Pacific Gas & Electric Convicted of Misleading Investigators
August 09 2016 - 10:40PM
Dow Jones News
SAN FRANCISCO—A federal jury found California's largest utility
guilty on Tuesday of violating pipeline safety regulations before a
deadly natural gas pipeline explosion in the San Francisco Bay Area
and then misleading investigators about how it was identifying
high-risk pipelines.
After deliberating for seven days, jurors convicted Pacific Gas
& Electric Co. of obstruction and five of 11 counts of
pipeline-safety violations, including failing to gather information
to evaluate potential gas line threats and deliberately not
classifying a gas line as high risk.
The PG&E natural gas pipeline blast six years ago sent a
giant plume of fire into the air, killing eight people and
destroying 38 homes in the city of San Bruno.
No PG&E employees were charged, so no one is facing prison
time. A judge could fine PG&E as much as $3 million for the
convictions when the company is sentenced.
"While we are very much focused on the future, we will never
forget the lessons of the past," PG&E said in a statement. "We
want our customers and their families to know that we are committed
to re-earning their trust by acting with integrity and working
around the clock to provide them with energy that is safe,
reliable, affordable and clean."
During the investigation, prosecutors say, the San Francisco
utility misled federal officials about the standard it was using to
identify high-risk pipelines.
PG&E pleaded not guilty and said its employees did the best
they could with ambiguous regulations they struggled to
understand.
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 found guilty of any of the pipeline safety counts.
The decision, which was approved by a judge, reduced the
company's maximum liability to $6 million, prompting criticism that
prosecutors weren't holding PG&E accountable.
According to prosecutors, the standard PG&E used to identify
high-risk pipelines violated safety regulations and led to a
failure to classify the San Bruno pipeline and others as high risk
and properly assess them.
The company deliberately misclassified pipelines so it wouldn't
have to subject them to appropriate testing, choosing a less
expensive method to save money, prosecutors said.
"The motive was profits over safety," Assistant U.S. Attorney
Jeffrey Schenk said during his closing argument.
PG&E engineers didn't think the pipelines posed a safety
risk, and the company didn't intend to mislead investigators,
PG&E attorney Steven Bauer said during the trial.
The utility inadvertently sent officials a draft policy about
its standard for identifying high-risk pipes, not one the company
was actually following, he said.
"Nobody at PG&E is a criminal," he said during his closing
argument. He accused prosecutors of engaging in an "elaborate
second-guessing exercise."
Investigators have blamed the blast in part on poor PG&E
record-keeping that was based on incomplete and inaccurate pipeline
information.
California regulators fined the company $1.6 billion last year
for the blast.
Copyright 2016 Associated Press
(END) Dow Jones Newswires
August 09, 2016 22:25 ET (02:25 GMT)
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