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Secret Pipeline Settlement Slips Out

Friday, August 31, 2012

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Secret documents inadvertently released by a California court detail a settlement of more than $2 million by Pacific Gas & Electric Co. to a California teenager burned in the deadly pipeline explosion of September 2010.

The documents provide the first glimpse at a settlement reached by the utility in a lawsuit by a victim of the San Bruno blast, which killed eight people, injured scores, and destroyed dozens of homes.

400 Lawsuits

The blast was blamed specifically on a faulty weld, but subsequent investigations have resulted in continuing revelations regarding shoddy record-keeping, lax integrity managements, widespread corrosion, and inspection and maintenance issues by the utility.

 More than 400 civil suits have been failed in the case, which displaced scores of families and killed eight people.

 Brocken Inaglory / Creative Commons

More than 400 civil suits have been filed in the disaster, which displaced scores of families.

PG&E is defending about 400 civil lawsuits filed after the accident, in addition to paying still-accumulating-millions of dollars in fines and settlements to various authorities.

More than a quarter of the civil suits have been settled. Until now, however, all details have remained confidential, the San Mateo County Times reported Wednesday.

A ‘Glitch’

The documents in the current case were filed July 18 and were stamped “This document is sealed under court order.” It was not clear how they came to be posted to the court’s site, and they were later removed.

“From the clerk’s office to the IT department, something happened,” Judge Steven Dylina, who is presiding over the girl’s case, told the newspaper. “I don’t know where the glitch is.”

Victims of the blast have complained that lack of information about other settlements has made it difficult for them to evaluate offers from PG&E, reports said.

PG&E would not say if the disclosure would affect any other cases.

“The contents of any settlement remain confidential, but we stay committed in our efforts to resolve these matters as quickly and fairly as possible,” PG&E spokeswoman Brittany Chord told the Santa Cruz Sentinel.

$2.5M Settlement

The documents showed that the company had agreed to pay the teenage girl $1.8 million, in addition additional $677,700 for her attorneys’ fees and $19,400 for medical expenses.

The girl suffered second- and third-degree burns in the blast. The lawsuit said her injuries required extensive treatment and would likely leave permanent scars, the newspaper reported.

 The blaze, laid to a faulty weld, eventually revealed widespread problems with PG&E’s pipeline integrity management.

 MisterOh / Creative Commons

Investigations into the blaze, blamed on a faulty weld, eventually revealed widespread problems with PG&E’s pipeline integrity management.

PG&E CEO Anthony Earley told reporters Thursday that he hoped to settle the remaining cases in the coming months and resolve pending proceedings before the California Public Utilities Commission. He would not say how many cases had been settled.

“The company has acknowledged that we were responsible for that, we’re working with the victims, and we need to get all of these proceedings behind us,” he said at a press conference at the company’s San Francisco headquarters.

$1B Tab

The total cost related to San Bruno will likely top $1 billion, Earley said Thursday. That total includes money for repairs stemming from the blast, compensation to victims, and PG&E’s estimate of a $200 million fine from regulators.

As of the end of June, the utility had spent $145 million on injury and property claims in the case, Chord said. At that time, the company estimated that third-party claims would end up costing $455 million.

A confidential report commissioned by state utility regulators found PG&E’s parent corporation could absorb $2.55 billion in penalties tied to the explosion, yet remain financially viable.

The report by Overland Consulting did not state outright that PG&E Corp. would be fined that much for the deadly blast but suggested that the company could survive a fine of that magnitude, according to a report by The San Francisco Chronicle.

PG&E disagreed, saying the report’s conclusion was “based on an unrealistic and flawed analysis.”


Tagged categories: Construction; Corrosion; Health and safety; Maintenance programs; Pipeline; Pipelines

Comment from Mike McCloud, (9/4/2012, 7:04 AM)

$19,400 in medical expenses? What did she have a sunburn? Good Lawyer.

Comment from Gerald Burbank, (9/4/2012, 8:38 AM)

The article says she suffered second and third degree burns. I suspect that this will result in significant scaring and some disfigurement. Not sure what the loss was in terms of property, but I presume it was substantial. Sounds like you don't think that the victims deserve to be compensated?

Comment from Mike McCloud, (9/5/2012, 7:12 AM)

I'm just saying $19,400 is an emergency room visit nowadays.

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