Updated 7:21 p.m. Tuesday, Aug. 8:
A federal jury found PG&E guilty Tuesday on six of 12 criminal charges, including obstruction of justice, for its role in the deadly pipeline blast almost six years ago that killed eight people, injured dozens more and destroyed 38 homes in San Bruno. The company now faces a maximum fine of $3 million, a tiny fraction of the $562 million federal prosecutors originally sought.
A federal investigation resoundingly blamed PG&E for the blast, citing “baffling” mistakes, sloppy oversight and a “litany of failures.” In 2011, the National Transportation Safety Board found more than 100 violations by the company, some of them decades old.
San Bruno Mayor Jim Ruane, reacting to the verdict, said: “It’s obviously positive. The jury came to the same conclusion we did for years. That this is not a tragic accident. It’s something that could have been prevented. PG&E put profits ahead of safety.”
PG&E faced 12 criminal counts: 11 charges of violating pipeline safety regulations and one charge of obstructing the National Transportation Safety Board’s investigation. PG&E could have received a fine of $562 million before prosecutors, in a surprise move on Aug. 2, said they would request only $6 million in penalties. The utility pleaded not guilty on all charges. No company executives were specifically named.
“The part that’s most troubling with this is the individuals who were responsible for those short cuts that they took, the diversion of all of those funds, the $500 million that was diverted from safety, those people that made that conscious decision, nothing’s going to happen to them,” state Sen. Jerry Hill said Tuesday, after the verdict. “And there’s nothing to really deter or detract from this occurring in the future.”
PG&E said in a statement that it is working hard to regain its customers’ trust.
“While we are very much focused on the future, we will never forget the lessons of the past,” the statement says. “We have made unprecedented progress in the nearly six years since the tragic San Bruno accident and we are committed to maintaining our focus on safety. We want our customers and their families to know that we are committed to re-earning their trust by acting with integrity and working around the clock to provide them with energy that is safe, reliable, affordable and clean.”
The utility’s lawyers said Tuesday in a short written statement that they would “file our motion for acquittal” next week. The motion will seek to have federal judge Thelton Henderson overturn the jury’s verdict, according to legal experts. It’s a fairly common, and rarely successful, legal maneuver.
To Hill, it shows the utility isn’t accepting responsibility for the San Bruno explosion.
“The first thing you do when you want to re-earn your customers trust: You admit that you have a problem. You admit that something went wrong,” he said. “So they’re still not getting it. They’re still not admitting that there was a problem, that they acted criminally.”
The pipeline segment that failed in San Bruno was poorly built when it was pieced together in 1956, with a poorly welded joint containing a visible crack that PG&E’s quality control failed to detect, according to the NTSB investigation. But it’s hard to see when a pipeline buried underground is deteriorating and becoming prone to failure. One way to know is through hydrostatic testing — a process in which pipeline sections are filled with water at high pressure to detect cracks and other flaws. But when federal regulations went into effect, thousands of miles of transmission pipeline — including Line 132 under San Bruno — were grandfathered into operation without testing.
The utility also didn’t know about the weld. Emails released during civil suits show a PG&E executive telling state regulators two days after the blast that “God knows what is underground.” In the months following the blast, PG&E began tracking down pipeline records from decades past. PG&E staff collected documents from more than 46 offices. It took about 1,500 employees five days to sort through 100,000 boxes at the Cow Palace in Daly City. State regulators say that much more is known about PG&E’s system today, but that the utility is still pinning down all its data.
The bad weld was only exacerbated when the utility increased the gas pressure on that pipeline to its maximum allowable limit. PG&E officials later told federal investigators that they thought periodically “spiking” the pressure was necessary to show that the lines were sound. But the utility offered a series of contradictory explanations for the increase in pressure. Prosecutors argue that the utility purposefully provided the NTSB with different versions of the company’s policy on spiking pressure on pipelines, obstructing justice. The defense argued that personnel were acting in “good faith.”
The trial largely centered around PG&E’s pipeline maintenance, record keeping and operations. Federal prosecutors argued that PG&E officials and engineers knew that they were violating federal safety rules when they deliberately increased the pressure on older, more fragile pipelines, including the one that exploded in San Bruno. The company also did not undertake expensive water pressure tests to determine the safety of older pipes. PG&E is still in the process of testing such pipelines.
The defense contended that PG&E employees and executives didn’t intend to break safety laws. They argued that PG&E engineers face a confusing morass of federal rules about what tests to apply to which pipelines. Defense attorney Steven Bauer hammered home that the prosecution failed to show a pattern of criminal negligence.
U.S. District Court Judge Thelton Henderson imposed strict limits on questions and evidence about the blast itself. At the beginning of the trial jurors heard about numerous leaks and pressure spiking, but were not told that those problems were on the same gas pipeline that exploded in San Bruno. In mid-July, though, the judge allowed witnesses, in response to questions, to discuss the actual blast.
Testimony concluded July 27.
Separately, the company is also facing a new federal grand jury investigation into an obstruction of justice charge, according to documents filed by PG&E attorneys in March.
It’s rare, but not unprecedented, for a utility company to face criminal charges for violating safety laws. In 1999, a ruptured pipeline killed three people and spilled more than 225,000 gallons of gasoline into creeks running through a public park in Bellingham, Washington. Federal prosecutors investigated Olympic Pipe Line Co., resulting in prison or probation for three company officials and $112 million in penalties and safety improvements.
In 2015, the California Public Utilities Commission fined PG&E $1.6 billion for its role in the deadly blast. That money went into safety improvements, to reimburse ratepayers for money not spent on safety improvements and as a penalty paid into California’s general fund. However, the utility saved millions on the penalty in tax breaks.
The utility has already settled claims amounting to nearly $500 million with San Bruno victims and families.
Rebecca Bowe and Beth Willon contributed to this report.
This report was updated to include statements from Sen. Jerry Hill and information about the defense’s plan to ask the trial judge to overturn the jury’s verdict.