Washington, D.C. (Law Firm Newswire) August 13, 2013 — California regulators toughened their proposal to punish PG&E for a deadly pipeline explosion in 2010.
California Public Utilities Commission (PUC) attorneys asked the agency’s commissioners to fine Pacific Gas & Electric Corp. $300 million in addition to penalties in excess of $1.9 billion. The earlier proposal amounted to the same total but did not include a fine. Instead, it allowed PG&E to pay the entire penalty in the form of pipeline improvements.
“This is a penalty with teeth,” said Washington, D.C. personal injury attorney David Lietz. “PG&E should be penalized beyond simply modernizing its pipeline to make it safer, which clearly needs to be expedited in any case.”
The explosion in San Bruno, a suburb of San Francisco, killed eight people and destroyed 38 homes. In separate investigations, state and federal investigators determined that PG&E was to blame for the accident, citing faulty welding, inadequate safety testing, and lost or incomplete records. PG&E has repeatedly accepted liability for the disaster, but has denied the majority of investigators’ allegations that it violated safety regulations.
The penalties proposed in a brief filed earlier this year were seen as far more lenient than the recent revision. It consisted entirely of infrastructure improvements ordered by the commission and included credits for funds already spent. San Bruno officials and consumer advocates objected to the proposal. The officials said it was tax-deductible and contained many credits and perks that made the penalties amount to very little.
Several PUC attorneys investigating the accident were removed from the case after objecting to the comparatively weak penalties. One attorney, Robert Cagan, went as far as to call them “unlawful” in correspondence with radio station KQED.
The Utility Reform Network, a consumer advocacy group, released a statement praising the revised proposal. But PG&E said such a large fine would undermine the company’s plans to modernize their pipeline by making it more difficult to raise the huge sums of money necessary to do so.
“Aging pipelines are a big problem in this country,” added Lietz. “Regulatory bodies need to help utilities with this issue, but the utilities need to know that expensive operations must not lead them to cut corners when it comes to safety.”
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