PG&E Co. was indicted by a federal grand jury in San Francisco Tuesday on 12 criminal charges of violating a U.S. pipeline safety law, including several counts specifically related to the fatal explosion of a natural gas pipeline in San Bruno in 2010.
The indictment alleges the San Francisco-based utility company "knowingly and willfully" violated requirements of the Natural Gas Pipeline Safety Act of 1968 for maintaining adequate records, evaluating risks of pipeline corrosion and leaks, and prioritizing and addressing potential threats between 2003 and 2010.
The rupture of a high-pressure PG&E transmission pipeline known as Line 132 and the subsequent explosion and fire in San Bruno on Sept. 9, 2010, killed eight people, injured 58 others, destroyed 38 houses and damaged 70 other buildings.
The segment of the line that ruptured was installed in approximately 1956 and had a defective seam weld, but was incorrectly listed in PG&E records as seamless, the indictment said.
"Pacific Gas and Electric Co. knowingly and willfully failed to gather and integrate existing data and information on a line, specifically Line 132, that could be relevant to identifying and evaluating all potential threats on covered segments of that line," the grand jury charged in the first of the 12 counts.
Other counts in the indictment accuse the company of failing to maintain records on repairs to Line 132, failing to evaluate potential threats, failing to select the most suitable method to assess potential threats and failing to prioritize high-risk segments of the line.
Other counts carry similar charges related to two other lines.
U.S. Attorney Melinda Haag said no date has been set thus far for the company's arraignment before a federal magistrate.
If PG&E is convicted, the penalty for each count would be a fine up to $500,000 or the amount of either the loss caused to victims or the financial gain the company made as a result of the violation.
The indictment was expected because PG&E Co. and its holding-company parent, PG&E Corp., announced in a filing with the U.S. Securities and Exchange Commission last week that they anticipated criminal charges because settlement negotiations had been unsuccessful.
"The citizens of Northern California deserve to have their utility providers put the safety of the community first," Haag said in a statement.
The indictment "reflects the company's failure to follow that very basic principle," she said.
PG&E Corp. said in a release that it will seek to demonstrate during court proceedings that the charges "have no merit," while staying focused on its goal of "building the safest and most reliable natural gas system in the country."
"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," said PG&E Corp. Chairman Tony Earley, who was brought in to lead the company after the explosion.
The company said it believes its employees did not intentionally violate the law.
San Bruno Mayor Jim Ruane called the indictment "a measure of justice" and said PG&E should be strongly penalized by both the federal court system and the California Public Utilities Commission.
"One of the worst natural gas disasters in American history was caused by PG&E's gross misconduct. PG&E and its executives should get the harshest penalty to prevent this from ever happening again," said Ruane.
In an administrative proceeding, the Public Utilities Commission is currently considering how much to fine PG&E for record-keeping and safety-compliance failures.
San Bruno has urged the commission to levy the maximum allowable penalty and fine, a total of $2.45 billion in after-tax funds.
PG&E provides natural gas and electricity to 15 million customers in Northern and Central California. It operates 6,000 miles of high-pressure natural-gas transmission pipelines as well as 40,000 miles of smaller distribution lines that deliver gas to houses and commercial buildings, the indictment said.
The company has previously settled claims of nearly $500 million with the victims and their families and is inspecting, repairing and retrofitting pipelines and converting paper records to a digital system, PG&E said.