PG&E was hit yesterday with the largest fine ever levied at $1.4 billion for San Bruno Gas Explosion Disaster


A penalty being considered by the California Public Utilities Commission (CPUC) in connection with the 2010 San Bruno natural gas transmission pipeline explosion should “be reasonable and take into account precedent and the investments the company has made to promote safety.” At least, that’s what Pacific Gas and Electric Company (PG&E) is imploring the CPUC to impose.

San Bruno, California. Credit: Wikimedia Commons/Tim Adams

As the result of CPUC investigations, the recommended penalty totals approximately $2 billion, but PG&E believes the total shareholder impact could reach approximately $4.75 billion, including the previous $2.7 billion in estimated costs that shareholders have incurred or are forecast to incur to improve and enhance the safety of PG&E’s natural gas operations.

A statement released by PG&E from Chairman, CEO and President Tony Earley, implores the CPUC to do what PGE&E believes is right.

“We are accountable and fully accept that a penalty of some kind is appropriate. However, we have respectfully asked that the Commission ensure that the penalty is reasonable and proportionate and takes into consideration the company’s investments and actions to promote safety. Moreover, we believe any penalty should directly benefit public safety,” the statement said. “We’ve worked hard to do the right thing for the victims, their families and the community of San Bruno.”

To date, the company has settled claims amounting to more than $500 million with the victims of the San Bruno accident, established a $50 million trust for the City of San Bruno for costs related to recovery and contributed $70 million to support the city’s and community’s recovery efforts.

But despite their best efforts, PG&E was hit yesterday with the largest fine ever levied by the CPUC at $1.4 billion. Taking into consideration previous fines, the total cost to PG&E and its shareholders (not ratepayers) will exceed $2 billion. Prior to this, the largest safety-related penalty imposed was $38 million against PG&E for a December 2008 natural gas explosion in Rancho Cordova.

PG&E has 30 days to appeal the decision, but it is currently unclear whether or not they will exercise this option.

For more:
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Read more about: San Bruno explosionTony Earley

Jarrett Neil Ridlinghafer
Founder & CEO/CTO
Synapse Synergy Group, Inc.