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PG&E Faces 12 Felony Counts for Blast

Monday, April 7, 2014

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Pacific Gas & Electric is being charged with 12 felonies in a criminal indictment for allegedly violating federal pipeline safety laws related to the deadly 2010 pipeline explosion in San Bruno, CA.

The indictment, returned Tuesday (April 1) by a federal grand jury for the Northern District of California, charges PG&E with allegedly knowingly and willingly violating the Natural Gas Pipeline Safety Act of 1968 multiple times between 2003 and 2010.

However, PG&E says the charges have "no merit" and the company has already "implemented enormous changes" to transform its 100-plus-year-old pipeline system.

federal PSA
NTSB

PG&E is facing 12 criminal charges for allegedly violating the federal Pipeline Safety Act. Proposed fines total $6 million but could be increased.

The Sept. 9, 2010, explosion caused a 28-foot-long rupture in PG&E's 30-inch-diameter Line 132. The explosion blew open a crater 72 feet long and 26 feet wide, launching the ruptured section 100 feet. Eight people were killed and 58 were injured; 38 houses were completely destroyed and another 108 damaged.

12 Alleged Violations

Local, state and federal authorities launched an investigation after the explosion, and announced that they uncovered a dozen separate PSA violations.

The charges stem from the company's record-keeping and pipeline "integrity management" practices and allege that PG&E failed to address record-keeping deficiencies concerning its larger natural gas pipelines knowing that their records were inaccurate or incomplete.

Previous investigations uncovered a host of factors in the blast, portraying the utility as a company that put profits above safety with shoddy records, inadequate inspection and testing, and—in the words of one federal safety official—“an integrity management program without integrity.”

In March 2012, the California Public Utilities Commission released two reports that detailed widespread lapses by PG&E in keeping records on its thousands of miles of high-pressure gas transmission lines.

The blast was traced directly to the use of a substandard, poorly welded pipe section that investigators said should never have been installed—and whose use should have been discovered later by appropriate record-keeping, testing and inspection. PG&E’s records described the pipe as seamless.

PG&E criminal charges
NTSB

PG&E's "smug attitude going forward has to change ... You have the expectation that when you go home and put dinner on the stove, it should be safe," San Bruno Mayor Jim Ruane said.

"The citizens of Northern California deserve to have their utility providers put the safety of the community first," said U.S. Attorney Melinda Haag. "Today's indictment of PG&E for violating the minimum safety standards established by the [PSA] reflects the company's failure to follow that very basic principle."

The maximum statutory penalty for each count for a corporation is $500,000 or a fine based on the gain the corporation made as a result of the violation or the loss caused to victims.

An arraignment date has not yet been scheduled.

The Alleged Actions

The indictment alleges that PG&E knowingly and willingly failed to:

  • Gather and integrate existing data and information that could be relevant to identifying and evaluating potential threats;
  • Maintain records concerning data, location and description of each repair made to a line;
  • Identify and evaluate potential threats to its larger pipelines;
  • Include potential threats in its annual baseline assessment plan and select suitable methods to assess potential threats;
  • Adequately reprioritize and assess threatened pipelines after they were over-pressurized; and
  • Analyze high-risk pipelines to determine the risk of failure from change circumstances or manufacturing threats.

"Today's indictment is an important step in providing justice for the individual, families and community devastated by the 2010 pipeline explosion and fire in San Bruno," California Attorney General Kamala D. Harris said.

"When allegedly faced with evidence of transmission line problems, PG&E knowingly and willfully chose not to assess and remediate the problems," Harris said.

The indictment did not come as a surprise to PG&E, which issued a statement a few days before the charges were announced, saying the company expected "that the federal government will bring criminal charges against the utility."

The company says the charges are not merited and its employees "did not intentionally violate the federal [PSA]."

Mayor: PG&E 'Smug'

"San Bruno was a tragic accident that caused a great deal of pain for many people," said Tony Early, PG&E Chairman and CEO, who was brought in to lead the utility in 2011 after the San Bruno incident.

San Bruno pipeline explosion
Mbz1 / Wikimedia Commons

The Sept. 9, 2010, pipeline explosion killed eight people and injured 58, as well as crushing 38 houses and damaging another 108.

"We're accountable for that and make no excuses. Most of all, we are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so," Early said.

San Bruno Mayor Jim Ruane held a press conference Wednesday (April 2), and said he was pleased with the criminal charges, but upset about the utility's response.

"This is a very difficult situation for us because we're living through this every day," Ruane said, SMDailyJournal.com reported. "It's disheartening they keep calling this an accident; it was not and it could have been prevented.

"Their smug attitude going forward has to change ... You have the expectation that when you go home and put dinner on the stove, it should be safe," Ruane said.

On Tuesday, PG&E "pledged to stay focused on building the safest and most reliable natural gas system in the country despite what it expects will be a lengthy legal process to demonstrate that federal criminal charges filed today have no merit."

PG&E pipelines
PG&E

PG&E says the alleged charges have no merit and its employees did not intentionally violate the PSA.

He added that the company has "implemented enormous changes" and has committed $2.7 billion of shareholders' money to date to support transforming the 100-plus-year-old natural gas system.

Millions in Fines, Claims

According to PG&E, it has settled nearly $500 million in claims with the victims and families, established a $50 million trust for the city of San Bruno for costs related to recovery, and contributed $70 million to support recovery efforts.

In March 2012, PG&E agreed to pay more than $70 million in restitution to the city of San Bruno, in addition to an earlier commitment to fund the replacement and repair of the city's infrastructure and other costs related to the accident and restoration of the neighborhood.

Last November, a California judge ruled that PG&E delayed and attempted to mislead regulators when it revealed recordkeeping errors for two of its pipelines: Line 147 under San Carlos, CA, and Line 101 extending from San Francisco to Milpitas. The judge proposed fines totaling $6.75 million.

In December 2011, PG&E was fined $38 million by the state stemming from a 2008 explosion that killed one and injured five others in Rancho Cordova, CA.

   

Tagged categories: Criminal acts; Explosions; Fatalities; Fire; Inspection; Laws and litigation; NTSB (National Transportation Safety Board); PHMSA; Pipelines

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