PG&E charged with obstruction of justice in 2010 explosion investigation

Prosecutors say the company attempted to mislead National Transportation Safety Board investigators

Pacific Gas & Electric (PG&E) was already going to pay heavily for a 2010 pipeline explosion that killed eight and destroyed parts of the Northern California neighborhood of San Bruno. But according to government regulators, the company now faces a different sort of charge — lying to investigators.

The U.S. attorney in San Francisco announced on July 29 that PG&E is charged obstruction of justice and 27 related counts following an investigation into the explosion. The new charges replace an older indictment that contained 12 counts related to the company’s safety practices.

The charges allege that PG&E officials attempted to mislead National Transportation Safety Board investigators about pipeline testing and maintenance procedures. According to prosecutors, the company’s testing and maintenance policies did not reach federal standards during and for six months after the explosion.

Investigators later found that PG&E had inaccurate records for more than 6,000 miles of gas transmission lines and had not tested for the defective seam weld that later caused the explosion.

“The consequence of this practice was that PG&E did not prioritize as high-risk, and properly assess, many of its oldest natural gas pipelines, which ran through urban and residential areas,” the U.S. attorney’s office said in a statement.

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The Natural Gas Pipeline Safety Act of 1968 (PSA) indicates that the maximum penalty for violations is double the gross gain made as a result of the violations. The indictment alleges that PG&E made gross gains of $281 million, and victims of the explosion suffered losses of approximately $565 million. The company is also facing around $2.5 billion in civil penalties related to the explosion.

According to the Associated Press, PG&E expected these increased charges. In June, company spokesman Greg Snapper said the company was awaiting word of the charges, but added, “However, based on all of the evidence we have seen to date, we do not believe that the charges are warranted and that, even where mistakes were made, employees were acting in good faith to provide customers with safe and reliable energy.”

Sun Bruno officials say the charges are a good start, with San Bruno Mayor Jim Ruane saying, “The new criminal charges demonstrate a pattern of deceit by PG&E.” However, the company also called for the resignation of the head of the California Public Utilities Commission, saying the regulator prosecuting PG&E in a civil case has improper ties with the company.

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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