SAN FRANCISCO -- PG&E shares plunged on Thursday, amid a slump in profits that were weakened by expenses related to improvements to its natural gas system, under scrutiny following a fatal explosion in San Bruno nearly four years ago.

The decline in second-quarter profits came the same week that investors also had to ponder the potential consequences that the utility faces in the wake of a new federal indictment on criminal charges, including obstruction of justice accusations, that were filed in connection with the San Bruno explosion.

The holding company for the utility said its profits fell 18.6 percent, and totaled $267 million, during the second quarter that ended in June.

One-time expenses totaling $97 million undermined the profits, PG&E said. These items were expenses related to its natural gas system, including the costs of safety improvements, as well as legal expenditures.

"We continue to make good progress on our goal of providing our customers with energy that is safe, reliable and affordable," PG&E Chief Executive Officer Anthony Earley said in a prepared release.

The company's shares fell nearly 2 percent in mid-day trading in the wake of the earnings report.

San Francisco-based PG&E was hit this week with a newly revised indictment on felony charges issued by a federal grand jury. The 28 felony counts include a new obstruction of justice charge that claims PG&E illegally interfered with a National Transportation Safety Board probe into the San Bruno explosion. The other 27 counts allege PG&E violated pipeline safety regulations.


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PG&E says the charges are without merit. The criminal case exposes PG&E to the potential of a fine that could reach $1.13 billion. Separately, PG&E faces a fine of up to $2 billion or even more from the state Public Utilities Commission as punishment for its role in the explosion.

"This is very unusual for a company in this industry sector to be charged with obstruction of justice, said Paul Patterson, an analyst with New York City-based Glenrock Capital.

Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.