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Showdown over PG&E Penalties for San Bruno Explosion

by: Brian Leubitz

Tue Jun 18, 2013 at 07:32:12 AM PDT

PG&E calls CPUC's $2.25 Billion Fine Excessive

by Brian Leubitz

In 2010, one of PG&E's main gas lines exploded, killing 8 people, and injuring many more. Since that time, we have discovered that PG&E hadn't properly inspected the lines, and continued to resist the real work that was necessary to maintain system safety.

The CPUC has proposed that the company be fined $2.25 billion, with administrative law judges scheduled to rule on that soon. The Commission is rather fed up with PG&E at this point. Director of Consumer Safety Jack Hagan had this to say:

PG&E's brief on penalties displays a chilling lack of remorse for the many failures that led up to the tragedy in San Bruno. I believe the lack of remorse by PG&E in its brief only serves to reinforce the need for the Commission to impose the very substantial $2.25 billion penalty I have proposed.
PG&E's lack of remorse is particularly evident in the section of its brief entitled "Severity of the Offense." Although PG&E commences that section of the brief with a statement of "regret" for the incident in San Bruno, the gist of PG&E's argument is "don't blame us." ... PG&E's statements of "regret" ring hollow in the face of this continuing lack of any sincere remorse whatsoever for the Company's past shortcomings. If there was ever any doubt about the need for a very large penalty in this case, any such doubt is removed by the unrepentant tone of PG&E's brief. It is time to throw the book at PG&E(H/t to KCET)

Now, this "fine" is rather misleading. Even if they would be fined that large amount, the current proposal is for the money to be required to spend on safety improvements. And as a bonus, the company would get about $900 million back of that in tax benefits. Now, normally PG&E likes to charge customers for these kinds of expenses, but given that the system needs far more than $2.25 billion of safety improvements, this is hardly the end of the world for them. They can still try to recoup some of the other safety costs and the money really goes back on to their system.

You can read Hagan's full reply brief here. We should get a decision on the fine by the end of the summer.

Photo credit: ABC7.

Brian Leubitz :: Showdown over PG&E Penalties for San Bruno Explosion
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Isn't it time to replace the 'Leadership' of the CPUC ??
They continue to coddle the utility companies
They seem to be ineffectual
Why not start replacing their mis-leadership ?

Can the governor replace some of the Leadership with the approval of the State Senate ?

The State PUC is Brown's team (0.00 / 0)
Four of the five Commissioners were appointed by Brown (and received Senate confirmation) in the past 2+ years.  These are political appointees.  The Pres. of the PUC (Peevey) was appointed by Graywater Davis in 2002 and re-appointed by AhNuld in 2008.  His term expires in 2014.  He was Pres. of SoCal Edison previously  and appears to have "mailed it in" for the past few years as he ends his term without much to show.

The Brown appointees appear to be a mixed bag of skills and experience-

Carla Peterson was just recently appointed; she is/has completed her PhD at UC Berkeley in Energy and Resources and so has some knowledge of energy policy.

Mark Ferron was a career "money changer" at B of A and Investment banks (almost all of his career in England!).  He moved to Marin to start a "do good" career and was a volunteer for Brown's election campaign.

Catherine Sandoval has worked at the FCC and Housing Dept. and is a Law School Prof.... so she has some good experience in government.

Mike Florio is another attorney who spent considerable time at the Utility Reform Network.

The Commissioners are paid from $115,000 to $120,000 annually for their service.

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