California Utility PG&E Faces Proposed $1.4 Billion Fine

After nearly four years of deliberations, a pair of administrative law judges working for California’s Public Utilities Commission (“CPUC”) has recommended a $1.4 billion dollar fine against California’s largest utility for events stemming from a pipeline explosion in San Bruno, a suburb of San Francisco in 2010.

The judges wrote four separate decisions, which is problematic for a state agency attempting to recover from significant criticism for years of lax oversight. That criticism showed no signs of abating, however, as stakeholder after stakeholder came forward to criticize the fines.

The recommendations call for nearly $1 billion of the $1.4 billion dollar fine to be sent to state coffers. Such a redirect is not only contrary to the basic tenants of regulatory safety, it is in effect the same behavior the CPUC criticized PG&E PCG -0.42% for undertaking. Part of the CPUC’s allegations against the utility are based on what it calls “years of deferred spending on infrastructure.”  San Bruno Mayor Jim Ruane put it this way during an interview with the local ABC affiliate: “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.” Safety advocates were also displeased. Mark Toney of The Utility Reform Network (TURN) said that not enough money was being allocated for pipeline repair.

Read the full article at Forbes. 

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