Pacific Gas and Electric Co. (PG&E) and the City of San Bruno, CA, settled their differences Monday with the utility agreeing to pay the city $70 million in the aftermath of the deadly September 2010 natural gas transmission pipeline rupture and explosion in a quiet residential neighborhood about 10 miles south of San Francisco.

The deal was labeled as restitution to support San Bruno’s efforts to recover and heal following the Sept. 9, 2010 blast that killed eight people, injured many more and destroyed or badly damaged more than four dozen homes. The $70 million is in addition to PG&E’s commitment to fund replacement and repair of the city’s infrastructure and other costs related to the accident and restoration of the impacted neighborhood.

PG&E committed to not trying to recover the contribution through either insurance or utility customer rates.

San Bruno Mayor Jim Ruane made the announcement, noting the funds will be used for the benefit of “all the citizens of our city and to help us, as a community, get beyond the tragedy and devastation caused by PG&E’s explosion and fire.” Ruane accused PG&E of walking away from settlement talks in February, loudly criticizing the San Francisco-based combination utility (see Daily GPI, Feb. 16).

The mayor alleged that PG&E was failing to negotiate in good faith, and he asked the California Public Utilities Commission to get involved to help restart the talks. For their part, PG&E senior executives maintained that the utility had not “walked away,” but was in the process of scheduling more meetings with the city.

On Monday, PG&E utility President Chris Johns acknowledged that San Bruno has suffered from a terrible tragedy and that the accident will affect the community forever. “We committed the night of the tragedy and continue to commit that we will help the victims and the community heal and rebuild,” Johns said.

He called the settlement “another step” in the healing process, and he hoped it will “provide the community with assurance that the resources will be there to rebuild the infrstructure that was damaged and provide for improvements where the community sees fit.”

The agreement calls for a $70 million payment from PG&E within 30 days, providing funds with which the city can establish a separate non-for-profit public purpose entity to manage the funds and determine how the restitution should be spent for the benefit of the community as a whole.

In lauding the upcoming restitution, Ruane said San Bruno will continue “to advocate for the highest standards of pipeline safety, not only for our city, but throughout the nation.” He dedicated the local efforts to making sure the type of disaster that rocked a part of the suburb would never be allowed to happen again.

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