PG&E Should Pay ‘Significant Fine’ for Pipeline Explosion

PG&E Corp., owner of the state’s largest utility, should pay a “significant fine” for a 2010 natural gas pipeline blast that killed eight people, the head of the California Public Utilities Commission said.

While the commission can also penalize the company by disallowing certain costs, a fine is something the “public understands,” President Michael Peevey said during an interview at the commission’s headquarters in San Francisco yesterday. He would like the company to reach a settlement with regulators by the end of the year, he said.

The commission is considering penalties after beginning three separate investigations into the blast that destroyed 38 homes in San Bruno, California. Violations of federal and state safety laws by San Francisco-based PG&E led to the disaster, the commission’s staff said in a January report.

Commission staff last week asked judges hearing several PG&E cases at the agency to suspend hearings while they engage in settlement talks with the company. PG&E has set aside $200 million for potential fines resulting from the inquiries, according to an Aug. 7 investor presentation.

PG&E would like to reach a settlement by year end, Chairman and Chief Executive Officer Tony Earley said during an Aug. 7 conference call.

“We support negotiations that will work toward a universal settlement and we will continue to work with the commission,” Brittany Chord, a PG&E spokeswoman, said in a phone interview.

A settlement would require public hearings and approval by the five-member commission, Peevey said. Without a deal, hearings would extend into the middle of next year, Peevey said.

“It’s in everyone’s interest that we put this behind us,” he said.

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