Citi Reports PG&E Fined $16.8M for Failed Pipeline Leak Surveys

According to a research report published today by Citi, PG&E Corp. (

) has been fined $16.8M by the California Public Utilities Commission (CPUC) for failed pipeline leak surveys under a new citation program. In the report, Citi explains, “The magnitude of the Staff's recommended fine is high (we believe in the top 5 utility penalties in state history), and suggests Staff may be overly exuberant in its newfound authority. If the new fast-tracking citation program means record-level fine assessments for each violation, we would likely heavily consider a valuation discount for future gas pipeline infrastructure investment to reflect unforeseen heavy-handed penalties in the future, particularly in a San Bruno-charged environment.” Citi maintains its Buy rating and $47 PT on PG&E, which closed yesterday at $40.40.