UPDATE: CPUC Release Confirms $1.4B Penalty to PG&E Related to San Bruno Rupture

The California PublicUtilities Commission (CPUC) today issued four decisions by twoAdministrative Law Judges in connection with its investigationsof Pacific Gas and Electric Company's (PG&E) operations andpractices related to gas transmission, including the pipelinerupture in San Bruno, Calif., in 2010, penalizing PG&E $1.4billion, the largest safety related penalty ever levied by theCPUC.The Administrative Law Judges issued three decisionsestablishing the number of violations in connection with eachinvestigation. In the fourth decision, the Administrative LawJudges impose a penalty based on the total number of violations.The Administrative Law Judges found that in total, PG&Ecommitted 3,798 violations of state and federal laws, rules,standards, or regulations in connection with the operations andpractices of its gas transmission system pipeline. Many ofthese violations continued for several years, resulting in atotal of 18,447,803 days in violation.The $1.4 billion penalty, when combined with the amount that theCPUC previously ruled must come from shareholders forexpenditures to improve the safe operation of natural gaspipelines (R.11-02-019), exceeds $2 billion. The penaltyconsists of $950 million to be paid to California's GeneralFund, $400 million in pipeline improvements that cannot berecovered from customers (called a disallowance), andapproximately $50 million to be used to implement more than 75remedies to enhance pipeline safety, including $30 million forthe CPUC's Safety and Enforcement Division to hire independentauditors to audit PG&E's Pressure Validation project and ProjectMariner implementation, training for emergencies (City of SanBruno), establishing a centralized database to track locationand use of salvaged pipe in PG&E's gas transmission pipelinesystem, and to pay reasonably incurred litigation expenses ofintervenors.The penalty breakdown ordered in today's decisions is asfollows:-Fine to the California General Fund: $950 million-Shareholder amount toward PG&E's Pipeline Safety ImplementationPlan: $400 million-Shareholder amount toward more than 75 remedies proposed byparties: $50 million (est.) Total penalty from these investigations: $1.4 billion-Shareholder amount toward PG&E's Pipeline Modernization Program(disallowance previously approved in Decision 12-12-030):$635 million Total from these investigations and D.12-12-030:$2.035 billionThese penalties must be paid by PG&E's shareholders and are notrecoverable from PG&E's customers. Within 60 days PG&E mustsubmit a report to the CPUC providing the status of the progressand the timeframe for completion of each remedy ordered in thedecisions.The decisions of the two Administrative Law Judges are theculmination of the CPUC's investigations into PG&E's pipelinerupture in San Bruno (I.12-01-007), its pipeline recordkeeping(I.11-02-016), and its pipeline classification (I.11-11-009).The CPUC's Commissioners did not provide input or comment intothe decisions, nor did they have an opportunity to review thedecisions before their release today. This is standard processin these types of investigations.The decisions of the Administrative Law Judges will become thedecisions of the CPUC after 30 calendar days from today, unlessa party to the proceeding files an appeal or a Commissionerrequests a review. Should a party file an appeal of thedecisions or a Commissioner requests review, the AdministrativeLaw Judges will review the appeal and either make changes totheir decisions or keep them the same. The decisions would thencome before the Commissioners to consider at a Voting Meeting(although the Commissioners may discuss the decisions of theAdministrative Law Judges in a publicly noticed closed session,they can only vote on the decisions in open session).Commissioners also have the option of writing Alternatedecisions for consideration.The penalties announced today amount to the largest safetyrelated penalty ever levied by the CPUC. The next largest CPUCsafety related penalty imposed in the recent past was a $38million penalty against PG&E as a result of a natural gasexplosion on December 24, 2008, in Rancho Cordova, Calif.For more information on the CPUC, please visit www.cpuc.ca.gov.