PG&E to Contact IRS About Fine for Fatal San Bruno Pipeline Explosion

PG&E is raising eyebrows with a call to the IRS about its fine for the fatal San Bruno pipeline explosion.

There are fears the utility is trying to pass more than $800 million of the penalty on to taxpayers.

The deadly San Bruno explosion and fire was blamed on PG&E's shoddy maintenance, flawed record keeping and lax oversight. The utility was then hit with $1.6 billion in penalties, with $850 million to be spent on improving the safety of its natural gas system.

The California Public Utilities Commission told the utility the penalty could not be deducted as a business expense. The utility is now sending a 25-page letter to the IRS asking for clarification n how the $850 million should be handled, leading State Sen. Jerry Hill to cry foul.

"Well of course they are trying to write it off," Hill said.

Hill said just the act of asking for the clarification reveals the utility's intent.

"This was supposed to cost them money. This was supposed to be a penalty for them for their egregious illegal actions and the death of eight individuals in the City of San Bruno," Hill said. "That's what this is a payment for. That's what this is a penalty for. And they're trying to get out of it is frankly what they are doing."

PG&E has not actually sent the letter to the IRS. The utility is required to send a copy first to CPUC. A PG&E spokesman said the letter speaks for itself and is simply asking the IRS for clarification as to how the $850 million should be reported.

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