San Bruno Safety Fine Sent Back to PG&E

Tuesday, December 31, 2013 @ 04:12 PM gHale

The California Public Utilities Commission returned $375,000 Pacific Gas and Electric Co. (PG&E) paid as a natural-gas safety penalty, so the regulators can legally fine the utility as much as $2.5 billion.

The commission’s safety enforcement division imposed the fine earlier this month in response to a 2012 audit concluding that for more than four decades, PG&E lacked a legally required procedure to systematically monitor its gas-transmission pipelines for problems such as leaks and improper pressure levels.

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Without a “unifying” system, PG&E’s gas-safety practices were “disconnected and did not result in effective” monitoring of its major pipelines, the safety division said. PG&E promptly paid the fine.

Not so fast, the regulators said. The agency’s safety arm sent a letter to PG&E withdrawing the citation, along with a check from the state treasurer for $375,000.

The problem for the utilities commission was many of PG&E’s gas-safety shortcomings have been at the center of exhaustive hearings into practices that contributed to the September 2010 explosion of a transmission pipeline in San Bruno. The blast killed eight people and destroyed 38 homes, and PG&E is facing as much as $2.5 billion in fines.

Commission legal-division attorneys involved in the San Bruno case were unaware of the $375,000 fine before the safety division issued it. They told attorneys for other parties in the San Bruno case it could trigger a form of regulatory double jeopardy.

In a statement Friday, the commission said it was returning the check to prevent any “confusion” between the conduct that prompted the $375,000 fine and the San Bruno case.

But dropping the citation and returning the money may not eliminate the utilities commission’s problem. Attorneys for parties involved in the San Bruno case said PG&E could point to the lower fine in arguing that a multibillion-dollar penalty for the disaster, which stemmed from many of the same gas-system deficiencies, would be excessive.

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