PG&E to pay $70M for deadly Calif. pipeline blast

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By TERENCE CHEA, Associated Press

SAN FRANCISCO (AP) — Pacific Gas & Electric Co. has agreed to pay $70 million in restitution for the 2010 pipeline explosion that killed eight people in the San Francisco suburb of San Bruno, company and city officials said Monday.

In a joint statement, PG&E and San Bruno said the money will be used to establish a nonprofit organization to help the community recover from the Sept. 9, 2010, blast, which also injured dozens of people and destroyed at least 38 homes.

The funds will help San Bruno "get beyond the tragedy and devastation caused by PG&E's explosion and fire," said Mayor Jim Ruane. "As a community and as a city, we remain fully dedicated to assuring our community's full recovery."

The San Francisco-based utility previously set up a $100 million fund to support emergency needs in the aftermath of the explosion in a quiet neighborhood overlooking San Francisco Bay.

PG&E President Chris Johns said: "We committed the night of the tragedy and continue to commit that we will help the victims and the community heal and rebuild. Today's announcement is another step in that process."

Federal investigators blame PG&E for the explosion, saying a litany of failures led to the blast, which they concluded was the result of an "organizational accident," not a simple mechanical failure.

Escaping gas fed a pillar of flame 300 feet tall for more than 90 minutes before workers were able to manually close valves that cut off gas to the ruptured pipeline. Investigators said the damage would have been less severe had automatic valves been in place.

The California Public Utilities Commission voted unanimously in January to open a top-level legal investigation into whether PG&E broke any laws, a process that ultimately could end in hefty fines for the company. Agency staff issued a scathing report saying the natural gas line blew up in part due to what they called the systematic failures of PG&E's corporate culture, which emphasized profits over safety.

Staff also cited the utility's woeful record-keeping, haphazard emergency response and failure to follow both federal pipeline safety laws and accepted industry practices.

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