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Judge cuts nearly all of $562-million penalty against PG&E in 2010 Bay Area pipeline blast

Judge cuts nearly all of $562-million penalty against PG&E in 2010 Bay Area pipeline blast
A massive fire roars through a mostly residential neighborhood in San Bruno, Calif., in a 2010 gas pipeline explosion that killed eight people. (Paul Sakuma / Associated Press)

A federal judge has cut nearly all of a potential $562-million fine against Pacific Gas & Electric Co. in a criminal case alleging pipeline safety violations before a deadly explosion in the San Francisco Bay Area.

U.S. District Court Judge Thelton Henderson issued the order late Tuesday, hours after the U.S. attorney's office requested it in a court filing. The judge did not explain his reasoning.

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PG&E now faces a maximum fine of $6 million if convicted of 11 pipeline safety violations and obstructing investigators in the wake of the 2010 blast in San Bruno, Calif.

The government did not provide an explanation in the filing for its request to lower the potential penalty.

The move came after more than a month of testimony and four days into jury deliberations over whether PG&E is guilty of the charges filed.

The blast of a Pacific Gas & Electric Co. natural gas pipeline six years ago sent a giant plume of fire into the air, killing eight people and destroying 38 homes in San Bruno.

During the investigation, the San Francisco-based utility misled federal officials about the standard it was using to identify high-risk pipelines, prosecutors have said.

The standard PG&E used violated safety regulations and led to a failure to classify the San Bruno pipeline and others as high-risk and properly assess them, prosecutors said in a 2014 indictment.

PG&E also was charged with violating pipeline safety laws by ignoring shoddy record-keeping and failing to identify threats to its larger natural gas pipelines. The company did not subject the pipelines to appropriate testing, choosing a cheaper method to save money, prosecutors told jurors.

PG&E pleaded not guilty and said its employees did the best they could with ambiguous regulations they struggled to understand. Engineers did not think the pipelines posed a safety risk, and the company did not intend to mislead investigators, PG&E attorney Steven Bauer said during the trial.

The utility inadvertently sent officials a draft policy about its standard for identifying high-risk pipes, not one the company was actually following, he said.

Investigators have blamed the blast in part on poor PG&E record-keeping that was based on incomplete and inaccurate pipeline information.

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UPDATES:

5:45 p.m.: This article was updated with the decision of the judge to cut the potential fine.

This article was originally published at 3:45 p.m.

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