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Is $1.4 Billion Enough Punishment for Deadly Natural Gas Explosion?

With a final decision expected later this year, the California Public Utilities Commission recommended a $1.4 billion fine for PG&E in connection with violations leading to a natural gas explosion in 2010.
September 6, 2014, 9am PDT | James Brasuell | @CasualBrasuell
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"State regulators on Tuesday proposed a $1.4 billion fine to punish PG&E for its role in a fatal natural gas explosion in San Bruno -- but the fines are far less than the $2.25 billion recommended by regulatory staff and consumer groups," reports George Avalos.

Two administrative law judges with the state Public Utilities Commission (PUC) recommended the fine. If finalized, the fine would be the largest safety related penalty ever issued by the PUC.

The PUC's Office of Ratepayer Advocates pushed for a much larger fine of $2.25 billion. If there is any indication that the lower penalty was good news for PG&E, the market provided one: "Shares of PG&E soared 3.5 percent soon after word spread of the proposed decision and spiked an intra-day high of $47.78 in late-session trades. PG&E closed at $47.29 on Tuesday, up 1.7 percent."

As for the negligence that precipitated the explosion in San Bruno, which killed eight people and destroyed 38 homes, "San Francisco-based PG&E committed about 3,800 violations of state and federal laws and regulations in connection with its natural gas operations, and because the infractions stretched back a period of years, the utility was in violation for a total of 18.4 million days, the proposed decision determined."

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Published on Friday, September 5, 2014 in San Jose Mercury News
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