CPUC fines PG&E $1.4 billion in San Bruno pipeline disaster

SAN FRANCISCO (KGO) -- Thirty-five homes were destroyed and eight lives were lost when a PG&E pipeline ruptured in San Bruno four years ago. Now, a lot of people are saying PG&E's record punishment doesn't do enough.

It's the largest fine ever levied by the California Public Utilities Commission. A pair of administrative judges found PG&E committed nearly 3,800 violations of state and federal laws, regulations, and safety standards dating back to 1956. The penalty for all of that is $1.4 billion.

San Bruno officials are saying they like the fine, but they don't like other aspects of it. However, this fine is not cast in stone. It goes into effect in 30 days, unless PG&E or another party to the proceeding files an appeal or if a commissioner wants to review it, then it goes back to those judges and ultimately to the commission for a vote.

The administrative law judges ruled that over several years PG&E committed nearly 4,000 violations of state and federal laws in operating its gas pipelines.

The two-judge panel decided to penalize PG&E $1.4 billion. The CPUC previously ruled that PG&E would have to pay $635 million -- all of that from its shareholders -- to make safety improvements in its pipelines. Add those two together, and the total penalty would be $2.03 billion. Of the $1.4 billion fine, most will go into the state's general fund. The rest will be used toward pipeline safety repairs.

While praising the amount of the fine, San Bruno Mayor Jim Ruane said he is disappointed most the money will go to the state. He said, "This reflects, if you will, a payday for Gov. Jerry Brown when we believe this money should instead be directed for a safer pipeline system."

It's almost certain the fine will be appealed. The consumer watchdog group The Utility Reform Network, or TURN, told ABC7 News it plans to ask the judges to reconsider the distribution of the fine.

"$950 million going to the state general fund and $450 million that's going to repair the pipelines, we want to see those numbers reversed," Mark Toney from TURN said.

PG&E told ABC7 News, they're still dissecting the judge's ruling.

"PG&E has made billions of dollars already in improvements to the gas system and that's what we want to make sure is taken into account here. And that the final decision that CPUC votes on is taking all that investment into consideration," PG&E spokesperson Greg Snapper said.

PG&E still faces federal criminal charges stemming from the gas line explosion.