Calif. AG questions utility board's decision

Jessica M. Karmasek Mar. 29, 2011, 1:43pm


SACRAMENTO, Calif. (Legal Newsline) - California Attorney General Kamala Harris is among those criticizing the state Public Utilities Commission's plan to cut PG&E's fine for failing to submit pipeline safety documents to state regulators.

The Mercury News reported Monday that the commission proposed fining Pacific Gas and Electric Company $3 million instead of upwards of $100 million.

"We seriously question whether the amount is sufficient to serve the purposes of punishment and deterrence," Janill Richards, a supervising deputy with Harris' office, told the Mercury News in response.

The company must change its mindset, Richards said after a commission hearing held Monday. The evidentiary hearing was held before an administrative law judge and two commissioners.

On Jan. 3, the utilities commission directed PG&E to submit pipeline records by March 15 following PG&E's pipeline rupture in San Bruno on Sept. 9. The explosion killed eight people and destroyed 38 homes.

After reviewing PG&E's submission, the commission's staff said PG&E did not respond to its order to comply with its directives to compare installed pipe to as-built drawings and other records in order to be certain the proper maximum pressure has been established for pipelines.

Instead, PG&E relied on the determination of maximum pressure based on the historical high operating pressure, the commission said.

The commission's directive and the National Transportation Safety Board's recommendation called for PG&E to find, to the extent possible, a basis for setting maximum pressure by means other than the grandfathering method described in PG&E's response.

The commission, in a news release last week, said it had reached a stipulated outcome with PG&E, fining the company $6 million in shareholder funds for failure to comply with the commission's order and requiring PG&E to operate under a compliance plan to complete the commission's directive.

Of the $6 million, $3 million would be immediately payable to the state's General Fund and the other $3 million would be suspended if PG&E hits milestones in their records search process and completes its records search for information on grandfathered pipes by Aug. 31, 2011, the commission said.

At one point, the commission was considering a fine of $1 million for each day the company failed to produce the documents.

The deal has yet to be approved by the five-member agency, according to the Mercury News.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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