Dive Brief:

• Pacific Gas & Electric last week was found guilty of six criminal counts in a case related to the fatal 2010 San Bruno pipeline explosion, including one count of obstructing an agency proceeding.
• The explosion killed eight and destroyed almost 50 homes, but the maximum penalty the company will face is about $3 million.
• Last year, the California Public Utilities Commission fined the utility $1.6 billion in three investigations related to the explosion. It was the largest penalty ever levied against a public utility in United States history.

Dive Insight:

Advocates say the $3 million maximum penalty is far short of fair and some observers called it a mere "slap on the wrist" for the devastating accident. SNL Energy explains that until recently the prosecution had sought more than $560 million, but a judge's decision that fines would not be based on financial gains related to the charges dropped the maximum precipitously.

A federal jury found PG&E guilty of five counts of pipeline management violations under the U.S. Pipeline Safety Act and one count of obstructing an agency proceeding. On six record keeping charges, the jury found PG&E not guilty, despite a court filing from the U.S. Attorney’s Office in San Francisco reporting alleged evidence that PG&E attempted to dispose of key safety records relating to the San Bruno gas pipeline explosion 

 A spokesperson for The Utility Reform Network told SNL the group is "concerned that the drastic reductions in penalties don't send PG&E the right message." And a legal expert questioned whether the prosecution likely spent more than $3 million to try the case.

"I would probably put this in the category of an unsuccessful government prosecution," Bracewell LLP attorney Kevin Collins told SNL. "In the end, was it worth it? How much money did the government spend to investigate, prepare for and try this case?"

While Collins called it a "slap on the wrist," it is not the only financial penalties related to the case, of course. The $1.6 billion penalty the utility declined to contest last year slashed the company's earnings. Following verdicts in the United States District Court in San Francisco, PG&E said it continues to make progress on its gas system.

"While we are very much focused on the future, we will never forget the lessons of the past. We have made unprecedented progress in the nearly six years since the tragic San Bruno accident and we are committed to maintaining our focus on safety," according to the statement. "We want our customers and their families to know that we are committed to re-earning their trust."

The City of San Bruno issued a statement saying the guilty verdicts "finally hold PG&E fully accountable for their deliberate negligence and their wanton disregard for customer safety. These verdicts make it clear that now is the time for PG&E to accept responsibility for the urgent need for improvement in their corporate business practice and to make safety a highest priority in all of their operations."