Californians puzzled after judge cuts potential fine of $562M for utility over ’10 explosion

SAN FRANCISCO, Aug. 3 (UPI) — A judge’s slashing of the potential $560 million penalty against California’s largest utility company for a pipeline explosion six years ago has many people scratching their heads.

Pacific Gas Electric operated a pipeline that exploded in the Bay Area town of San Bruno in 2010. The massive blast killed eight people and destroyed nearly 40 homes, and led to multiple criminal charges against the utility.

PGE had been facing a fine of up to $562 million, originally requested by prosecutors, for the explosion. But U.S. District Court Judge Thelton Henderson decided late Tuesday that the most the utility can be penalized for the incident is $6 million — a reduction of about a 99 percent.

Perhaps even more surprising is the fact that the massive penalty reduction was requested by the U.S. Attorney’s Office — the prosecutors who first set the bar at $562 million.

Jurors are in the process of determining PGE’s liability for the blast.

In issuing the ruling late Tuesday, Henderson did not include an explanation for the prosecutors’ request.

Video: CBS News

The judge’s ruling is a major victory for the company, and a brain-teaser for almost everyone else — including the northern California news media.

Wednesday, the San Jose Mercury News Editorial Board said the prosecutors owe the public an explanation for their abrupt decision to cut out most of the potential penalty.

“The U.S. attorney’s office is declining to comment on why it decided to drop 99 percent of the possible fines … [which would take the potential penalty down to $6 million,” the board wrote. “For a company the size of PGE — which recorded an $888 million profit last year — that’s petty cash.”

“PGE had taken money from ratepayers for gas pipeline maintenance and instead used it for shareholder dividends and executive bonuses. These are facts,” it continued.

PGE faces a dozen felony charges over the explosion and even charges that it obstructed the subsequent investigation.

“Prosecutors argued that PGE committed felony violations of the law in one of the worst utility disasters in American history. Backing off on the penalty is confusing to survivors, the public and to utilities watching for signals of accountability,” the editorial board added.

“The U.S. attorney’s office should restore the full penalty request. If it doesn’t, at least tell us why.”

No PGE officials are facing jail time for the explosion.

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