PG&E Indicted on 12 Criminal Charges of Violating Pipeline Safety Standards

April 2, 2014 8:00 am · 25 comments

PG&E Co. was indicted by a federal grand jury on 12 criminal charges of violating a U.S. pipeline safety law, including several counts specifically related to the fatal explosion of a natural gas pipeline in San Bruno in 2010.

The indictment alleges the San Francisco-based utility company “knowingly and willfully” violated requirements of the Natural Gas Pipeline Safety Act of 1968 for maintaining adequate records, evaluating risks of pipeline corrosion and leaks, and prioritizing and addressing potential threats between 2003 and 2010.

The rupture of a high-pressure PG&E transmission pipeline known as Line 132 and the subsequent explosion and fire in San Bruno on Sept. 9, 2010, killed eight people, injured 58 others, destroyed 38 houses and damaged 70 other buildings.

The segment of the line that ruptured was installed in approximately 1956 and had a defective seam weld, but was incorrectly listed in PG&E records as seamless, the indictment said.

“Pacific Gas and Electric Co. knowingly and willfully failed to gather and integrate existing data and information on a line, specifically Line 132, that could be relevant to identifying and evaluating all potential threats on covered segments of that line,” the grand jury charged in the first of the 12 counts.

Other counts in the indictment accuse the company of failing to maintain records on repairs to Line 132, failing to evaluate potential threats, failing to select the most suitable method to assess potential threats and failing to prioritize high-risk segments of the line.

Other counts carry similar charges related to two other lines.

U.S. Attorney Melinda Haag said no date has been set thus far for the company’s arraignment before a federal magistrate.

If PG&E is convicted, the penalty for each count would be a fine up to $500,000 or the amount of either the loss caused to victims or the financial gain the company made as a result of the violation.

The indictment was expected because PG&E Co. and its holding-company parent, PG&E Corp., announced in a filing with the U.S.

Securities and Exchange Commission last week that they anticipated criminal charges because settlement negotiations had been unsuccessful.

“The citizens of Northern California deserve to have their utility providers put the safety of the community first,” Haag said in a statement.

The indictment “reflects the company’s failure to follow that very basic principle,” she said.

PG&E Corp. said in a release that it will seek to demonstrate during court proceedings that the charges “have no merit,” while staying focused on its goal of “building the safest and most reliable natural gas system in the country.”

“San Bruno was a tragic accident. We’ve taken accountability and are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so,” said PG&E Corp. Chairman Tony Earley, who was brought in to lead the company after the explosion.

The company said it believes its employees did not intentionally violate the law.

San Bruno Mayor Jim Ruane called the indictment “a measure of justice” and said PG&E should be strongly penalized by both the federal court system and the California Public Utilities Commission.

“One of the worst natural gas disasters in American history was caused by PG&E’s gross misconduct. PG&E and its executives should get the harshest penalty to prevent this from ever happening again,” said Ruane.

In an administrative proceeding, the Public Utilities Commission is currently considering how much to fine PG&E for record-keeping and safety-compliance failures.

San Bruno has urged the commission to levy the maximum allowable penalty and fine, a total of $2.45 billion in after-tax funds.

PG&E provides natural gas and electricity to 15 million customers in Northern and Central California. It operates 6,000 miles of high-pressure natural-gas transmission pipelines as well as 40,000 miles of smaller distribution lines that deliver gas to houses and commercial buildings, the indictment said.

The company has previously settled claims of nearly $500 million with the victims and their families and is inspecting, repairing and retrofitting pipelines and converting paper records to a digital system, PG&E said.

RELATED STORYPG&E Tree Removal Proposal Sparks Angry Response from Eight City Mayors, Including Concord, Clayton, Walnut Creek & Martinez

waverunner April 2, 2014 at 8:32 AM

We can be assured when THEY pay, WE will pay too.

JLG April 2, 2014 at 8:33 AM

Since corporations are people now. Does that mean the death penalty applies.

Michelle April 2, 2014 at 8:50 AM

I hope this will keep them from cutting down our trees–or will this have anything to do with the decision.

Rates will be going up April 2, 2014 at 8:58 AM

no matter what is said or ruled. The rate payers always pay in the end and through the end.

NRA #1 fan and member April 2, 2014 at 9:06 AM

PG&E sucks!!! Nobody ever talks about the fake bankruptcy they had or the rolling blackouts……I wont forget PG&E, I dislike PG&E more than Oaklnd, Richmond, Antioch thugs.

Anon777 April 2, 2014 at 9:29 AM

But who’s going to make sure that WE THE PEOPLE are not the ones paying the fines? PG&E should be restricted from increasing rates for a period of time so that the customers are not getting the brunt of this.

Justin April 2, 2014 at 9:31 AM

So….anyone fired? Jailed? No?

Cool, so we’ll see some jacked up rates to cover the settlement and march on.

Local Guy April 2, 2014 at 9:34 AM

Get ready for a rate increase..

The Biz April 2, 2014 at 10:00 AM

Wow, PGE indicted on criminal charges. Wonder if there will be any jail time? Oh, wait, no responsibility or accountability? Nevermind.

Lake April 2, 2014 at 10:32 AM

Time to go solar. Time to change PUC restrictions that make make PG&E an antitrust violating monopoly that prevents individual solar generating home owners from selling excess solar on the grid. Take the PUC cap off and let the free market prevail.

Shelly April 2, 2014 at 11:20 AM

Anybody remember the rolling blackouts? When PG&E all. of a sudden had a “parent company” named ENRON? Spelled the demise for Gray Davis’ Governorship and we oh so wisely elected the action hero and Spermanator.

Cartman April 2, 2014 at 11:21 AM

Boil them.

Gerald Bartholomue Everyman Johnson SR. April 2, 2014 at 11:22 AM

Maybe they can sell some of the “top secret” office floors on Market Street(in SF) and give the money to the victims?

EdiBirsan April 2, 2014 at 11:58 AM

While there is all sorts of action by cities on the issue of cutting down our trees on PUBLIC land and right of way, PGE is still going very active on the private property owners claiming agreement with 141 out of 151 home owners to cut their trees and have their structures moved/destroyed.

However, these private agreements were before the publicity and the more in depth information behind the move and the alternatives that can be considered as well as the scope of effects on neighborhoods, property values and the simple rights of the owner to say no.

Per a PGE spokesman, if you have agreed to have them alter your landscape and now want to reconsider, you should immediately contact PGE to halt their on going cutting of private trees from their initial push.


Anonymous April 2, 2014 at 12:05 PM

“So….anyone fired? Jailed? No?
Cool, so we’ll see some jacked up rates to cover the settlement and march on.”

Unfortunately, Justin nailed it. Makes me sick, but unless the money comes out of the personal bank accounts of the top execs (which it won’t) life just goes on as usual. We, the rate payers, will continue to pay for their screw-ups.

Silva April 2, 2014 at 12:49 PM

Oh yeah, rates are going to rise.

Suzie April 2, 2014 at 1:09 PM

Gas? There is always a begging by the administration for a rise in prices.

Dorothy April 2, 2014 at 1:25 PM

@ #2 – “Since corporations are people now. Does that mean the death penalty applies.” No, it means their religious freedoms are applied. They don’t believe in record keeping or safety.

TinFoiler April 2, 2014 at 5:55 PM

Shelly, Do you need to be schooled again? Go to Youtube and research Enrons SCREWING of everyone including pge ~ it’s a Shame that pge never said anything about this. I don’t defend pge, just truth – and ENRON was a Scam created by stockbroker types.
Look it up.

Anon April 2, 2014 at 7:31 PM

Ya! Sue the HELL out of PG&E! oh wait will they past that cost on to us, 10 fold??????

Anon April 2, 2014 at 7:31 PM


past = pass

KAD April 2, 2014 at 9:17 PM

An employee of the PUC was killed in this explosion.

Anon April 3, 2014 at 4:58 AM

Sorry to say it but the PUC is nothing but a blank check for PG&E.

ANNONeeemoose April 3, 2014 at 12:43 PM

Criminal. Hmmmm. So if found guilty. Who goes to jail? Who stands up in court to be held accountable?

Shelly April 3, 2014 at 4:05 PM

So.. TinFoiler, that was not my point.

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