Federal Prosecutors Back Away From Seeking Half Billion Dollars in PG&E Fines, Stunning San Bruno Leaders

In a surprise move while the jury is still deliberating, federal prosecutors on Tuesday walked away from seeking a half billion dollars in enhanced fines against Pacific Gas and Electric Co. on pipeline safety counts.

The government had sought as much as $562 million under the federal Alternative Fines Act, a proceeding that would have necessitated a second trial should the jury have found the company guilty.

The decision by prosecutors midday came without explanation. PG&E accepted the move in a separate filing.

The decision left San Bruno officials stunned.

“We’re surprised at this, we believe that the prosecution has put on a compelling case,” said City Manager Connie Jackson. “We look forward to guilty verdicts and that the appropriate penalties will be imposed by the judge.”

The city wants the judge to order that the company be overseen by a federal monitor, something that Jackson says is still possible based on the charges.

The original $562 million sum had been calculated as roughly twice the profit the company reputedly reaped by not properly testing and maintaining its gas pipelines, as alleged in 11 counts.

The company also faces a lone count of obstructing the federal National Transportation Safety Administration’s probe of the San Bruno blast in 2010. The explosion killed eight people and destroyed 38 homes.

Under the original charges, the company would now face about $6 million in fines -- $500,000 per allegation -- stemming from the 11 pipeline safety violations in the case as well as the lone obstruction count.

Under criticism, federal prosecutors originally amended the indictment to seek more fines under the alternative act in 2014.

The jury has been deliberating since last week. On Friday, the panel asked to see a presentation made by prosecutors during closing argument, access to a PG&E spreadsheet of pipeline data, as well as certain records of federally mandated pipeline pressure tests.

Earlier on Tuesday, Judge Thelton Henderson ruled that the prosecutors’ presentation was not evidence in the case and denied the jury’s request to see it. He allowed the panel to see the database spreadsheet and the individual stretches of pipeline and pressure test records at issue in the case.

PG&E issued a statement following the decision by the government.

“Regardless of this action or the next legal steps, we want our customers and their families to know that we are committed to re-earning their trust by acting with integrity and working around the clock to provide them with energy that is safe, reliable, affordable and clean.”

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