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May 6th, 2013:

$2.25-Billion Penalty Recommended in Natural Gas Blast That Killed 8

American Energy Coalition - May 6th, 2013

California regulators have recommended that utility giant Pacific Gas & Electric pay a $2.25 billion for its part in a 2010 natural gas explosion in San Bruno, Calif., that killed eight people and devastated a neighborhood, the Los Angeles Times reports.

"If approved by the California Public Utilities Commission, it would be by far the largest penalty ever levied by the agency," The Times reported. A report released by the Commission's Safety and Enforcement Division said its investigators found more than 100 violations by the company, some dating back decades.

"Imposing a fine for each violation ... would result in tens of billions of dollars of fines, which is more than PG&E's net worth," the Commission's report said. Regulators said they agreed on $2.25 billion "because PG&E needs to retain its creditworthiness in order to be able to pay for its improvements in the safety of its facilities, as well as to procure natural gas and electric power." The board also said the fine should be paid by PG&E shareholders, not ratepayers.

The Commission is not the first to blame the utility for the fatal gas explosion. The National Transportation Safety Board (NTSB) previously issued a scathing report blasting PG&E for "baffling" mistakes and a "litany of failures," the paper reported.

"Investigators from that agency determined the blast was triggered by maintenance work at a PG&E control center that caused electrical problems and a rise in gas pressure," the Times reported. "Investigators also noted it took the gas company nearly 95 minutes to shut off the gas spewing from the broken pipeline. The NTSB also faulted state and federal regulators, including the Public Utilities Commission, for lax oversight of the utility."

The September 2010 blast injured dozens and destroyed 38 homes when a 54-year-old pipeline exploded underneath the suburb south of San Francisco. Gas-fueled flames leaped 1,000 feet into the air, along with chunks of asphalt and the pipeline itself.

To read the Los Angeles Times article, click here.

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