PG&E may be assessed $26 million fine for 2008 natural gas explosion

SAN FRANCISCO, Calif. - State regulators might finally penalize PG&E $26 million for a deadly pipeline explosion that occurred nearly two years before the blast in San Bruno.

On Christmas Eve 2008, a pipeline exploded in the Sacramento suburb of Rancho Cordova, killing one person and injuring five others. A federal investigation into the incident revealed that PG&E was in violation of several safety requirements.

Despite those findings, the California Public Utilities Commission (CPUC) only opened a penalty case against PG&E in December 2010, after the San Bruno explosion had brought pipeline safety under close public scrutiny.

Now, CPUC staff has announced a settlement that would fine the utility $26 million in shareholder funds for its failure to comply with safety regulations. The settlement must still be approved by the full commission.

PG&E admits it can't fill California PUC order for pipeline records

SAN FRANCISCO, Calif. - Pacific Gas and Electric Co. told California regulators on April 21 that it will never find documents for some of its older gas pipelines, and that if the state doesn't accept "assumptions" about some pipes, the company will have to spend five years shutting them down and hydrostatically testing them.

In a filing with the California Public Utilities Commission, PG&E said it cannot satisfy a state order to come up with "traceable, verifiable and complete" records on all 1,800-plus miles of its pipeline in and around urban areas.

The commission issued the order after it was revealed that PG&E's records incorrectly described as seamless the San Bruno pipeline that exploded Sept. 9, killing eight people and destroying 38 homes. Federal metallurgists have concluded that the pipe failed at a seam weld, but PG&E never conducted inspections that might have detected the problem weld.

PG&E couldn't come up with records for more than 600 miles of gas transmission line by the state's March 15 deadline and has proposed that it pay a $3 million fine while it produces additional documentation by August. The utilities commission is still considering the deal.

In its April 21 filing, PG&E called the order for complete records "unprecedented" and said that full documentation would be a "very difficult, if not infeasible, threshold to achieve."

Before the March 15 deadline, the company enlisted hundreds of employees to search through more than a million boxed documents, looking for records to back up PG&E's stated safety levels on pipelines.

Instead of complete records, PG&E said, it wants the commission to accept what amount to educated guesses about some pipelines.

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."