SAN FRANCISCO -- A federal grand jury on Tuesday issued a new criminal indictment against PG&E in connection with the fatal 2010 gas pipeline explosion in San Bruno, leaving the utility to face dozens of charges, including obstruction of justice.
All told, the U.S. Department of Justice filed 27 charges accusing PG&E of willfully violating the pipeline safety act, and one charge of obstructing an investigation of the explosion by the National Transportation Safety Board, with prosecutors alleging the company lied to federal investigators about the policies it was using to fix its pipeline system. The new indictment replaces one filed April 1 that charged PG&E with 12 felony counts.
The charges, filed in what's known as a superseding indictment, significantly increase the financial penalty the utility faces, with the company now subject to a fine of up to $1.1 billion. Prosecutors are also charging the company with a crime that purportedly took place after the explosion; up to now, all of the charges against the company targeted actions it took before the explosion.
The utility is scheduled for arraignment August 18.
San Francisco-based PG&E said it had not seen the new indictment. "However, based on all the evidence we have seen to date, we do not believe the charges are warranted," the utility said in a prepared release. "Even where mistakes were made, employees were acting in good faith to provide customers with safe and reliable energy."
The San Bruno explosion in September 2010 killed eight people, injured 66 and wrecked 38 homes in a quiet San Bruno neighborhood.
As part of the obstruction of justice charge, federal prosecutors allege that PG&E told NTSB investigators it was operating under one set of policies for addressing hazards related to its natural gas pipelines when, in fact, it was operating under a different set of guidelines.
"The consequence of this practice was that PG&E did not prioritize as high-risk, and properly assess, many of its oldest natural gas pipelines, which ran through urban and residential areas," the U.S. Department of Justice said in a prepared release that outlined the main points of the new indictment.
"We are very disappointed to hear the allegations that PG&E deliberately withheld information in connection with the NTSB investigation," San Bruno City Manager Connie Jackson said in an interview with this newspaper.
The 27 counts related to violations of the pipeline safety act allege that PG&E failed to address record-keeping deficiencies, even while knowing its records were inaccurate or incomplete. The indictment also accuses PG&E of failing to identify threats to its natural gas pipelines and failing to take action once hazards were identified.
"I'm encouraged that the indictments and the investigation is expanding," state Sen. Jerry Hill, whose district includes San Bruno, said in an interview with this newspaper. "But I am still disappointed that those individuals who are responsible are not yet being brought to justice."
The maximum penalty for each count is a $500,000 fine or a fine based on twice the gross gain PG&E made as a result of the violations, or twice the losses suffered by the victims. Federal prosecutors calculate that PG&E benefited by $281 million as a result of its violations of the pipeline safety act, and that victims of the explosion suffered losses of $565 million.
Investigators have found that poor record keeping and shoddy maintenance by PG&E were the primary factors that caused the lethal blast.
Separately, PG&E faces a fine of up to $2 billion from the state Public Utilities Commission for the utility's role in the explosion. The PUC has yet to determine PG&E's punishment for the explosion.
"The new criminal charges demonstrate a pattern of deceit by PG&E," San Bruno Mayor Jim Ruane said in a news release.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.