Safety and OSHA News

$1.6 billion (yep, with a B) penalty for fatal explosion

A California utility will pay the largest penalty ever of its type in connection with an explosion in 2010 that killed eight people. Next, regulators intend to look at the company’s overall safety culture. 

The California Public Utility Commission (CPUC) has issued $1.6 billion in penalties to Pacific Gas and Electric Company (PG&E) for the unsafe operation of its gas transmission system that led to the pipeline rupture in San Bruno. The fine is $200,000 larger than an initial recommendation.

On Sept. 9, 2010, a gas transmission line exploded, claiming eight lives, injuring 58 people, destroying 38 homes and damaging 70 other houses.

The  CPUC says its investigation into the San Bruno explosion uncovered “PG&E’s longstanding failure to heed federal and state regulations governing the safe operation of natural gas transmission pipelines.”

A breakdown of the penalty:

  • $850 million will go to future gas infrastructure improvements related to transmission pipeline safety
  • $300 million to the California general fund
  • $400 million in bill credits to PG&E customers, and
  • $50 million to implement over 75 remedies proposed by the CPUC’s safety division and other enhancements of pipeline safety.

When added to an amount from a previous order, the total in penalties and remedies imposed on PG&E comes to more than $2.2 billion. The company has already paid millions of dollars to the city of San Bruno and victims. Federal penalties are likely to follow because of violations of the U.S. Pipeline Safety Act.

The CPUC says the utility committed 2,425 violations of various provisions of federal and state laws. Many of the violations occurred over a number of decades, some for nearly 60 years.

The total number of days in violation comes to 18,447,803. (“Days in violation” refers to the number of violations multiplied by the number of days that violation continued.)

“Our decision commits a significant portion of the shareholder-funded penalty – one of the biggest utility sanctions in U.S. history – to making PG&E’s gas transmission system as safe as possible for the public, consumers, utility workers and the environment,” said CPUC President Michael Picker.

PG&E doesn’t expect to appeal the penalties. The company says it’s working to complete important safety work.

But Picker says he isn’t convinced the utility has learned its lesson. “I’m left being unclear whether PG&E has the safety culture we’re calling for,” Picker said. The commission will now open a new investigation into the company’s safety culture.

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