WASHINGTON (dpa-AFX) - California's chief utility regulator on Thursday ordered public utility company PG&E Corp. (PCG) to pay fines totalling $1.6 billion for the deadly 2010 gas pipeline explosion and fire in San Bruno, California.
The California Public Utilities Commission or CPUC noted it is the largest penalty ever levied against a utility in the state. The regulator ordered PG&E to pay the fine for the unsafe operation of its gas transmission system, including the pipeline rupture in San Bruno, in 2010.
The September 9, 2010 explosion of PG&E's natural gas pipeline in San Bruno, California, killed eight people, injured 58 others and destroyed a residential neighborhood.
PG&E's Pacific Gas and Electric Co. unit was also the target of a criminal investigation by the U.S. Attorney's Office for the Northern District of California on behalf of the U.S. Department of Justice.
In approving CPUC President Michael Picker's penalty proposal, the commissioners increased the penalty amount by $200 million over what was proposed by Administrative Law Judges.
According to the CPUC, today's decision orders PG&E to pay $850 million in gas transmission pipeline safety infrastructure improvements and $300 million in a fine to California's General Fund.
The CPUC noted that most of the amount for pipeline safety improvements will be spent on capital investments that PG&E will not add to its rate base and thus will not earn any profit on.
Further, PG&E will be required to refund $400 million in a one-time bill credit to its customers and spend about $50 million towards other remedies to enhance pipeline safety.
When added to the disallowances already adopted in a prior CPUC decision, the penalties and remedies exceed $2.2 billion.
The CPUC said that all penalties and remedies assessed against PG&E must be paid by the company's shareholders and will not be recoverable from PG&E's customers.
PCG closed Thursday's regular trading at $52.78, down $0.83 or 1.55 percent on a volume of 5.09 million shares. In after-hours, the stock further declined $0.18 or 0.34 percent to $52.60.
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