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PG&E Penalties Slashed to $6M

Monday, August 8, 2016

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The utility company involved in the 2010 San Bruno, CA, pipeline explosion will be facing only a small fraction of the criminal penalties prosecutors had originally been seeking in the case.

Government prosecutors requested, and Judge Thelton Henderson approved, a reduction in the maximum penalty for Pacific Gas & Electric, from $562 million, which was originally sought, to just $6 million. According to reports, no explanation was given for the nearly 99 percent reduction.

The request was made and granted last week, four days into the jury’s deliberation in the trial. The jury has not yet returned a verdict.

Over 1 Billion Paid

The current criminal trial is just the latest in a series of legal and regulatory measures PG&E has faced in the wake of the September 2010 explosion, which claimed eight lives and destroyed 38 homes in San Bruno, in the San Francisco Bay area. Last year, the California Public Utilities Commission fined the company a total of $1.6 billion in relation to the incident, by far the largest fines it had ever assessed.

San Bruno pipeline explosion
Photos: National Transportation Safety Board

The September 2010 explosion claimed eight lives and destroyed 38 homes in San Bruno, CA.

In 2012, PG&E paid $70 million to San Bruno to help pay for repairs to infrastructure in the area of the blast.

In the current criminal trial, PG&E faces 11 felony counts of violating pipeline safety rules, and one additional count related to obstruction of the investigation of the 2010 San Bruno pipeline blast. The new maximum penalties are $500,000 per count.

Fines will be determined by the Judge Henderson if and when any convictions are returned by the jury.

The criminal trial lasted over a month, and prosecutors painted a picture of a company that cut corners on pipeline safety and inspection, according to media reports.

Explosion aftermath

PG&E faces 11 felony counts of violating pipeline safety rules, and one additional count related to obstruction of the investigation of the blast.

The $562 million figure itself was a mere fraction of the $1.1 billion criminal indictment prosecutors produced in 2014, which was reduced before the matter went to trial this year.

Response to the Reduction

The San Jose Mercury News issued an editorial questioning the motive behind the sudden and mysterious reduction in penalties. The newspaper asserted that $6 million is “petty cash” for a company like PG&E, and concluded: “The U.S. attorney's office should restore the full penalty request. If it doesn't, at least tell us why.”

According to the San Francisco Chronicle, PG&E issued the following statement in relation to the matter: “Regardless of this action or the next legal steps, we want our customers and their families to know that we are committed to re-earning their trust by acting with integrity and working around the clock to provide them with energy that is safe, reliable, affordable and clean.”

   

Tagged categories: Accidents; Asia Pacific; Criminal acts; EMEA (Europe, Middle East and Africa); Health & Safety; Latin America; Laws and litigation; North America; Oil and Gas; Pipeline; Safety

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