rancho Cordova claims and litigation.
PG&E, CPSD and TURN now have 30 days to accept the ALJ’s revised proposed penalty. If they don’t accept the $38 million figure, evidentiary hearings in the case will be held.
In offering his proposed order, Wong cited the “severity and gravity” of the incident, saying PG&E acknowledged that it “failed to provide safe and reliable service at Rancho Cordova,” and pointing to a “series of failures” by its employees to follow company “prescribed procedures.” Because of those failures the utility said it took full responsibility for the tragedy.
Timothy Alan Simon, the assigned CPUC commissioner in the investigation, said he was pleased with Wong’s proposed decision, noting it “sends a balanced message to California utilities and communities that public safety of our critical infrastructure is the highest priority to the CPUC.”
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