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$10 Million To Upgrade San Bruno Pipeline Diverted While PG&E Execs Got Bonuses Before Deadly Explosion Says PUC Chief

SACRAMENTO (CBS SF) -- In what sounded like damning testimony to state senators, the new head of the California Public Utilities Commission said Pacific Gas & Electric took millions from ratepayers earmarked for San Bruno pipeline upgrades and diverted it to boost profits and give bonuses to top executives, according to the Los Angeles Times.

In a senate committee hearing Thursday, CPUC president Michael Picker Picker said, "In some cases, the utility did divert dollars we approved for safety purposes for executive compensation."

Picker told the Los Angeles Times that he is gathering yet more evidence that PG&E put off maintenance work. He took over the top position on the commission following the departure of Michael Peevey, who was criticized for the cozy relationship and back-channel discussions between the PUC and the utility it was supposed to regulate.

Gov. Jerry Brown announced new leadership Tuesday for the embattled Public Utilities Commission as he named a replacement for agency President Michael Peevey, who was roundly criticized for fostering a cozy relationship with the utilities the commission is tasked with regulating.

The Times reported the CPUC approved $5 million of ratepayer money in 2007 earmarked to replace parts of a 30-inch pipeline in San Bruno, and when the work wasn't done, the utility asked for another $5 million for the job in 2010.

No repair was performed before the pipeline exploded in San Bruno's Crestmoor neighborhood on September 9, 2010, creating an inferno that killed eight people, injured 66, and destroyed dozens of homes.

PG&E spokesman Donald Cutler released a statement saying, "Even predating the San Bruno accident, the company has spent more on the safety of its gas system than provided for by its regulators, and since the explosion, it's spent or committed to spend more than $2.8 billion of shareholder funds ... on gas system enhancements."

On Wednesday, PG&E disclosed that top executives had received even more raises in 2014, according to The San Jose Mercury News.

The president of PG&E, Christopher Johns, earned $6 million last year in total compensation, a 44.1% raise since 2013, according to the Mercury News.

"The majority of compensation for senior executives is shareholder-funded and dependent on achieving targets related to safety, reliability and other results," PG&E spokesman Jonathan Marshall told the newspaper.

The PUC is set to finalize the penalties for PG&E's culpability in the explosion next month, and the new president is asking for $1.6 billion in fines.

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