PG&E: Pipeline Explosion Claims Will Cost $565M

By SUDHIN THANAWALA Associated Press
|  Tuesday, Sep 10, 2013  |  Updated 3:38 PM PDT
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San Bruno Aftermath: a Look Back

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 Pacific Gas & Electric Co. expects to pay a total of $565 million in legal settlements and other claims from a deadly 2010 gas pipeline explosion in a San Francisco Bay Area suburb, the utility said.

The figure includes $455 million that PG&E has already agreed to pay and $110 million it expects to pay in connection with recent settlements and remaining claims, PG&E said in a filing with federal regulators on Monday.

The company reached settlements with 347 San Bruno blast victims on Friday and Monday, PG&E spokeswoman Brittany Chord said.

It had previously reached settlements with 152 people. Two plaintiffs' cases remain. Asked what was holding up the two remaining cases, Chord said she could not speak to the specifics of any particular case.

"We are committed to resolving these matters as quickly and as fairly as possible,'' she said.

The money for the claims will come from shareholders, not ratepayers, Chord said. Some portion will also be covered by insurance. ``It's a huge deal,'' attorney George Corey, whose firm represented about 120 of the victims, told the San Jose Mercury News.

``It took a long time for PG&E lawyers to get the company to stand up to the serious facts of this case. But they finally did, and it was fair.'' The explosion of a high-pressure transmission line on Sept. 9, 2010, sparked a gas-fueled fire in San Bruno that destroyed 38 homes and laid waste to parts of the same neighborhood.

Eight people died, and others suffered burn injuries. PG&E was hit with about 160 lawsuits from people who lost family members, suffered injuries or had property damage.

The National Transportation Safety Board has blamed failures by PG&E and weak oversight by regulators for the blast, which it said was directly caused by substandard welds and other problems dating back to the installation of the pipeline decades earlier.

The company's inadequate inspection program for pipelines, which allowed the bad welds and other weaknesses to go undetected, also contributed, the board said. State investigators have said PG&E violated safety rules and kept poor records.

PG&E has accepted liability for the disaster in numerous public statements but has denied most of state investigators' allegations.

PG&E is also facing a potential $2.25 billion penalty that includes required system upgrades and a $300 million fine. State regulators recommended the fine in July, saying it would amount to the largest fine ever levied by the state Public Utilities Commission.

Mindy Spatt, a spokeswoman for the San Francisco-based Utility Reform Network, a watchdog group, said PG&E needed to be held accountable for mismanaging its pipeline system.

"After the explosion, every PG&E customer probably wondered, will I be next, and those concerns are not addressed in this settlement,'' she said. "The settlement is meant to resolve these individual cases, but it is still the PUC's job to resolve the harm done to PG&E customers as a whole.''

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