PG&E Pleads Not Guilty to All San Bruno Charges

(AP and KQED) — As survivors of the 2010 San Bruno pipeline explosion looked on, PG&E pleaded not guilty Monday to a dozen felony charges stemming from alleged safety violations related to the disaster that killed 38 people and leveled the city's Crestmoor neighborhood.

In federal court in San Francisco, Judge Joseph Spero granted prosecutors' request to increase the maximum fine that PG&E could face to more than $6 million if the court decides the company somehow benefited financially or saved money as a result of criminal misconduct.

San Bruno city officials hailed the ruling as a positive step and said they believed company officials should be charged as well. No individual PG&E officials or employees have been charged criminally, but prosecutors could file superseding indictments naming individuals if the investigation warrants.

"We look forward to PG&E being fined the maximum amount allowed by law to send a message not only to that corporation but to the industry," San Bruno City Manager Connie Jackson said. "Individuals within the corporation certainly had responsibility for making decisions ... that led to the disaster in San Bruno."

Prosecutors allege that PG&E knowingly relied on erroneous and incomplete information when assessing the safety of the pipeline that eventually ruptured and sparked a fireball that destroyed 38 homes, killed eight people and injured dozens of others. Nearly four years later, the neighborhood is still recovering.

PG&E said in a statement it does not believe any employee intentionally violated federal regulations. The company also released an 18-page Overview of Issues Associated with San Bruno Explosion outlining steps it has already taken to compensate victims and correct pipeline safety issues. "San Bruno was a tragic accident that caused a great deal of pain for many people," the document begins. "We’re accountable for that and make no excuses. Most of all, we are deeply sorry."

In 2011, a National Transportation Safety Board investigation of the explosion found that the probable cause of the San Bruno catastrophe was:

(1) (I)nadequate quality assurance and quality control in 1956 during its Line 132 relocation project, which allowed the installation of a substandard and poorly welded pipe section with a visible seam weld flaw that, over time grew to a critical size, causing the pipeline to rupture during a pressure increase stemming from poorly planned electrical work at the Milpitas Terminal; and

(2) (I)nadequate pipeline integrity management program, which failed to detect and repair or remove the defective pipe section.

The NTSB also put partial blame on exemptions for proper testing issued by the California Public Utilities Commission "which likely would have detected the installation defects. Also contributing to the accident was the CPUC’s failure to detect the inadequacies of PG&E’s pipeline integrity management program."

NTSB Chairman Deborah Hersman said in her opening statement at the hearing that PG&E "exploited weaknesses in a lax system of oversight." She also said  government agencies had "placed a blind trust in operators to the detriment of public safety."

"It was not a question of if this pipeline would burst," Hersman said. "It was a question of when."

Read more about the NTSB's findings here.

Subsequent to the explosion, the San Francisco Chronicle drilled down into the details of PG&E's alleged negligence in adequately inspecting and maintaining its pipeline network. This video features the paper's reporter, Jaxon Van Derbeken, explaining the history of the faulty San Bruno pipeline, which includes PG&E artificially spiking pressure on the San Bruno line in order to game the system of inspections in place.

"They interpreted the law in such a way that they felt if they didn't artificially raise the pressure every five years, that they risked having to run the line at a lower pressure....So they ... spiked the pressure," Van Derbeken said. "They felt it was a kind of use it or lose it scenario. If they didn't run the pressure at full tilt, they would lose the right to run it. And if they did run it at full pressure, they would have to do these inspections for welds that they didn't want to do. So ironically, they were taxing the welds during these spikes, and then not inspecting for whatever problems they might have caused when they taxed the welds during the spikes. They believed it was perfectly safe."

It is rare but not unprecedented for a pipeline company to face charges tied to criminal safety laws.

Federal prosecutors previously investigated Olympic Pipe Line Co. in Washington state after an explosion in 1999 killed three people. That blast was caused by a ruptured line that spilled more than 225,000 gallons of gasoline into creeks running through a public park in Bellingham, Wash.

That federal investigation ultimately resulted in prison or probation terms for three company officials and a settlement requiring $112 million in penalties and safety improvements.

While no individual PG&E officials or employees have been charged criminally, prosecutors could file so-called superseding indictments naming individuals if the investigation warrants.

April 1 audio: PG&E indicted on criminal charges