After threatening to file for bankruptcy this week in response to a potential $2.25 billion penalty, Pacific Gas & Electric said the state\u2019s revised penalty, for havoc wreaked by its gas pipeline blast in San Bruno that killed eight people, is illegal and out of regulatory bounds. \tIn their Aug. 21 filing to the California Public Utilities Commission, PG&E attorneys stated that measuring the reasonableness of the penalty against whether it would harm PG&E\u2019s creditworthiness \u201cis not a legitimate starting point.\u201d They added that the first proposed penalty, which \u201cwas 22 times the largest penalty ever imposed for a natural gas pipeline accident, has grown to nearly 40 times that amount.\u201d The utility claimed that only the $300 million of the total $2 billion-plus penalty to head to the state general fund is legitimate. The utility insists that not allowing it to count incurred natural gas pipeline safety enhancement investments towards the $1.9 billion fine is unreasonable. The commission\u2019s Consumer Protection & Safety Division\u2019s revised penalty, according to the utility, \u201camounts to a backdoor attempt to modify the [proposed decision] and disallow costs a unanimous commission found reasonable just eight months ago.\u201d The city of San Bruno cried foul over PG&E\u2019s bankruptcy threat and challenge to the $2.25 billion penalty. \u201cThe company\u2019s solid financial footing and multiple expert findings are partly what guided the $2.25 billion recommendation of the CPUC\u2019s safety division,\u201d stated San Bruno spokesperson Sam Singer. Meanwhile, elsewhere at the commission, the veracity of PG&E natural gas pipeline record keeping and adequacy of its pipeline inspections remain center stage. Last fall, weakened welding seams in the gas pipeline running south of San Bruno were said to be discovered but not accurately revealed. Two commission administrative judges stated they were concerned by the \u201ccontinuing inaccuracy of PG&E's records and the happenstance means by which this most recent instance of erroneous records was discovered.\u201d The matter is set to be heard next month.