April 9, 2015
State Budget Assumed $300 Million PG&E Fine for General Fund. As we discussed in prior blog posts, California's 2014-15 state budget plan—passed in June 2014—assumed that the state General Fund would receive $323 million of penalty payments in 2014-15, including a $300 million payment from the Pacific Gas and Electric Company (PG&E) related to the September 2010 explosion of a pipeline in San Bruno. The Governor's January 2015 budget proposal also assumed the $300 million PG&E payment to the General Fund, as well as other penalty assessments by the California Public Utilities Commission (CPUC) and other state entities.
CPUC Now Has Levied $1.6 Billion Penalty, Including $300 Million Fine to General Fund. On April 9, 2015, CPUC announced that it had "imposed the largest penalty it has ever assessed by ordering PG&E shareholders to pay $1.6 billion for the unsafe operation of its gas transmission system, including the pipeline rupture in San Bruno, California, in 2010." The $1.6 billion penalty includes a $300 million fine to the state's General Fund, the same amount as budgeted by the state. The decision notes the commission's "long-standing policy and practice of imposing fines on [investor-owned utilities] as a means of penalizing and deterring, and therefore require[s] PG&E to pay $300 million...in the form of a fine to the state General Fund." The decision states that it imposes a fine payable to the General Fund pursuant to Section 2107 of the California Public Utilities Code and "equitable remedies pursuant to our authority under the California Constitution and Pub. Util. Code Section 701." The CPUC decision grants PG&E's request "that the time to pay any fine be extended to 180 days." The CPUC shall transfer any such General Fund fine to the state treasury "as soon as practical."
PG&E Says It Does Not "Expect to Appeal" Rulings. In a company statement, PG&E's Chairman and CEO states, "While we obviously need to review the orders in their entirety before making a final decision, we do not expect to appeal today's rulings."