State PUC seeks to fine PG&E $2.25-billion for San Bruno explosion, largest fine ever in U.S.

Staff with the California Public Utilities Commission Monday

recommended that the commission impose a $2.25 billion fine against PG&E for a deadly pipeline blast in San Bruno in 2010.

The CPUC’s safety and enforcement division recommended the penalty for three cases related to the explosion that killed eight people and leveled dozens of houses on Sept. 9, 2010.

If the commission approves the recommendation in a decision

expected late this summer, it would be the largest fine ever levied by a state regulator in the U.S., CPUC officials said.

The CPUC recommended that the money be used solely for safety purposes to improve the utility’s infrastructure and would include costs of safety work already done since 2010. The money would come out of shareholder funds rather than from ratepayers.

Brigadier General Jack Hagan, director of the CPUC’s safety and

enforcement division, said in a statement that the $2.25 billion fine was “the highest penalty possible against PG&E.”

Hagan said, “There is no amount of money that will bring back the eight people who tragically lost their lives in the pipeline blast or heal the lasting wounds to the people of San Bruno. All we can do is make sure such a tragedy does not happen again.”

He said the CPUC should also blame itself for “its contribution to

the lax safety culture that directly led to the unsafe conditions resulting in the explosion.”

San Bruno city officials had also called for the $2.25 billion

number in a filing with the CPUC earlier Monday, the same day that PG&E was holding its annual shareholders meeting in San Francisco.

“The eyes of the nation are watching the CPUC to see whether it

will provide leadership and levy appropriate fines against PG&E adequate enough to ensure they fulfill the public trust placed in them,” Mayor Jim Ruane said.

Ruane questioned whether the commission’s “cozy relationship with the utility company will interfere with the independent role it should play in safeguarding the public.”

The watchdog group Utility Reform Network had recommended a

smaller fine of $1.7 billion.

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