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PG&E’s $1.4 Billion San Bruno Fine: Huge But Less Than Expected

Publication Date: 
September 02, 2014
Source: 
KQED - News Fix
Author: 
Jon Brooks

Visiting Professor Michael Asimow spoke with KQED's Jon Brooks on how the fine imposed on PG&E for the 2010 San Bruno pipeline blast will be a "huge deterrent" for companies going forward. 

California regulatory judges have issued a $1.4 billion penalty against PG&E, the state’s largest utility, for violations related to the 2010 San Bruno pipeline explosion that killed eight people, destroyed 38 homes and prompted national alerts about aging pipelines.

The California Public Utilities Commission on Tuesday announced the figure, reached by two administrative law judges. The CPUC said the fine was the largest safety-related penalty it had ever imposed. The commission ordered that the penalties be paid by PG&E shareholders rather than ratepayers.The Utility Reform Network, a ratepayer advocacy group, maintained PG&E could raise rates in other cases to indirectly offset the penalty.

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PG&E can appeal the fine. If it doesn’t, or if a CPUC commissioner does not request a review, the decision will take effect in 30 days. Michael Asimow, a visiting professor of law at Stanford and an expert on administrative law, told KQED that PG&E will almost certainly appeal, and that the commission would then have to vote on the penalty before it became final. Beyond that, PG&E could request judicial review by the courts.

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But Asimow said the fine was the “biggest civil penalty I’ve ever seen an administrative agency, either state or federal, actually charge. … This is a huge deterrent. The PUC makes clear these penalties have to be paid by the shareholders, they’re not going to be reflected in the rate base. This represents quite a hit to the value of PG&E.”