September 9, 2010
A break in Pacific Gas and Electric’s natural gas line number 132 caused an explosion at 6:11 pm on September 9, 2010. The 30-inch natural gas pipeline owned by Pacific Gas and Electric (PG&E) exploded into flames in the Crestmoor residential neighborhood and witnesses reported the initial blast formed a wall of fire more than 1,000 feet high. The 28-foot remnant of pipe that blew out landed 100 feet away, creating a crater 167 feet long and 26 feet wide. The United States Geological Survey registered the shockwave from the explosion as a magnitude 1.1.
This disaster caused
38 homes destroyed, 53 homes damaged
Investigations revealed PG&E had replaced pipeline on gas line number 132 along parts near the San Andreas fault but stopped short of the segment which ultimately failed in 2010.
Additionally, it was revealed that the pipeline was improperly installed. Following the failure, PG&E was required to re-evaluate how it determines the maximum operating pressure for nearly 1,800 miles of pipeline throughout its system. PG&E was unable to provide documentation for details of some of its gas transmission pipelines.
Private party litigation. There were so many lawsuits that they were collectively designated as Judicial Council Coordinated Proceeding Number 4648, PG&E San Bruno Fire Cases. Ultimately, PG&E paid $565,000,000 in settlements for 499 victims. PG&E received $515 million from insurance.
The state of California. October 2012 public hearings by the California Public Utilities Commission were suspended while state regulators and PG&E struck a deal. In 2014, the San Francisco Chronicle reported that the chief of staff for the CPUC communicated with PG&E officials to help move litigation to judges that sympathize with PG&E. The so-called “judge shopping scandal,” is under federal investigation. On April 9, 2015, the Public Utilities Commission fined PG&E $1,600,000,000. In 2018, the CPUC fined PG&E an additional $92,500,000 for improper communication with CPUC commissioners and staff.
Federal. On April 1, 2014, PG&E was indicted by a federal grand jury for multiple violations of the Natural Gas Pipeline Safety Act of 1968. Additional charges were issued by the jury for obstruction of justice by lying to the National Transporation Safety Board regarding its pipeline testing policy. On January 21, 2017 PG&E was fined $3 million and ordered to perform 10,000 hours of community service. Additional directives include instituting a compliance and ethics monitoring program while spending up to $3 million to “publicize its criminal conduct.”
Shareholders. PG&E settles a classaction shareholder suit alleging gross mismanagement by agreeing to have its insurance company pay PG&E $90 million, while budgeting $32 million for safety and governance improvements.
Cost transferred to ratepayers. In August of 2011, following the disaster, PG&E unveiled a plan to modernize and enhance safety of its gas transmission operations over several years. This project cost $769 million and was funded by a three-year gas rate increase from 2012 – 2015. In December of 2012, the California Public Utilities Commission decided that 55% of the long term costs for PG&E pipeline inspection and safety upgrades of $229,000,000 will be carried by electricity ratepayers.