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Prosecutor: Pacific Gas ignored regulations to cut costs

Prosecutor: Pacific Gas ignored regulations to cut costs
A massive fire following the explosion of a Pacific Gas & Electric pipeline in San Bruno, Calif., left eight people dead in 2010. (Jeff Chiu / Associated Press)

Pacific Gas & Electric Co. ignored pipeline safety regulations to cut costs and tried to cover up its illegal practices by misleading federal officials investigating a deadly explosion of one of its natural gas pipelines in the San Francisco Bay Area, a federal prosecutor said Friday as a criminal trial against the utility giant got underway.

PG&E knew exactly what to do to comply with regulations but didn't do it, Assistant U.S. Atty. Hallie Hoffman said in her opening statement in San Francisco.

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"Instead, it chose a cheaper method that did not ensure the safety of pipelines running through high-consequence areas," Hoffman said.

PG&E attorney Steven Bauer said the company's employees did what they could in the face of ambiguous regulations they struggled to understand.

A PG&E natural gas pipeline exploded in the city of San Bruno six years ago. The blast killed eight people and destroyed 38 homes. During the investigation that followed, prosecutors say the San Francisco-based utility misled federal officials about how it was identifying high-risk pipelines.

The standard the company used violated safety regulations and led to a failure to classify the San Bruno pipeline and other similar pipelines as high risk, prosecutors said in a 2014 indictment.

PG&E has pleaded not guilty to one count of obstruction and multiple charges that it violated pipeline safety regulations by, for example, ignoring errors in its records about pipelines. It faces a $562-million fine if convicted.

California regulators fined the company $1.6 billion for the blast last year.

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