PG&E Faces an $11M Fine for Gas Blast

By Published On: November 30, 2014

A Pacific Gas & Electric gas pipeline explosion in Carmel earlier this year has resulted in a $10.85 million fine. The penalty stems from a pipe that leaked gas into an empty cottage that exploded on March 3. The California Public Utilities Commission slapped on the penalty the same day it fined PG&E $1 million for violating ex parte rules governing communications with regulators and their staff in its 2015 gas storage and transmission rate case. Combined, shareholders are on the hook for the nearly $12 million in fines. The commission also launched a penalty case on PG&E’s record keeping for its gas lines. PG&E is reviewing the matter, but stated it has “made significant enhancements to our protocols to address public concerns and CPUC recommendations.” The utility has 10 calendar days to appeal the latest fine, according to its Nov. 21 filing to the Securities and Exchange Commission. The utility is appealing the $1.05 million fine by the commission for improper exchanges in which PG&E sought to get the judge of its choice assigned to its gas rate case. The company is proposing a $555 million rate increase (Current, Nov. 21, 2014). The utility stated the commission’s sanctions “aren't warranted and that they may go beyond the commission’s legal authority.” In the Carmel pipe blast, the commission’s Safety and Enforcement Division concluded that PG&E violated federal and state regulations that require it to make safe any hazards, and provide and maintain the equipment to ensure the safety of employees and the public. “The staff actions here—our form of a prosecutorial indictment—indicate that PG&E needs to do more,” said commissioner Mike Picker. The citation faulted PG&E for not giving its crew adequate tools “to stop the uncontrolled flow of gas,” and for not “attempting to make safe the area beyond the excavation hole, despite a possible indication gas was migrating.” The U.S. Attorney’s Office is also investigating the Carmel blast. There were no deaths or injuries.

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