Tuesday, April 26, 2011

PG&E could be vulnerable for $400 million fine in new California PUC probe

SAN JOSE, Calif. – Pacific Gas & Electric on April 18 faced its first key deadline in a punitive state probe examining whether its record-keeping practices contributed to the San Bruno natural gas disaster and other pipeline hazards.

This broader record-keeping inquiry will consider whether the utility's missing or otherwise hard-to-locate records violated the law and hurt the safety of its vast network of gas pipelines.

If PG&E is found guilty, it could potentially be fined $400 million or more, according to a report on April 15 by Bernstein Research, which does detailed financial analysis of utilities.

"The fact that they knew so little about their gas transmission lines strikes many of us as a risk," said Paul Clanon, executive director of the California Public Utilities Commission, which launched the record-keeping investigation in February. Noting that the probe will likely take months to conclude, he added, "it will be a very litigated process. The potential fines could be very significant. PG&E will certainly put up a fight."

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