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Judge cuts nearly all of $562-million penalty against PG&E in 2010 Bay Area pipeline blast

A massive fire roars through a mostly residential neighborhood in San Bruno, Calif., in a 2010 gas pipeline explosion that killed eight people.
(Paul Sakuma / Associated Press)
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A federal judge has cut nearly all of a potential $562-million fine against Pacific Gas & Electric Co. in a criminal case alleging pipeline safety violations before a deadly explosion in the San Francisco Bay Area.

U.S. District Court Judge Thelton Henderson issued the order late Tuesday, hours after the U.S. attorney’s office requested it in a court filing. The judge did not explain his reasoning.

PG&E now faces a maximum fine of $6 million if convicted of 11 pipeline safety violations and obstructing investigators in the wake of the 2010 blast in San Bruno, Calif.

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The government did not provide an explanation in the filing for its request to lower the potential penalty.

The move came after more than a month of testimony and four days into jury deliberations over whether PG&E is guilty of the charges filed.

The blast of a Pacific Gas & Electric Co. natural gas pipeline six years ago sent a giant plume of fire into the air, killing eight people and destroying 38 homes in San Bruno.

During the investigation, the San Francisco-based utility misled federal officials about the standard it was using to identify high-risk pipelines, prosecutors have said.

The standard PG&E used violated safety regulations and led to a failure to classify the San Bruno pipeline and others as high-risk and properly assess them, prosecutors said in a 2014 indictment.

PG&E also was charged with violating pipeline safety laws by ignoring shoddy record-keeping and failing to identify threats to its larger natural gas pipelines. The company did not subject the pipelines to appropriate testing, choosing a cheaper method to save money, prosecutors told jurors.

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PG&E pleaded not guilty and said its employees did the best they could with ambiguous regulations they struggled to understand. Engineers did not think the pipelines posed a safety risk, and the company did not 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.

Investigators have blamed the blast in part on poor PG&E record-keeping that was based on incomplete and inaccurate pipeline information.

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UPDATES:

5:45 p.m.: This article was updated with the decision of the judge to cut the potential fine.

This article was originally published at 3:45 p.m.

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