CPUC Possibly Looking to Fine PG&E for Explosion

The California Public Utilities Commission voted today to consider penalizing PG&E for the Sept. 9, 2010, pipeline explosion in the Crestmoor neighborhood after a report showed that the utility violated state and federal pipeline safety regulations.

The five-member state commission unanimously agreed to open a case that could lead to slapping PG&E with fines for the explosion. In November, PG&E agreed to pay $38 million—the largest safety-related penalty ever issued by the utilities commission—for the Christmas Eve 2008 blast that killed a Rancho Cordova homeowner. Some say the fines resulting from the 2010 San Bruno pipeline explosion are expected to dwarf those penalties.

A 171-page staff report by the CPUC's Consumer Protection and Safety Division found that the rupture of Line 132, the pipeline that exploded near Glenview Drive and Earl Avenue, leaving eight people dead and 38 homes destroyed, was caused by:

• PG&E’s failure to follow accepted industry practice when installing the section of pipe that failed,
• PG&E’s failure to comply with federal pipeline integrity management requirements,
• PG&E’s inadequate record keeping practices,
• deficiencies in PG&E’s data collection and reporting system,
• inadequate procedures to handle emergencies and abnormal conditions,
• PG&E’s deficient emergency response actions after the incident, and
• a systemic failure of PG&E’s corporate culture that emphasized profits over safety.

"We are now, essentially, giving PG&E its day in court," CPUC President Michael Peevey said in a statement. "If we determine PG&E has violated the law, we are prepared to impose very significant fines."

In a response to the announcement, PG&E President Chris Johns said the company is taking the CPUC's findings seriously and will fully cooperate with the investigation.

"It is clear that PG&E’s past gas operations practices were not what they should have been," Johns said in a statement. "We have admitted these shortcomings, and we are committed to raising the level of pipeline safety to new, higher standards.

"Nothing is more important to us, and our customers, than making sure our operations are as safe as possible," he continued. "To that end, we have already made fundamental changes to our gas operations and are continuing with our aggressive plan to make further improvements."

San Bruno Patch will update this story as more information becomes available. To check out the CPUC's report related to the penalty case being opened against PG&E, visit www.cpuc.ca.gov/puc/sanbrunoreport.htm.