PG&E penalty hits $110 million

A state regulatory official decided Friday to raise Pacific Gas and Electric Co.’s penalty for maintaining false internal safety records about its underground infrastructure by nearly 70% in part because the utility’s senior executives failed to fix the problem for years.

The decision from Peter Allen, an administrative law judge at the California Public Utilities Commission, would impose a $110 million punishment against PG&E if it is not successfully challenged. PG&E shareholders would have to fund $66 million in system improvements, including additional staff, while the remaining $44 million would be paid to the state’s general fund.

PG&E, a group representing utility employees and safety staff at the commission, had previously agreed to settle the inquiry into the company’s recordkeeping practices for $65 million. But Allen wrote that the amount was “oddly low under the circumstances.”

The records at issue involve PG&E’s efforts to locate and mark its underground gas and electric lines before excavators begin digging. State law gives PG&E two working days to respond to excavators’ requests. But staff at the commission found that company employees repeatedly filed incorrect records about how they responded.

Late responses raise the risk that excavators will strike an underground line, Allen noted. The company’s tardy response was a “contributing factor” to 67 incidents, he wrote, citing the prior settlement agreement filed with the commission.

Allen found that senior PG&E executives were “apparently unaware” of the records issue for years and “took no action to remedy it” for more than four years starting in late 2012.

“While PG&E downplays the severity of the violations, PG&E management’s inability to even realize the existence of a problem that its own employees were aware of is deeply troubling,” Allen said in his decision.

PG&E said in a statement that it was “reviewing the (judge’s) decision in this matter and will be responding within the timeline outlined in the decision.”

Mark Toney, executive director of The Utility Reform Network consumer group, called the decision “a victory for corporate accountability.” Toney’s organization pushed for a harsher punishment after commission officials released the $65 million proposed settlement.

Toney would have preferred part of the settlement go toward a rate credit for PG&E customers, but he said the decision was, overall, “a very good sign.”

“It’s the (commission) doing the right thing: holding PG&E accountable,” Toney said.

Allen’s decision can be appealed by PG&E or another party. Any one of the five utility commissioners who oversee the agency an also request a review.

Ultimately, PG&E’s bankruptcy judge will have to approve the document that settles the case, according to Allen.