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TMCNet:  San Bruno Commends U.S. Criminal Charges Against PG&E For Fatal 2010 Explosion and Fire, Calls Charges

[April 01, 2014]

San Bruno Commends U.S. Criminal Charges Against PG&E For Fatal 2010 Explosion and Fire, Calls Charges "A Measure of Justice"

SAN BRUNO, Calif. --(Business Wire)--

Calling the action "a measure of justice," City of San Bruno officials today applauded the U.S. Attorney's criminal findings against PG&E (News - Alert) for 12 violations of federal safety rules that caused the death of eight of its citizens, injured 66 and leveled an entire neighborhood on Sept. 9, 2010.

"One of the worst natural gas disasters in American history was caused by PG&E's gross misconduct. PG&E and its executives should get the harshest penalty to prevent this from ever happening again," said San Bruno Mayor James Ruane.

With final decisions imminent from the California Public Utility Commission on administrative penalties and fines against PG&E for the explosion and related recordkeeping and safety compliance failures, Ruane repeated demands by San Bruno and safety advocates that "PG&E be fined the maximum amount allowable by law of $2.45 billion (pre-tax $3.8 billion penalty/fine) and that an Independent Monitor be put in place as the City has called for during the past three years of investigation."

"We simply have no faith in either PG&E or the CPUC to ensure that safety improvements will be made. An Independent Monitor is critical to ensure public safety and restore public confidence," he added.

"The eyes and souls of our city and the entire State are on the CPUC now," Ruane said. "The cozy relationship between PG&E and the CPUC that led to this preventable tragedy must end now. San Bruno expects the stiffest, harshest penalty and remedies by the CPUC against PG&E to demonstrate that it can carry out the fair application of the law for all our citizens."

Condemning PG&E for its "gross misconduct that resulted in the unnecessary, tragic and fatal disaster," Ruane said the criminal charges validate the city's position the PG&E pipeline explosion should result in punishment to the greatest extent of the law.

"We commend the work of the U.S. Attorney's office and the state and local task force for its diligent investigation that resulted in these criminal charges against PG&E," he said. /p>


"Multiple civil investigations found PG&E's tragic explosion to be entirely man-made and the result of PG&E's willful decision to divert pipeline safety funds and use them for executive compensation and shareholder returns for many decades," Ruane said.

"We have long believed PG&E's decisions warranted more than just civil liability, and we are heartened to know that the federal criminal task force agrees. On behalf of the victims, their families and the thousands of San Bruno residents for whom the devastating events of Sept. 9, 2010 will forever be seared in memory, we hope the outcome of this criminal prosecution brings some closure and a measure of justice for this senseless loss of life," he added.

Ruane said he and the city are still disappointed in the lack of any measurable and meaningful reforms of the CPUC.

"We hope the leadership demonstrated the U.S. Attorney's Office will finally get Governor Brown and Attorney General Harris to see the seriousness of PG&E's safety transgressions and the lack of proper oversight by the CPUC. These criminal charges should encourage them to take strong action against both the utility and the CPUC and show their independence from PG&E's deep political influence that led to this disaster in the first place," Ruane said.

In addition to monitoring the outcome of the most recent criminal prosecution of PG&E, the San Bruno is also awaiting the conclusion of the long-running penalty proceeding at the California Public Utilities Commission.

More than three years after the explosion, the CPUC's administrative law judges are expected to issue their recommended penalty in the coming weeks, after which the CPUC's five-member commission will ultimately determine how much PG&E will be forced to pay for the fatal explosion that federal and state investigators determined was preventable and the result of multiple and pervasive organizational and system failures reaching back decades.

San Bruno officials have demanded PG&E face a maximum penalty and fine against PG&E of $3.8 billion, amounting to $2.45 billion in after-tax dollars, given the scope and magnitude of PG&E's gross misconduct. This penalty would be in addition to any criminal fines faced by the company and would fund ongoing safety improvements. It would also be structured such that shareholders - not ratepayers -- will be forced to cover these costs, saving ratepayers from shouldering about 20 percent of PG&E's total capital needs.

It is projected that PG&E will need to spend nearly $10 billion in the coming years to test and replace its gas lines because PG&E historically failed to track and maintain those lines.

In addition to monetary penalty, San Bruno has also continued to advocate for a series of critical remedial measures that will ensure systemic regulatory change in the future and would be funded by PG&E. These include an Independent Monitor to ensure PG&E follows its own safety plan in the face of possible lax enforcement by politically appointed CPUC Commissioners with close ties to utilities.

It also includes the installation of lifesaving Automated Shutoff Valves and $5 million per year for a "California Pipeline Safety Trust," which will serve as a legacy to this tragedy and will function as an important, impartial advocate for pipeline safety.

Ruane said he hopes the conclusion of both the criminal and CPUC proceedings will help bring closure by holding PG&E accountable for its wrongdoing. Going forward, Ruane said he also hopes that both judgments will send a strong signal to utility companies across the country that significant reform is needed because this nation's vulnerable pipeline infrastructure cannot withstand a business-as-usual mentality.

"At the end of this long road, we can only hope that one community's heartbreaking tragedy is another community's opportunity to address problems before they surface. Significant changes are needed nationwide to ensure that what happened in San Bruno never happens again, anywhere."


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