Written by The Business Journal Staff
(AP) — A federal judge on Thursday sentenced California’s largest utility to pay a $3 million fine and run television commercials publicizing its pipeline safety convictions as punishment in a criminal case stemming from a deadly natural-gas explosion in the San Francisco Bay Area.
U.S. District Judge Thelton Henderson also ordered Pacific Gas & Electric Co. employees to perform 10,000 hours of community service and ordered an independent monitor to oversee the safety of its gas pipeline system.
“I find the crimes at issue to be very serious and to pose a great risk to public safety, and that’s why I am going to impose the maximum possible fine and maximum possible probation terms allowable under the law,” Henderson said.
The sentence closes one of the final chapters in the legal and regulatory fallout from the 2010 blast in the city of San Bruno that killed eight people and destroyed 38 homes.
California regulators previously fined PG&E $1.6 billion for the explosion, and the company has spent hundreds of millions of dollars settling victims’ lawsuits.
“The judge served justice today,” San Bruno Mayor Jim Ruane said after the sentencing. “It’s satisfying in some ways, but for us it will never be over.”
PG&E said it was committed to transforming the company into the “safest and most reliable energy provider in America” and earning back the trust of the communities it serves.
“We sincerely apologize to the families and friends of those who lost their lives or were injured in this tragic explosion, and we want them to know our mission and our commitment to safety will never stop,” the company said in a statement.
The advertising component of the sentence requires PG&E to air TV commercials over three months at a maximum cost of $3 million. The commercials should publicize the utility’s convictions, the punishment imposed and steps taken to prevent the recurrence of similar crimes, the judge said.
PG&E estimates the ad campaign will result in about 12,500 roughly 60-second commercials.
Jurors in August convicted the company of five of 11 counts of violating pipeline safety laws, including failing to gather information to evaluate potential gas-line threats and deliberately not classifying a gas line as high risk. No employees were charged, so no one was facing prison time.
Prosecutors said the company intentionally misclassified pipelines so it would not have to subject them to appropriate testing, choosing a cheaper method to save money.
Jurors also convicted the utility of obstructing investigators looking into the blast.
PG&E attorneys said during trial that the company’s engineers did not think the pipelines posed a safety risk, and the company did not intend to mislead investigators.
The stakes in the case dropped dramatically, however, when prosecutors made the surprising decision several days into jury deliberations not to pursue a potential $562 million fine if PG&E was convicted of any of the pipeline safety counts.
The judge said he wants PG&E to perform as much of the community service requirement as possible in San Bruno. High-level personnel must carry out at least 2,000 of the 10,000 hours, Henderson said.