Dive Brief:
- California Public Utilities Commission President Michael Picker proposed late last week that Pacific Gas & Electric (PG&E) be fined $1.6 billion for the 2010 San Bruno gas pipeline explosion, $200 million more than the CPUC's previous proposal. The pipeline burst in northern California killed eight and leveled a neighborhood.
- Another key difference in the Picker proposal and the original penalties already approved by administrative law judges is that Picker would require $850 million of the fine to go to improve natural gas pipeline safety. The five-member commission will finalize one of the two penalty formulas in early April.
- Picker's plan points to a breach of the public trust for its increased severity. It would also require $300 million of the fine to go to California’s general fund and $400 million to go to PG&E's gas customers via bill credits.
Dive Insight:
The Utility Reform Network, a consumer advocacy group that has consistently pushed for better rates and other reforms from PG&E, called Picker’s proposal a “step in the right direction” because it raises the cost of the deadly mistake and directs funding to pipeline safety.
PG&E has already paid penalties of $600 million. The final settlement has been delayed because of the resignation and investigation of former CPUC President Michael Peevey, who was found to have unethically close ties to PG&E officials, especially former PG&E executive Brian Cherry.
Accusations against Peevey include potential "ex parte communications, judge-shopping, bribery, obstruction of justice or due administration of laws, [and] favors or preferential treatment" between 2009 and 2014.
In one email revealing the extent of the ties, then PG&E VP Cherry described how he, Peevey and another PG&E executive "polished off two bottles of good Pinot" while Peevey offered advice on PG&E public relations and requested over $1 million from the utility in political donations.
