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Utility Sentenced in Pipeline Blast

Tuesday, February 7, 2017

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California’s largest utility faces $3 million in fines, five years’ probation and a number of other sanctions as part of its sentencing on charges related to a fatal pipeline explosion that took place in that state in 2010.

San Bruno explosion
Images: National Transportation Safety Board

The Sept. 9, 2010, explosion in San Bruno killed eight people and injured 58 more, destroying 38 homes completely.

Pacific Gas and Electric was convicted last August on five of 11 charges of violating the U.S. Pipeline Safety Act, plus one charge of obstruction of justice, in relation to the Sept. 9, 2010, explosion in San Bruno. The blast killed eight people and injured 58 more, destroying 38 homes completely.

The Full Sentence

The company’s sentence, handed down in the U.S. District Court, San Francisco, includes:

  • $3 million in fines;
     
  • Five years of probation;
     
  • An agreement to monitor to ensure compliance with safety regulations;
     
  • Implementation of a court-approved ethics program;
     
  • A $3 million TV and radio ad campaign publicizing the conviction and steps the company has taken to prevent it from happening again;
     
  • 10,000 hours of community service, at least 2,000 of which must be performed by executive-level employees; and
     
  • Full-page articles to be published by the company in the Wall Street Journal and the San Francisco Chronicle, detailing the conviction.

Defective Seam Weld

The San Bruno explosion was found to have been caused by a defective seam weld in a 1950s-era pipeline that company documents had said was seamless. The blast prompted a probe by the National Transportation Safety Board, during which investigators reportedly found that the company was not closely monitoring aged pipelines, such as the one in San Bruno, and was not testing or replacing pipelines when gas pressures exceeded federal limits.

San Bruno aftermath

The blast prompted a probe by the National Transportation Safety Board, during which investigators reportedly found that the company was not closely monitoring aged pipelines.

Investigators also reportedly determined that the utility’s database was filled with informational errors, adding that the company’s managers knowingly relied on flawed records in making safety-related decisions. PG&E denied these charges, and the jury ultimately found the company not guilty of them.

Prosecutors also said the utility knowingly “chose a low-cost inspection method that was incapable of detecting internal welding flaws, violating laws that require pipeline operators to conduct effective scrutiny.”

Maximum Fines Reduced

The $3 million price tag was the maximum fine allowed under the convictions; originally, prosecutors had sought $562 million in penalties, but just before the conviction, prosecutors reduced the maximum possible fines to $6 million, slashing them by nearly 99 percent. Because the company was convicted on only six of the 12 total charges, the maximum fine ended up being $3 million.

Some criticized the fines as too small, given the company’s $888 million in annual profits.

PG&E has already paid more than $1 billion in fines to the California Public Utilities Commission, and bankrolled $70 million in repairs in the area where the explosion occurred.

Company Response

In response to the sentencing, PG&E issued a statement that reads in part, "We want San Bruno and all of the communities we serve to know that we at PG&E have committed ourselves to a goal of transforming this company into the safest and most reliable energy provider in America and to re-earning their trust through our actions.

"As a measure of the progress we've made, we have met 11 of the 12 recommendations of the National Transportation Safety Board, and are focused on completing the final one in a safe and responsible manner. We've also received third-party certifications of our safety progress.”

   

Tagged categories: Criminal acts; Ethics; Explosions; Health & Safety; North America; Pipeline; Utilities

Comment from Thomas Van Hooser, (2/7/2017, 12:17 PM)

Very clear that both company and California State inspection programs failed big time. Investigation by independent agency/parties very much justified to determine root causes of the incident by both PG&E and the State of California and responsible parties held accountable.


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