PG&E fined $1.4B for deadly 2010 gas line blast

SAN FRANCISCO - California regulatory judges issued a $1.4 billion penalty on Tuesday against the state's largest utility for a 2010 gas pipeline explosion that engulfed a suburban San Francisco neighborhood in fire, killing eight people and prompting national alerts about aging pipelines.

The California Public Utilities Commission said the figure reached by two administrative law judges against Pacific Gas & Electric Co. would be the largest safety-related penalty it had ever imposed. PG&E can appeal the fine.

An email to a company representative for comment was not immediately returned. But PG&E said in a statement it fully accepts that a penalty is appropriate.

"We have respectfully asked that the commission ensure that the penalty is reasonable and proportionate and takes into consideration the company's investments and actions to promote safety," PG&E said.

The commission previously ordered PG&E to pay $635 million for pipeline modernization in the wake of the Sept. 9, 2010, blast in the suburban San Francisco community of San Bruno. It was California's deadliest utility disaster in decades.

A 30-inch natural-gas transmission line installed in 1956 ruptured, destroying more than three dozen homes. At the time, survivors described the heat of the blast burning the back of their necks like a blowtorch as they ran away.

A 2011 investigation by the National Transportation Safety Board concluded that the rupture occurred in a weak weld in a pipeline that PG&E records had shown as being smooth and unwelded. PG&E neglected to shut off natural gas feeding the fire until 95 minutes after the blast, the federal investigators said.

The 2011 probe found PG&E's safety management of its pipelines overall deficient and ineffective. At the same time, the federal board also faulted what it called the ineffectiveness of California's Public Utilities Commission in regulating the power utility, whose service area covers all but the southern one-third of California.

This year, federal prosecutors separately indicted PG&E on 27 counts alleging the utility violated pipeline-safety requirements. Another federal count alleges PG&E lied to the National Transportation Safety Board in that agency's investigation of the San Bruno blast.

PG&E faces additional fines of more than $1 billion if convicted of the federal charges, which are separate from the financial penalties that the California state administrative judges weighed.

PG&E pleaded not-guilty to the federal counts earlier in August.