SAN FRANCISCO Pacific Gas & Electric Co (PCG_pa.A) was found guilty on Tuesday of several federal charges stemming from a natural gas pipeline explosion in California that killed eight people and injured 58 others in 2010, a U.S. Justice Department spokesman said. The utility was also found guilty of one count of misleading federal investigators about the standard it used to identify high-risk pipelines. PG&E was indited on criminal charges in 2014, four years after Line 132 exploded in a residential neighborhood of San Bruno on September 9, 2010, killing eight people, injuring 58 and destroying 38 homes.
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Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combined natural gas and electric utilities in the United States.
The U.S. Attorney’s Office accused PG&E of knowingly relying on “inaccurate or incomplete” infrastructure management records and failing to investigate its high-pressure natural gas pipelines after potential hazards had been identified, according to court records.
Government prosecutors argued during the trial that PG&E maintained shoddy records and failed to monitor aging pipelines.
That decision was made during the jury’s fourth day of deliberations, and the prosecution chose to let go of a demand to charge the utility twice the amount it would have cost to comply with safety standards, which was estimated at $281 million. Prosecutors said PG&E put profits ahead of safety, then attempted to cover up mistakes. Tuesday’s verdicts will cost PG&E a maximum of $3 million in penalties, which will be paid by shareholders. If, for example, the company had been found guilty on all charges, it would have been liable for an additional $562 million – until the prosecution unexpectedly backed down last week, possibly in order to ensure some conviction, requesting that the court dismiss much of the entire potential punishment.
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