Thursday, April 9, 2015

Utility to pay $1.6B after deadly California pipeline rupture

Image result for san bruno explosion

PG&E has been penalized $1.6 billion by the California Public Utilities Commission for the pipeline explosion in San Bruno in 2010. In the explosion, eight people were killed, while approximately fifty were injured. 37 houses were destroyed by the blast. The majority of the penalties collected from PG&E will reportedly go to "gas transmission pipeline safety infrastructure improvements".

This disaster was certainly horrible publicity for PG&E, as it was discovered that the pipelines in the surrounding area were in horrible shape and had been disregarded by PG&E. Funds that were intended to be used on the infrastructure of the pipeline were diverted to other programs.

Do you think this penalty was fair to PG&E? Should it have been stricter or more lenient?


Christian Carlson said...

I think the penalty was fair in terms of intent, but it terms of severity, it definitely should have been much stricter. Given the nature of the incident, 1.6 billion just simply isn't enough to cover the both reparable and irreparable damages of the explosion. However, it is good that the majority of the penalties will go to the improving of pipeline safety. PG&E was fully at fault for this, being absolutely neglectful of their own pipelines, and the cost they pay should be much greater than what has been decided. If PG&E can sort of get away from something like this almost this easily, then couldn't more negligent practice just as easily happen in the future?

Catherine van Blommestein said...

The pipeline was one of the worst disasters that could have happened. The question that should be asked is: would this lack of the pipeline’s maintenance have happened if PG&E was not publicly regulated. These regulations dictate how profitable PG&E is allowed to be. When restraints are placed on a company, spending money on things that are outside these regulations can be overlooked. If PG&E brought notice to the PUC that they would need to raise the rates by billions of dollars to replace the old and outdated infrastructure, would the PUC allow it and would the public be outraged? It is unfortunate that sometimes accidents have to happen to bring up public awareness.

Netta Wang 7 said...

I think Catherine brings up a very good point regarding the nature of PG&E's business and market. However, it should also be noted that the reason for the explosion can't be deemed purely because PG&E was trying to save money under strict regulations. In the 2011 investigation, investigators found many reasons that added up and caused the explosion. For example, the increased pressure in the pipes was because of a growing demand for more energy by the citizens. In addition, regardless of public regulation, PG&E is still unarguably in the wrong for illegally diverting millions of dollars from safety operations to executive compensation and bonuses. Thus, I agree that 1.6 billion dollars isn't enough to make up for the tragedy. Although repairing the homes and pipes around the San Bruno area is right, I think all of PG&E's service areas should be re-evaluated to ensure this doesn't happen again in any town.