Pacific Gas and Electric Co., a northern California utility, has agreed to pay $70 million to the California town of San Bruno for a pipeline explosion that killed eight people in 2010.
Company says it’s remorseful
The San Francisco-based power company’s president, Chris Johns, released a statement Monday, saying PG&E is sorry and eager to make amends:
“The community of San Bruno has suffered through a terrible tragedy, and we understand that this accident will affect this community forever. We committed the night of the tragedy and continue to commit that we will help the victims and the community heal and rebuild. Today’s announcement is another step in that process.”
The company previously paid out $100 million to meet the immediate emergency needs of the community following the incident in 2010.
Investigators blame PG&E
A federal investigation determined that PG&E was responsible for the disaster. A series of errors led regulators to rule it an “organizational accident,” not just the result of mechanical breakdowns.
Non-profit foundation to be established
The settlement agreed upon Monday will be used to set up a foundation dedicated to the community’s recovery. The company must pay the restitution within 70 days. The non-profit organization that it establishes will decide how the money can best be spent to serve the community’s recovery as a whole.
The statement went on to say:
“This $70 million payment is in addition to PG&E’s commitment to fund replacement and repair of the city’s infrastructure and other costs related to the accident and restoration of the neighborhood. The utility will not seek to recover the contribution through insurance or customer rates.”
The pipeline explosion
A decades-old gas pipeline burst on Sept. 9, 2010, leaving a massive crater in a San Bruno street. The gas escaping from the burst pipeline fed 300 foot flames that burned for an hour and a half before frantic workers were able to turn off the gas flow manually. Had automatic valves been in place, investigators concluded, the damage would have been greatly minimized. In addition to the eight fatalities, the blast caused dozens of injuries and demolished 38 homes.
The town’s mayor, Jim Ruane, said the money will be used to heal and “get beyond” the tragedy. He said:
“As a community and as a city, we remain fully dedicated to assuring our community’s full recovery.”
Criminal charges could follow
Meanwhile, the California Public Utilities Commission is conducting its own investigation to determine if criminal charges should be leveled against PG&E. That could lead to yet more stiff fines and penalties. The commission has already concluded that PG&E followed policies that valued profit over safety.
Civil lawsuits also coming
PG&E is also facing approximately 90 civil lawsuits filed by people injured in the blast. Monday’s settlement agreement does not affect those proceedings, which are scheduled to begin on July 23, 2012.
Officials at the utility say they intend to compensate every victim and hope to reach an agreement outside of the courts.
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