PG&E faces an astounding $2.25 billion penalty for its failure to “follow industry standards” that contributed to the San Bruno disaster. However, the penalty is not a fine paid to the general fund but is mandated safety spending for its network of pipelines in the state.
The amount of the proposed penalty is more than 20 times greater than the next-most expensive penalty levied due to gas line explosions, and the CPUC has designed the penalty to ensure safer pipelines in the state. The San Bruno City Manager, however, would have liked to see punitive damages paid via a fine.
PG&E has already called the penalty “excessive” and has claimed that the penalty will make improvements to the system more expensive to finance. The $2.25 billion penalty would be weighed against improvements already made, which are valued at $1 to $1.4 billion. That represents about one year’s worth of profits. The entirety of the penalty would be borne by shareholders and not ratepayers.
Read the full story at the San Jose Mercury News.