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Editorial: PG&E fine should go to pipeline improvements
September 03, 2014, 05:00 AM Editorial

No amount of money will make up for the loss of life, property and the overall well-being for those affected by the 2010 San Bruno pipeline explosion and fire, a $1.4 billion penalty issued Tuesday against Pacific Gas and Electric puts a monetary figure on the loss.

Unfortunately, a significant chunk of that penalty will go directly to the state rather than used for pipeline safety. Of the $1.4 billion, $950 million will go to the state’s coffers.

Last year, staff at the California Public Utilities Commission had recommended a $2.25 billion fine that would come from shareholders and not rate payers. Tuesday’s penalty is in addition to a $635 million penalty the CPUC issued previously. So the utility is on the hook for a significant amount of penalties for the blast that killed eight, injured dozens and destroyed 38 homes.

Having the fine go toward safety measures would make it tax deductible for the utility, so the money going to the state would be a larger hit. However, the fine should not just be punitive, though PG&E even admits it deserves some penalty for the explosion and fire. The cause of the blast was described as a “litany of failures” by the utility, at least according to the National Transportation Safety Board when reviewing the incident. Those failures were essentially a wake-up call for additional safety measures for the miles of gas pipeline in the utility’s service area. While PG&E has made improvements to its gas delivery service, much more could be done and using the entire amount for that goal should be the point of this action.

The ultimate goal is to ensure that a tragedy that took place in San Bruno never happens again. The entire amount of the penalty should go toward pipeline safety and not directly to the state. If that money finds its way into the state’s general fund, rather than specifically earmarked for safety testing and replacing and upgrading gas transmission lines, it is a total waste.



Tags: safety, penalty, state, utility, pipeline,

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Editorial: PG&E fine should go to pipeline improvements

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